Netflix quadrupled down on “Stranger Things,” which may make it harder to find its next “Squid Game”
Dialing it up to Eleven… Grab some popcorn: the fourth season of one of Netflix’s OG hits, “Stranger Things,” drops today. But the premiere comes at a strange time for the streamer, which is trying to reverse its first subscriber loss in more than a decade.
- Monster-sized marketing: Netflix transformed 15 global landmarks — like the Empire State Building and a Polish castle — into giant “ST” ads.
- Big budget: Each of the nine “ST” episodes this season reportedly cost $30M to produce — more than the combined annual salaries of all 150 employees Netflix laid off this month.
It’s been 36 weeks since “Squid Game”… and Netflix is desperate for another huge hit. It’s lost nearly 70% of its market cap this year. To reverse its stock slide, Netflix has started cutting costs by laying off staff and telling employees to curb spending — and even starting work on a free ad-supported tier. But there’s one place Netflix still isn’t skimping: content.
- Still king: Last year Netflix made 500 originals. This year it plans fewer, but still aims to spend $20B on content (an increase over ’21). Translation: hit shows get more $$, but you get fewer new shows to binge.
Cutting costs comes with a cost… Splurging on content is in Netflix’s DNA: it became the top streamer by bankrolling hits like “The Crown” ($520M and counting). But now it’s in a predicament: it needs to cut costs to compete with faster-growing rivals like HBO and Apple — and it can’t afford to turn off its content firehose. Doubling down on existing shows could cost Netflix to miss out on its next surprise hit. “Squid Game,” Netflix’s most-watched show ever, cost 1/12th of one episode of “Stranger Things.”