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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Wonder Dynamics: Redefining the Animation Landscape
Wonder Animation

🔦 Spotlight

Happy Friday, LA!

Wonder Dynamics, a Los Angeles-based company founded by Tye Sheridan and Nikola Todorovic, has launched Wonder Animation, a beta feature that is poised to transform the landscape of video production. Acquired by Autodesk in May, Wonder Dynamics is leveraging this innovative tool, which harnesses artificial intelligence to turn standard video footage into captivating 3D animated scenes, making sophisticated animation techniques more accessible to filmmakers of all budgets.

Wonder Animation allows creators to shoot from multiple angles, with the AI reconstructing these shots into a dynamic 3D space. This functionality enables filmmakers to seamlessly blend live-action scenes with interactive virtual environments while preserving original camera movements. Users can customize various aspects, including animations, characters, lighting, and camera tracking data, and the tool integrates smoothly with popular software like Maya, Blender, and Unreal Engine.

What sets Wonder Animation apart is its emphasis on artistic control. Unlike many AI tools that impose rigid outcomes, this feature empowers creators to guide their projects, ensuring that their unique style remains front and center.

As the boundary between video and 3D animation blurs, Wonder Animation invites creators to experiment and innovate in exciting ways. This development marks a significant step forward in digital storytelling, democratizing access to high-quality visual effects and making sophisticated animation achievable for a broader range of filmmakers.

With the global animation market projected to reach approximately $400 billion in 2024 and grow to over $587 billion by 2030—reflecting a compound annual growth rate (CAGR) of about 5%—tools like Wonder Animation are more relevant than ever. This growth underscores the increasing demand for animated content and highlights the necessity of innovative solutions to meet filmmakers’ evolving needs. For those looking to elevate their storytelling, Wonder Animation may just be the key to unlocking new creative horizons. According to Statista, this upward trend in the animation market emphasizes the significant opportunities ahead.


🤝 Venture Deals

LA Companies

  • Evite, an online platform enabling users to design, send, and manage digital invitations and eCards with tools for event organization and guest tracking, has received a strategic growth investment from Francisco Partners to accelerate innovation and expand its product offerings. - learn more
LA Venture Funds
  • F4 Fund participated in a $4.1M Pre-Seed funding round for Further, a platform designed to help first-time homebuyers determine how much home they can afford by providing personalized insights on interest rates and lender requirements, giving users a clear view of their purchasing power. - learn more
  • Alexandria Venture Investments participated in a $10M Seed funding round for CrossBridge Bio, a company focused on developing advanced dual-payload antibody-drug conjugate (ADC) therapies, with the funds supporting preclinical development of its next-generation cancer treatments. - learn more
  • Clocktower Ventures participated in a $5.6M Series A funding round for Morada Uno, a startup in Mexico focused on making apartment rentals easier by providing a platform that connects tenants with landlords and simplifies processes like lease agreements and rent payments. - learn more
  • Skyview Capital participated in a $5M Series A funding round for Web3 chain game A-World, a tower defense battle game set in the metaverse on the BNB Chain, where players build hero towers to defeat waves of monsters. - learn more

      LA Exits

      • Drive Hospitality, a leading provider of personalized parking and hospitality services, including valet, concierge, bell services, parking management, and advanced technology integration, has been acquired by Propark Mobility. - learn more
      • Vebu Labs, located in El Segundo and specializing in custom automation solutions for the food industry—including the innovative 'Autocado' system that automates the peeling, coring, and scooping of avocados to enhance operational efficiency—will be acquired by Serve Robotics. - learn more

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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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