Netflix Makes First Change in Light of Subscriber Drop

Following Netflix's 200,000 subscriber drop, the company's fabled "culture deck," has received updates that align with the streaming platform's current status. Based on a PowerPoint presentation created by Co-Founder and Co-CEO Reed Hastings, the document maps out employee objectives and the company's overall strategy, reported Variety

Over 20 million people have viewed it since it was first posted, revised at different intervals, and kept up to date over the years. In its headings ("Highly Aligned, Loosely Coupled," "Disagree Then Commit"), the report highlights some of the distinctive aspects of the company's culture. Hastings elaborated on many of these principles in his 2020 book No Rules Rules.

Netflix's content spending is under scrutiny. It posted its first subscriber declines in over a decade in the first quarter and indicated more losses this quarter in a section called "Judgment" under the new bullet point, "You spend our members' money wisely." Netflix's content budget is estimated at $20 billion in 2022, the first decline in a decade. 

Over the past six months, more than two-thirds of its market value has been lost. Even though the company is not likely to drastically reduce its spending, the management has indicated a new commitment to cutting expenses. A few employees and shows have already been axed as the process begins.

The updated "Artistic Expression" section referred to recent controversies over titles like Cuties or Dave Chappelle's comedy special The Closer. After being released last fall, the latter sparked a backlash and a nationwide walkout of employees upset with Chappelle's overt anti-transgender rhetoric. Netflix denied requests to take down the special.

"Entertaining the world is an amazing opportunity and also a challenge because viewers have very different tastes and points of view," the section says. According to the document, ratings, content warnings, and parental controls are all tools designed to help subscribers avoid content that might offend them.

"Not everyone will like—or agree with—everything on our service," it continues. "While every title is different, we approach them based on the same set of principles: we support the artistic expression of the creators we choose to work with; we program for a diversity of audiences and tastes; and we let viewers decide what's appropriate for them, versus having Netflix censor specific artists or voices."

In conclusion, the company says, "As employees we support the principle that Netflix offers a diversity of stories, even if we find some titles counter to our own personal values. Depending on your role, you may need to work on titles you perceive to be harmful. If you'd find it hard to support our content breadth, Netflix may not be the best place for you."

Along with the Artistic Expression section, the memo adds three other sections: "Ethical Expectations," "Representation Matters," and "Employees Direct Our Philanthropy" (which indicates that Netflix donates double the amount donated by an employee to the same charity).

The updated memo is still shorter than the prior version, which clocked in at 4,070 words, a 6% decrease from 4,340 words. According to Netflix, everyone at the company could see and comment on proposed updates to the culture memo in a shared document. The six-month process involved tens of thousands of employees.

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Some material edited out of the Netflix Culture memo was awkward phrases or observations, such as a comment emphasizing the point that a company does not need rules covering every aspect of its operations. "[W]e also don't have a clothing policy, yet no one has come to work naked… Most people understand the benefits of wearing clothes at work." The full memo can be found at https://jobs.netflix.com/culture.