Netflix CEOs Ted Sarandos and Greg Peters addressed concerns over the Trump-imposed tariffs and a potential looming recession during the company’s first quarter earnings call, noting that as of right now they’re not seeing signs of any downturn in Netflix’s business.
“We’re paying close attention to the consumer sentiment and where the broader economy is moving, but based on what we are seeing by actually operating the business right now, there’s nothing really significant to note,” Peters said. “Primary metrics and indicators would be our retention, that’s stable and strong. We haven’t seen any significant changes in plan mix or plan take rate, our most recent price changes have been in line with expectations – engagement remains strong and healthy, so things generally look stable from that lens.”
Peters said that, stepping back, he took comfort in “the fact that entertainment has been pretty resilient in tougher economic times.” “Netflix specifically also has been quite resilient and we haven’t seen major impacts during those tougher times, albeit, of course, over a much shorter history,” Peters said. Adding to that resilience, Peters added, is “having the low-cost ads plan in our largest markets.” With the $7.99 ad-supported rate, Peters said that the company does expect the demand to remain strong. “It’s an accessible price point,” Peters said.
Sarandos also added that the company remains “focused on the things that we can control and improve” to the question of how they’re approaching global economic uncertainty. “We pay taxes and levies around the world consistent with all sorts of local regulations. And there’s always some of that that has existed. But what we’re seeing today, we’re not changing anything in the forecast,” Sarandos said.
He noted that while the United States represents “our largest spend for content and employees production infrastructure,” that the streamer produces original content in 50 countries around the world. “We’re a net contributor to many of those economies and cultures. In our letter, we talked about our commitment to the UK. We also recently announced a billion-dollar commitment to production in Mexico in 2023 we announced we were two and a half billion and committed to Korean content in Korea. And all of these are just examples of the global commitment,” Sarandos said.
Netflix produces in those countries and support employment and training, Sarandos stressed. He also noted that they work with local producers and local talent and help export local stories and local cultures. “We even drive tourism,” Sarandos said. “We believe we’re additive to the local economies and the local cultures all around the world where we’re working, so perhaps a little bit less exposed.”
Source: The Wrap / Digpu NewsTex