It’s all fun and games until customers begin to cancel memberships and company stock takes a nosedive. Netflix finds itself playing offense as the streaming service experienced its first subscriber loss in more than a decade, losing 200,000 subscribers during the first quarter of 2022.
Netflix sent a memo to its employees reminding them to spend the company’s money wisely. You would think that this kind of instruction would be unnecessary but apparently not. The memo was titled “Netflix Culture – Seeking Excellence.”. Under the “Judgment” section, it instructs employees to “spend our members’ money wisely.” Maybe it is referring to some of the less than stellar projects that were given a green light but have now been scrapped, including one with Duchess Meghan.
The company renamed its ‘culture memo’ and, most importantly, reminded employees that not everyone shares their world view. In other words, not all Netflix subscribers are progressives and some tolerance is expected.
The entertainment giant changed the name of its culture memo from “Netflix Culture” to “Netflix Culture — Seeking Excellence” and altered its “Real Values” section to be called “Valued Behaviors.”
Under Valued Behaviors, Netflix added an expectation that employees spend the money of the company’s members “wisely,” a change that notably follows Netflix’s first subscriber loss in over a decade last month.
Netflix also introduced a section on Artistic Expression to its culture memo, explaining that the entertainment business can be “a challenge because viewers have very different tastes and points of view.”
“Entertaining the world is an amazing opportunity and also a challenge because viewers have very different tastes and points of view. So we offer a wide variety of TV shows and movies, some of which can be provocative,” the section reads. “To help members make informed choices about what to watch, we offer ratings, content warnings and easy to use parental controls.”
Netflix expects to lose 2 million subscribers in the second quarter. While Netflix blames some financial losses on password sharing and numerous people on one account, the fact is we are in a time of high inflation, possibly on the way into a recession. Netflix stock prices plunged 25% in April after the big loss of subscribers in the first quarter.
In financial times like this, when family budgets are strained due to rampant price increases on everyday necessities, the extras fall away. There is no room in the budget for several streaming services, for example, and people who are able to keep paid subscriptions will choose to keep one that is most appealing to them. Netflix has a history of some questionable content, like “Cuties”, which was creepy and looked like it appealed to pedophiles. During the pandemic, streaming services were able to increase memberships because people weren’t going out to movies and other entertainment venues. Now that more venues are open and people are trying to get back to a more normal life, subscribers will be able to demand better material.
The last major update to the employee memo was in 2017. That was before subscribers began to push back on the content presented by streaming services like Netflix. The financial bottom line is suffering now and the company bigwigs are starting to figure out that their employees shouldn’t be running the operation as they do. Remember the mess Netflix found itself in over the Dave Chappelle show?
The core principles of the Netflix Culture memo, including empowering employee decision-making, requiring candid feedback and terminating staffers who aren’t up to “dream team” snuff, remain intact. But there are some key changes. For starters, the document has a new title: “Netflix Culture — Seeking Excellence” (previously it was simply called “Netflix Culture”).
More significantly, the document adds a new directive for employees to act with fiscal responsibility — a change that comes as Netflix in Q1 saw its first decline in subscribers in more than a decade. The updated Netflix Culture memo also includes a new section called “Artistic Expression,” explaining that the streamer will not “censor specific artists or voices” even if employees consider the content “harmful,” and bluntly states, “If you’d find it hard to support our content breadth, Netflix may not be the best place for you.”
If an employee isn’t able to handle a point of view different than his or her own, well, adios. “Netflix may not be the best place for you.” Netflix prides itself on a no-rules atmosphere but somewhere along the line, a successful company has to have some rules to be adhered to by all employees. That would include all employees being able to work with projects they may not agree with. Triggered snowflakes may not be the best fit for Netflix going forward.
It seems odd that Netflix would have to remind its employees that customers have different points of view and tastes. Not everyone is as woke as those on the left coast and in the entertainment business. We’ll see if this attempt to head off future problems, maybe after the next Chappelle show, brings more tolerance from those who preach tolerance to everyone else.