Today, the Wall Street Journal reported that Netflix wants to cut spending by $300 million this year. This comes as Netflix is joining a growing number of streaming services looking to cut costs and become more profitable or, in Netflix’s case, more profitable.
Netflix reportedly had a meeting earlier this month where it asked staff to be more careful with spending. Not only that but to be more careful with hiring. Right now Netflix says there is no hiring freeze or layoffs planned but that they want to be more careful when it comes to plans to hire new staff.
This comes as Paramount has cut 25% of its cable TV staff, Disney is cutting 7,000 staff, and even Roku has cut staff.
Netflix had an operating expense of $26 billion in 2022. Now it seems that they want to slightly cut back on that spending.
This comes as Netflix recently announced that it will stop mailing DVDs out to customers later this year. On September 29th, 2023, Netflix will mail out its final red envelope. For the last few years, Netflix DVD service has run under the DVD.com name as a Netflix company.
DVD.com customers’ final bill will be in August and they will continue to get access to the service until September 29th, 2023. Netflix says they will accept discs until October 27th, 2023.
Now Netflix’s DVD business generated just $145.7 million in revenue, down 20% from the same time in 2022. DVDs now make up just 0.5% of Netflix’s revenue.
After losing subscribers in the 1st quarter of 2022, Netflix announced that it has turned around its losses and added 1.75 million subscribers in the 1st quarter of 2023. This is excellent news for a company that needs to show stockholders some good news.
Now Netflix wants to tighten its belt as streaming services are seeing cord cutters cut back on the number of services they pay for. Netflix is also facing the same ad issues that most companies are, as ad rates are down for most services.
Put this all together, and you can see why Netflix is looking to be more careful in how it spends its money.