Yahoo News Netflix is changing up its strategy yet again
From Hannah Gadsby to Hasan Minhaj, Bo Burnham to Wanda Sykes, Netflix is awash with stand-up comedy specials from the biggest and best names in the business.
Whoever and whatever you're in the mood for, you are likely to find it on the streaming platform.
But the company is modifying its approach to comedy.
Bloomberg recently reported that this time last year, Netflix had released 50 new comedy specials. This year, that number currently stands at 30.
The numbers don't lie. A shift is happening.
According to Netflix, the decision to reduce that number is not being driven by financial concerns, despite a long-term debt of more than $14 billion – and its spending would appear to back that up.
Netflix spends significantly more money than its competitors, and a number of its most high-profile comedy specials have required the platform to flash the cash – a estimated $40 million for Chris Rock, $60 million for Dave Chappelle and $100 million for Jerry Seinfeld.
TMZ recently reported that a potential string of Eddie Murphy stand-up specials, which have yet to be confirmed by Netflix or Murphy, could cost as much as $70 million.
If Netflix puts the brakes on its spending, Apple TV+, HBO Max and Disney+, among others, would be given even more room to grow, muscling in on Netflix's subscribers. While some people can afford multiple streaming services, others don't have that luxury.
So it looks like the spending is set to continue – the Los Angeles Times reported that in 2025, the company's spending is forecasted to hit $35 billion, which is $16 billion more than this year.
"We have to continue to do what we've been doing, which is make the best content and deliver it seamlessly," said Netflix's chief content officer, Ted Sarandos.
The company has said that this new change regarding its comedy specials specifically is all about moderation.
The big names currently on its books helped put Netflix on the map, drawing in a new crowd who were potentially uninterested in the platform's original series, or were initially enticed by the stand-up specials and later fell in love with the likes of Stranger Things and The Crown.
It added another string to its bow.
But with a comedy library full to the hilt of huge names, the company now feels that it has the freedom to increase its offerings at a less dramatic pace, and turn its attention towards sketch comedy and comedians with smaller profiles.
It's common knowledge that standing still means falling behind. Netflix had predicted that it would gain 300,000 new US subscribers in the second quarter of 2019, but it was reported in July that the company had actually lost around 130,000 homes – the first time it had lost customers in eight years.
It did manage to add 2.7 million subscribers globally, but those weren't the five million who investors had been expecting.
Those losses will, of course, have rattled Netflix and forced the company to look at what it's spending its money on and if it's having the intended effect.
"It's a whole new world starting November," said Netflix CEO Reed Hastings earlier this month at a Royal Television Society event (via NBC News).
"We said that eventually all these companies will go direct-to-consumer. We've been preparing for this for a long time because we’ve known it's been coming."
But not everyone is convinced that Netflix can keep calm and carry on.
Michael Pachter, an analyst at a wealth management firm, told NBC News that while Netflix's colossal spending is "tremendous value for its subscribers", in his eyes it's "an unsustainable business model".
It's not yet known what the result of this fresh strategy shift will be. There is a chance that it could play into the hands of Netflix's competitors if they manage to snap up the latest content from big names.
It also doesn't take a genius to deduce that comedians with smaller fanbases will be less of a financial undertaking. Despite Netflix's insistence that it will continue to spend big, undeterred by the skepticism from its critics, certain genres and titles will take precedence over others.
With a huge comedy library on offer, this is a chance for the streaming giant to invest in fresh content, headed up by some lesser known faces, that isn't afraid to take creative risks.
But whether it will be enough to drive significant subscriber growth is not yet known.
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