Netflix is shaking up its C-suite in an effort to fix its engagement woes.
On Thursday, the streaming giant announced that former Disney executive Peter Rice will take over as the company's chief content officer, overseeing global content organization, including scripted and unscripted series, film and live events.
Rice is replacing 10-year Netflix veteran Bela Bajaria, who most recently led the company's global content team with a focus on its live sports strategy. Bajaria was initially hired in 2016 to help the streamer launch an unscripted division as well as licensing and studio co-productions. She later transitioned to the top creative role, spearheading Netflix's $20 billion content budget.
She oversaw popular TV series like "Stranger Things," "Wednesday," "Bridgerton," "Squid Game," "Adolescence" and "Beef," as well as Netflix films like "Frankenstein" and "KPop Demon Hunters." Bajaria also helped push Netflix into live sports and events, including deals with the WWE and the NFL as well as programs like "The Roast of Tom Brady."
Prior to his stint at Disney, Rice was president of 21st Century Fox and CEO of Fox Networks Group as well as Fox's lead executive on the Hulu board. He was also the president of Fox Searchlight Pictures and helped release "Slumdog Millionaire," "Juno," "Little Miss Sunshine" and "Sideways."
The executive change follows a tumultuous period for Netflix as it faces stagnating viewership and explores avenues for growth. It comes just days after the streaming giant laid off roughly 1,000 employees, or 6% of its workforce.
The last time Netflix made cuts of this size was in 2022 when it reported its first quarterly subscriber loss in more than 10 years.
"We believe this round of layoffs reflects more structural changes to the cost base than a reaction to near-term subscriber dynamics," wrote Brian Pitz, managing director and head of internet and interactive entertainment equity research at BMO Capital Markets, in a research note published Friday.
Flagging engagement
In July, Netflix reported viewership increased just 2% in the first half of the year as the streamer suffers from a lack of shows with water-cooler-level hype.
Co-CEO Ted Sarandos admitted last month during the Bloomberg Screentime conference that the company is "not growing as fast as I want us to."
Those warnings, and now Bajaria's exit, have Wall Street bracing for more turbulence ahead.
"The sudden departure of Bajaria likely signals to us that user engagement may have remained soft throughout [the third quarter]," Pitz wrote.
Netflix is set to release fiscal third-quarter earnings on Tuesday.
In July, Nielsen reported that Netflix had generated 7.8% of TV viewership, while YouTube accounted for nearly double that, at 14.2%.
YouTube has been Netflix's biggest threat in the battle for viewers' time. In response, the streaming giant has sought to diversify its content in recent years, expanding into live sports, documentaries and video games in order to compete for share of consumer attention.
"If the opportunity is to recast [Netflix] into a broader content hub, the risk is missing the watercooler originals," Steven Cahall, equity analyst at Wells Fargo, wrote in a research note last month. "We see breakout hits as a must for the stock to work again."
What Rice brings to Netflix
Rice has a wealth of experience in television and film, most recently serving as the chairman of Walt Disney Television and chairman of general entertainment for the company. He managed a wide swath of channels across broadcast and streaming, including ABC, Disney Channel, Hulu and FX Networks. During his tenure, he oversaw the production of more than 300 shows, including "American Idol," "Modern Family," "Abbott Elementary," "The Bear," "Only Murders in the Building" and "Shogun."
He also headed up major sporting events such as coverage of the Super Bowl, NBA Finals and FIFA World Cup.
Under Rice's leadership, Disney earned roughly 300 Primetime Emmy nominations between 2021 and 2022. Of those nods, it won nearly 60 awards across its television networks and streaming platforms.
Meanwhile, Netflix's Emmy wins have slowed.
In 2021, it tied the record for most trophies won by an outlet in a single year with 44. This year, however, it only took home 16 prizes, its lowest Emmy haul in a decade.
With Rice, Netflix is also getting an executive with theatrical experience. After he was ousted by then-Disney CEO Bob Chapek in mid-2022, he transitioned into an independent producer role. Since 2023 he has produced films like "Saturday Night" and "28 Years Later." He's currently developing a movie adaptation of the video game "Elden Ring."
Late last year, Netflix struck a deal to buy Warner Bros. Discovery's film studio and streaming assets, only to be outbid months later by Paramount Skydance, which completed its acquisition of WBD in early October.
Some on Wall Street have speculated that the streamer may be interested in further M&A, including acquiring assets from NBCUniversal after it splits from parent company Comcast.
"[Rice's] long tenure at Fox, and then Disney after its acquisition of Fox, gives him unique insight into the consolidation of two major studios, relevant if Netflix chooses to go after another studio," Alicia Reese, senior vice president of equity research at Wedbush, wrote in a research note Thursday. "Even if it doesn't, Rice's experience fits well as Netflix pushes deeper into theatrical and builds a broader platform with varied content across the entertainment ecosystem."