Netflix Disrupts Its Own Business Model

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Netflix Disrupts Its Own Business Model
Photo by David Balev on Unsplash

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Netflix’s longtime strategy of spending billions to push out a deluge of films will soon slow to a more manageable flow as the streaming giant re-evaluates its priorities, balance sheets and focuses more on making money back on its advertising spend.

Last week, Netflix announced it would lay off some staff as it restructured its film divisions, consolidating its small and midsize picture units. While it’s unclear how many people were laid off we do know the cuts include a couple executives: Lisa Nishimura, former head of standup and original documentaries, and film group vice president Ian Bricke.


Netflix’s film chief Scott Stuber recently told Bloomberg the plan is to make fewer films with the goal of making sure “more titles are of high quality.”

The quantity over quality approach helped raise the streaming service to the height it’s at today, with around 220 million global subscribers. In the early days, when Netflix still sold DVDs by mail, the library was part of the allure; the service promised a wide range of content delivered to your door at a pretty nominal price. Blockbuster sold out of the obscure horror flick that you’ve been waiting for months to see? Netflix probably had several copies and would send one in days.

During the pandemic, when streaming and gaming engagement across the board hit an all time high, Netflix’s strategy was largely the same: give the people as many options as possible to choose from while they were stuck inside and bored as hell. This often meant opening up the back catalog since films and shows stuck in production gridlocks were delayed – and it led to unexpected hits, including older films like “Outbreak” and “Space Jam” seeing a resurgence in viewers.

People still continue to tune into streaming at about the same rate as they did during the pandemic, indicating there’s still an ample audience for Netflix productions.

But the old Netflix strategy of making a bunch of content with limited or no ads attached, and expecting viewers to gravitate towards its productions simply because they are under the big red “N” is not completely viable anymore. After rising to global prominence, now the company wants to focus on driving profitability ever-upward, and in that process it is rethinking the films it produces (it’s also the reason you might not be able to share passwords with your pals in the near future).

To be clear, Netflix isn’t completely slowing its roll. Stuber told Bloomberg in December the streamer planned to release at least 28 films across its big studio, mid-budget and indie divisions over the next year. And that’s not counting the slates of documentaries, non-English, animation or holiday-related films. But in the future, it’s fair to expect that number will dwindle as Stuber pushes his executives to be more judicious in what they green-light.

The focus of its Netflix Originals team was initially to create prestige dramas and premium shows that could rival HBO. Next, the streaming giant moved on to Oscar-bait movies with Netflix accepting a Best Director win for Alfonso Cuarón’s “Roma” in 2019. It later snatched another such win for Jane Campion’s “Power of the Dog” in 2022.

Most recently, Netflix nabbed Oscars for its “All Quiet on the Western Front” remake.This fits in with the quality over quantity theory – if people are going to watch no matter what, why not go for a blockbuster or award-winner and further elevate the brand’s prestige?

Also, if Netflix is making fewer films and slightly downsizing its staff (again, after cuts in May and June of last year), it could look to funnel any remaining cash left over from film production into advertising spend. The company’s newest chief marketing officer, Marian Lee, recently told the New York Times Netflix’s social media accounts have a combined global audience of around 800 million people. That’s a huge, and potentially lucrative, audience.

In 2022, Netflix’s marketing budget swelled to $2.5 billion to reach even more eyeballs. Its ad-supported tier launched in November is growing; at least one million subscribers joined in the first two months.

Lee told the Times she is embracing nontraditional marketing to get people to watch Netflix’s films. This included a LA-based escape room themed around the “Knives Out” franchise, Wednesday Addams-themed TikTok dances, and even promoting its hit characters on the Uber app. It’s working, Lee claimed, noting that “Wednesday” was Netflix’s second most-watched English language show, with 1.24 billion hours streamed in its first month. - Samson Amore

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Big Wins: Dodgers Take the Title ⚾, ChatGPT Levels Up🚀

🔦 Spotlight

Happy Friday, LA! It’s been a week of big wins, on and off the field. 🎉

⚾️ First up, let’s talk Dodgers. With a thrilling 7-6 comeback victory over the Yankees in Game 5, the Dodgers clinched their eighth World Series title, their first since 2020. The city is buzzing, and fans are ready to celebrate! A parade kicks off this morning at 11 a.m., starting at City Hall and winding down to Flower Street, with a ticketed celebration at Dodger Stadium for those wanting to keep the festivities going.

Image Source: Dodgers

💻 Meanwhile, in the tech, OpenAI just rolled out a game-changing update for ChatGPT. Plus and Enterprise users can now access real-time internet search, powered by Microsoft Bing, bringing ChatGPT's responses fully up-to-date. This means users can now ask about the latest news, hotspots, or recent LA startup announcements, and ChatGPT will pull in fresh, relevant answers directly from the web. Previously limited to information up to 2021, ChatGPT’s new browsing capabilities make it a valuable digital assistant for anyone needing real-time insights in fast-paced industries like tech and entertainment.

Image Source: ChatGPT

🔍 The real-time search feature also includes “Browse with Bing,” allowing ChatGPT to source information from multiple sites for detailed answers to complex questions. Whether you’re exploring the latest venture capital trends in LA or curious about the best local spots, ChatGPT’s new browsing power helps you stay ahead with the latest info. This leap forward in AI functionality makes ChatGPT even more versatile and powerful for everyone, from business owners to everyday users.

From the Dodgers’ World Series win to OpenAI’s latest ChatGPT update, there’s a lot to celebrate in LA this week. Here’s to champions, innovation, and a city that’s always pushing boundaries. 🌆✨


🤝 Venture Deals

LA Companies

  • Final Boss Sour, a Los Angeles-based gaming-themed snack company specializing in healthier sour snacks, has raised a $3M Seed funding round led by Science Inc. to expand its product offerings and operational capabilities. - learn more
LA Venture Funds
  • Smash Capital led a $50M Series B round for Read AI, a productivity-focused AI company, bringing its total funding to $81M. The company offers a platform that enhances meeting efficiency through features like note-taking, summarization, and transcription. Additionally, Read AI introduced "Read AI for Gmail," a free Chrome extension that integrates information from various applications, reducing the need to switch between apps. The funds will be used to increase the company's headcount in engineering, data science, and business teams. - learn more
  • Distributed Global participated in a $25M funding round for Nillion, a company that provides decentralized privacy solutions designed to secure sensitive data using advanced technologies like secure multi-party computation. - learn more
  • Act One Ventures participated in a $5M Seed funding round for Latii, a construction materials supply chain startup, to enhance its platform that connects contractors with suppliers, aiming to streamline procurement processes and reduce costs in the construction industry. - learn more
  • SmartGateVC participated in a pre-seed funding round for Ritual Dental, a company revolutionizing dental care by integrating advanced technology and microbiome science to provide personalized, preventive treatments. - learn more

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      Billion-Dollar Milestones and Snapchat’s New Features

      🔦 Spotlight

      Happy Friday Los Angeles!

      This week’s spotlight showcases LA’s thriving tech scene, featuring Snapchat’s latest feature updates and two local startups Liquid Death and Altruist, making TechCrunch’s Unicorn List for 2024.

      Image Source: Snap

      Snapchat’s recent fall updates bring fresh features, including a new iPhone camera shortcut for instant snaps, Halloween-inspired AI-powered Lenses, and Bitmoji costumes inspired by Mean Girls and Yellowstone. Bitmoji stickers now reflect trending Gen-Z expressions like “slay” and heart symbols for added flair in chats. Plus, the “Footsteps” feature on Snap Map allows users to track their past adventures privately, adding a nostalgic touch.

      Image Source: Liquid Death

      ICYMI, two LA startups joined the Unicorn Club—achieving valuations over $1 billion. Liquid Death, based in Santa Monica, is a canned water company with edgy branding and a humorous sustainability focus. Known for viral marketing and brand partnerships, it redefines bottled water as a lifestyle brand and environmental statement. In March, Liquid Death closed $67 million in strategic financing, raising its total funding to over $267 million and valuing it at $1.4 billion.

      Image Source: Altruist

      Altruist, a Culver City-based fintech platform, offers financial advisors streamlined tools to better serve their clients. With a user-friendly investment and account management platform, Altruist has gained strong traction in the finance world. In May, it announced a $169 million Series E funding round, bringing its total funding to over $449 million and earning a valuation of $1.5 billion.

      Together, Liquid Death and Altruist exemplify LA’s capacity for innovation across diverse sectors, from lifestyle branding to fintech. Whether reshaping financial tools or redefining sustainable branding, these companies showcase LA’s unique entrepreneurial spirit. Go LA!

      Check out TechCrunch’s 2024 Unicorn List here. And don’t miss Snapchat’s latest features—perfect for adding some fun, connection and maybe a few selfies this weekend!


      🤝 Venture Deals

      LA Companies

      • Freeform, a company bringing AI to metal 3D printing, raised $14M in funding from NVIDIA’s NVentures and AE Ventures to further develop its AI-powered 3D printing technology for industrial-scale production. - learn more
      LA Venture Funds
      • Anthos Capital participated in a $70M Series D round for Carbon Robotics, which develops AI-powered robotics for precision agriculture, and the funding will be used to accelerate the growth of its autonomous weeding technology. - learn more
      • Anthos Capital participated in a $3.5M seed round for Plasma Network, aimed at expanding access to USDT stablecoins on the Bitcoin network, with the investment supporting the network’s growth and efforts to enhance stablecoin accessibility through the Lightning Network. - learn more

      LA Exits


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          ⚖️FTC’s "Click to Cancel" Rule and Its Ripple Effect on Tech

          🔦 Spotlight

          Happy Friday Los Angeles,

          The FTC’s new “Click to Cancel” rule is shaking up subscription-based tech. Now, instead of navigating a maze of cancellation hurdles, users can cancel subscriptions as easily as they signed up—with a single click. This shift is a wake-up call for SaaS, streaming, and app-based companies, where once-hidden exit options often kept users around simply because canceling was a hassle.

          The rule also requires businesses to send regular renewal reminders, ensuring customers stay informed about upcoming charges. It's more than a cancellation button—it’s about transparency and giving users control over their decisions.

          For startups, the impact goes deeper than UX adjustments. Many have relied on "dark patterns," which subtly discourage cancellations by hiding the exit. Now, companies must shift toward building genuine loyalty by delivering real value, not by complicating exits.

          While this might affect retention rates initially, it could lead to more sustainable business models that rely on satisfaction-driven loyalty. Investors may start prioritizing companies that emphasize transparent, long-term engagement over those that depend on dark patterns to maintain retention metrics.

          The rule opens the door to more ethical UX design and a truly user-centered approach across the tech industry. It may even set a precedent against manipulative design in other areas, such as privacy settings or payment methods.

          Ultimately, the “Click to Cancel” rule presents an opportunity for the tech industry to foster trust and build stronger customer relationships. Startups and established companies that embrace transparency will likely stand out as leaders in a new era of customer-centric tech, where trust—not tricky design—is what retains users.

          As the tech landscape continues to evolve, LA Tech Week 2024 offers a chance to explore these shifts in real-time. Check out the upcoming event lineups to stay informed and make the most of your time:

          For updates or more event information, visit the official Tech Week calendar.


          🤝 Venture Deals

          LA Companies

          • Ghost, a company supporting top brands and retailers with streamlined logistics and fulfillment solutions, raised a $40M Series C funding round led by L Catterton to fuel its continued growth and innovation. - learn more

          LA Venture Funds
          • Assembly Ventures participated in a $27M Series A round for Monogoto, a provider of software-defined connectivity solutions that enable secure, cloud-based IoT and cellular network management on a global scale. - learn more
          • Angeleno Group participated in a $32M Series C round for REsurety, a company that recently launched an innovative clean energy marketplace aimed at providing better financial and operational insights to support renewable energy transactions. - learn more

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