Netflix Reportedly Plans $300 Million In Spending Cuts
In its latest move to improve profits, Netflix is set to reduce spending by $300 million this year, The Wall Street Journal reports(Opens in a new window).
According to people familiar with the matter who spoke with the Journal, the spending cuts come after the company pushed back its crackdown on password sharing in the US and elsewhere from the first quarter to the second quarter of the year. The delay means revenue from the move won’t arrive until the latter half of 2023.
Netflix said the delay was enacted in order to give it time to learn which approach was best for members and its overall business.
The Journal’s report adds that in an internal company meeting earlier in May, execs told staffers to be “judicious” with their spending and hiring, but affirmed that there would not be a hiring freeze or extra layoffs.
The $300 million cutback represents a small percentage of the streaming giant’s overall spending: last year, Netflix’s total expenses were around $26 billion, the Journal reports.
Netflix has been focusing on maximizing profitability since it reported its first hit to its subscriber count in a decade last year.
The password crackdown has already been rolled out in Canada, New Zealand, Portugal and Spain. The move requires subscribers to set a primary home location for their account, and if anyone who doesn’t live with them tries to access their account, Netflix pulls up an alert telling them to buy an extra profile. Netflix says two extra members are allowed per account for a fee, though this is different from country to country.
The crackdown hasn’t been well received everywhere; according to market research firm Kantar, 1 million Spanish users canceled their subscriptions in the first quarter of the
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