Most of the content producers ET spoke to were of the opinion that Netflix had already started cutting budgets for movies and shows, and the new announcement could make things more difficult.
“We’ve been seeing a shift over the past few months as Netflix has started talking about the cost of shows, which they haven’t done in the past,” a top producer said, speaking on condition of anonymity. “Now, with the global cuts announced, there will be more pressure on margins.”
Until last year, Netflix executives told producers not to think about budgets but to demand the best quality, he said. “They put shows on the back burner, which didn’t live up to their expectations, after spending more than Rs 150 crore on it,” the producer said. “But now they’re offering budgets that aren’t even comparable to what Amazon Prime and Disney+Hotstar are offering for a similar project.”
After announcing its global results for the first quarter ended in March, when the company saw subscriber declines for the first time in more than a decade, Netflix’s chief operating officer and chief product officer , Greg Peters, had said on an investor call that the company was pulling back some spending growth in both content and non-content spend. “But always increasing our spending and always investing aggressively in this long-term opportunity,” he said.
Indian producers and analysts believe the impact of cost cutting will be greatest in India, which is not one of Netflix’s big markets and where it has had to cut prices to gain subscribers, which could lead to a decline in the quality of its content and popularity compared to its competitors.
The morale of its employees already seems to be on the decline.
“Earlier this year, Reed Hastings (co-founder and co-CEO of Netflix) said that it was frustrating to see that they weren’t having as much success in India as in other markets. And since then, so that they were trying to get the right content, that’s a long way off the mark,” a former Netflix employee said on condition of anonymity.
“The biggest problem today is that all or most hiring is frozen, there are no raises or promotions,” the person said. “Even the Singapore office has seen senior management departures. Growth is capped.”
A senior industry official said that two years ago everyone wanted to work with Netflix, today that is no longer the case. “It’s not just India…globally too, they’re losing top designers to the competition.”
In India, top creators are turning to rival platforms such as Amazon Prime Video or Disney+ Hotstar, Sony LIV and Zee5, the person said. “Everyone seems to have upped their game except Netflix.”