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Netflix’s binge-release model is under new scrutiny as the streaming giant struggles



A scene from Netflix’s “Stranger Things”.

Source: Netflix

Could Netflix ditch its binge-release model? Stranger things have happened.

The all-at-once release strategy for television shows is a bedrock of Netflix’s strategy. The first seven episodes of “Stranger Things,” which all premiered on May 27, broke records. It was the biggest premiere weekend ever for an English-language TV show on the service with nearly 287 million hours watched.

Despite the success of its marquee series, however, Netflix is struggling to jumpstart subscriber growth. So its binge strategy is facing new scrutiny as the company looks for ways to better retain its subscriber base.

“With Netflix, or anyone, never say never,” said Peter Csathy, founder and chairman of advisory firm Creatv Media. “Just like they said ‘no way, no advertising,’ don’t assume that binge viewing is forever.” He added: “Binge viewing is on the table.”

Investors are questioning Netflix’s ability to address subscriber losses and growing competition in the streaming space. The streamer’s stock plummeted over the past year from $700 per share to around $160. The company reported a loss of 200,000 global subscribers during its first quarter earnings report in April. It also warned of deepening trouble ahead, forecasting it would lose around 2 million global paid subscribers during the second quarter.

Now, Netflix is reconsidering several core tenets that once made it the king of the nascent streaming world. Co-CEO Reed Hastings said the company is exploring lower-priced, ad-supported tiers in a bid to bring in new subscribers after years of resisting advertisements on the platform.

Those familiar with the streaming space suggest more changes could come, including a stronger focus on franchise content and even a change to staggered releases of new episodic content.

Netflix has toyed with different release models, mostly due to pandemic-related delays in production, and noted that splitting seasons into two parts can be a “satisfying long binge experience” for subscribers. Still, the company has made no indication that it will transition away from releasing all episodes of scripted series at once. Instead, decisions will be made on a case-by-case basis.

Netflix declined to comment.

“When Netflix started it really had the field to itself,”  said Robert Thompson, a professor at Syracuse University and a pop culture expert. “One of the reasons they started binging was to get people talking and to really launch their new original programming. They succeeded in that. Now, however, it’s a very different case.”

Netflix no longer has licensed content like “The Office” or “Friends,” which kept subscribers coming back month after month to watch on repeat. Instead, it has several high profile shows, like “Stranger Things,” “Bridgerton” and “The Witcher” — as well as an expansive library of series that haven’t reached the same level of prestige or popularity.

Thompson noted that all shows released on streaming services eventually become bingeable. It is how they are first introduced to audiences that the platforms control.

To binge or not to binge

“Releasing all at once, the Netflix model, increases the binge value,” said Nick Cicero, vice president of strategy at data analytics company Conviva. “This allows customers to consume at their own pace, but relies on a deep catalog.”

“The flip side,” he said, “is week over week, which is designed to bring people back and give them something to look forward to. It’s a very different model of marketing.”

On services such as Disney+, HBO Max and Hulu, individual episode releases keep audiences hooked over the course of several weeks, meaning less churn on a month-to-month basis. Meanwhile, Netflix subscribers can watch a full season of a show they are interested in and then leave the service at the end of the month.

In this photo illustration the Netflix logo seen displayed on a smartphone screen, with graphic representation of the stock market in the background.

Sopa Images | Lightrocket | Getty Images

Stringing content throughout the year allows services like Disney to entice subscribers to stay each month but also persuade them to pay for an annual subscription up front. The company’s Disney+ platform utilizes its two biggest franchises — Star Wars and Marvel — to keep subscribers coming back.

The company released “The Book of Boba Fett,” which ran from late December 2021 until early February. Then added “Moon Knight” in late March, which ran until early May. Then in late May, it released “Obi-Wan Kenobi,” which will continue through late June. “Ms. Marvel” arrived early June and will run through late July. August has the release of “She-Hulk,” which carries episodes through October, and then “Andor,” which will wrap its first season in November.

Then in December, Disney+ will release the “Guardians of the Galaxy” Christmas special. In staggering these releases, the company can entice Star Wars fans and Marvel fans to stick with the service long term.

“With Netflix, it is super easy to join for three-to-six months and then leave for three-to-six months,” said Michael Pachter, analyst at Wedbush. “Once ‘Stranger Things’ is over and ‘Ozark’ is over, what now?”

In recent years, Netflix has experimented with weekly releases for some reality shows, but has not tried this strategy with scripted series.

“We fundamentally believe that we want to give our members the choice in how they view,” Peter Friedlander, Netflix’s head of scripted series for U.S. and Canada, said earlier this month. “And so giving them that option on these scripted series to watch as much as they want to watch when they watch it, is still fundamental to what we want to provide.”

Netflix has, however, dabbled in splitting seasons in half or in parts in order to spread them out. The fourth and final season of “Ozark” was segmented in two, and so was the latest season of “Stranger Things.” The final two episodes of “Stranger Things” season four, including its 2.5-hour finale, will start streaming July 1.

“Splitting the seasons actually had a practical reason before, which was the Covid delays and all those projects that kind of led us to splitting some of the seasons,” co-CEO Ted Sarandos said during the company’s first quarter earnings call in April. “But what we found is that fans kind of like both.”

“So being able to split it gives them a really satisfying binge experience for those people who want that really satisfying long binge experience,” he said. “And then being able to deliver a follow-up season in a few months versus, in some cases, the new season of ‘Stranger Things’ is coming nearly three years after the last one or more than two anyway.”

Netflix has long held to its all-at-once model because of its subscribers, which it says want more control over when and how they watch content. Shows like “Maid,” “Inventing Anna,” “The Lincoln Lawyer” and “Squid Game” all held top 10 spots on the streaming service for weeks, showing that Netflix shows can have longevity of viewing on the service as word of mouth travels to new audiences.

Still, Netflix can learn a lot from staggered releases of “Ozark” and “Stranger Things” to determine whether there are other scripted series that would benefit from this strategy.

Pachter suggested that Netflix could take a cue from Amazon and release three episodes a week.

“It’s absolutely OK to say, ‘We are the disruptor, but there are things our competitors are doing that we admire and we respect them and we think they are doing it right,'” Pachter said. “It’s not a cop out.”

Franchise fever

Netflix’s all-at-once release strategy may set it apart from other streaming services, but it also means that it has to increase it output of content to fill the gaps between series. Instead of having, say, 30 shows spread throughout the year, it needs 300, Pachter said.

“Netflix’s data dump means that they have to do more content to minimize churn,” he said. “I think that they will be far more successful if they focus on more quality than more quantity.”

For years, the streaming service used licensing agreements with networks and studios to pad its library with long-running and popular series like “Parks and Recreation,” “Schitt’s Creek,” “Mad Men,” and a suite of Marvel-based superhero shows.

Those contracts have ended and the shows are now on other streamers. In another blow, Netflix is about to lose 12 seasons of CBS’ “Criminal Minds” at the end of month. “New Girl,” another staple in Netflix’s collection, is expected to depart the platform in 2023.

“Breaking Bad,” “Grey’s Anatomy,” “NCIS” and “Supernatural” are sticking around for now.

These kinds of series, which have a number of seasons or dozens of episodes, have been a major driver of viewing traffic on the streaming service for years. Now, Netflix is more reliant on its own original content, leaning heavily on content creator deals and surprise hits like “Squid Game” and “Love is Blind.”

“Netflix has a lot of content, but the iconic evergreen content has not caught up to the catalogs to the other streaming services that are out there,” Cicero said.

Relatively new streamers like Disney and NBCUniversal‘s Peacock have decades of legacy content to fill their libraries with. It’s why Netflix made an agreement to be the first streaming space for new Sony releases back in 2021.

It’s also why Creatv’s Csathy believes Netflix should focus on developing franchises or buying the rights to already established franchises.

“Rather than throwing all the titles against the wall to see what sticks with consumers, focus on franchises and name brands,” Csathy said. “The smartest bets are those that have name recognition and built-in audiences.”

“Wall Street will reward those that come out with a public strategy of less is more,” he added.

Still, there are those that don’t think Netflix will be so quick to overhaul its established strategy.

“I think people tend to forget within our industry is that this isn’t a one size fits all,” said Dan Rayburn, a media and streaming analyst. “I don’t think Netflix will say no more binge watching.”

Instead, Rayburn foresees the streaming continuing to try new models, like its plans for adding an ad-supported plan to its platform.

He noted that the stark stock reaction is a result of Netflix deriving all of its revenue from streaming. This means that when a show doesn’t perform well or the service sees a slowdown in subscriber growth, there is an immediate reaction.

At the end of the day, streaming analysts say content spending will not go down, even with ongoing economic pressures, such as inflation and higher interest rates, and a potential recession on the horizon. Competition in the streaming space will continue to drive these companies to create and distribute more content.

“Where the dollars go will be reallocated is the question,” Csathy said. “For Netflix, I think ‘less is more’ is a strategy that pays off for them.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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‘Minions: The Rise of Gru’ tops $108 million as parents flock back to cinemas, kids in tow



“Minions: The Rise of Gru” is the sequel to the 2015 film, “Minions,” and spin-off/prequel to the main “Despicable Me” film series.


Families have gone bananas for “Minions: The Rise of Gru.”

Over the weekend, the Universal and Illumination animated feature tallied more than $108 million in ticket sales.

The fifth film in the Despicable Me franchise generated an additional $93.7 million from international markets, bringing its estimated opening weekend haul to $202 million globally.

“With the incredible success of ‘Minions,’ the notion that family audiences were avoiding movie theaters due to Covid concerns can be shelved,” said Paul Dergarabedian, senior media analyst at Comscore.

Box office analysts had wondered if this segment of moviegoers was still avoiding cinemas after Disney and Pixar’s “Lightyear” took in just $51 million during its domestic debut last month, below expectations of $70 million and $85 million.

It was unclear if tough box office competition led to “Lightyear’s” less than stellar debut or if consumers were confused about the film’s release. After all, there has not been a theatrical release of a Pixar film since 2020′s “Onward.” The last three from the animation studio, “Soul,” “Luca” and “Turning Red,” were all released on streaming service Disney+.

“Minions: The Rise of Gru” represented 54% of all domestic moviegoers over the weekend, with 68% of ticket holders being part of family groups, according to data from EntTelligence.

“What this weekend has showcased is a triumphant return to cinemas by families, laying to rest any lingering and outdated pandemic narrative that parents and kids only want to watch movies at home,” said Shawn Robbins, chief analyst at “When the right content is out there, people will show up.”

The film is expected to add another $20 million in ticket sales in the U.S. and Canada on Monday, bringing its holiday weekend total to $128 million.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Minions: The Rise of Gru.”

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American Airlines scheduling glitch allows pilots to drop thousands of July flights



An American Airlines Boeing 787-9 Dreamliner approaches for a landing at the Miami International Airport on December 10, 2021 in Miami, Florida.

Joe Raedle | Getty Images

A glitch in a scheduling platform allowed American Airlines pilots to drop thousands of July assignments overnight Saturday, their union said, a headache for the airline as it tries to minimize flight disruptions during a booming travel season.

American said it didn’t expect the problem to affect its operation, including during the busy July Fourth holiday weekend. The union and airline are now discussing additional pay for pilots whose dropped trips the airline reinstated, the Allied Pilots Association said.

“As a result of this technical glitch, certain trip trading transactions were able to be processed when it shouldn’t have been permitted,” the airline said in a statement. “We already have restored the vast majority of the affected trips and do not anticipate any operational impact because of this issue.”

More than 12,000 July flights lacked either a captain, first officer, or both, after pilots dropped assignments, the Allied Pilots Association said Saturday. APA said the airline reinstated about 80% of the trips.

Pilots can routinely drop or pick up trips, but time off in the summer or holidays is hard to come by for airline employees as schedules peak to cater to strong demand.

On Saturday alone, American had more than 3,000 mainline flights scheduled and they were 93% full, according to an internal tally. Flights left unstaffed, however, are an additional strain on any airline.

The glitch occurred during a rocky start to the Fourth of July weekend when thunderstorms and staffing issues caused thousands of U.S. flight delays and hundreds of cancellations.

A similar issue occurred in 2017, when a technology problem let American’s pilots take vacation during the busy December holiday period. The carrier offered pilots 150% pay for pilots that picked up assignments.

American and its pilots’ union, whose relationship has been fraught, are in the middle of contract negotiations and the airline most recently offered nearly 17% raises through 2024.

Union president Capt. Ed Sicher, who started his term Friday, told American’s roughly 15,000 pilots Saturday night that American Airlines CEO Robert Isom said he is committed to paying an “inconvenience premium” to aviators whose trips American put back on their schedules after the glitch.

“To Mr. Isom’s credit, he called me four times today to commit to mitigating the damage from this debacle,” Sicher wrote late Saturday. “We started at a 200% override, although the details of this pay are still the subject of negotiations and there is no guarantee of the details or the amounts.”

American Airlines declined to comment on Sicher’s message to pilots.

American’s pilots have picketed recently against grueling schedules, something they want to be addressed in a new contract. Pilots at Delta and Southwest have picketed in recent weeks for similar reasons.

Sicher also struck an upbeat tone about contract talks with American, particularly about quality-of-life issues.

“Please understand that no firm commitments have yet been made, but I feel that we have, at least for the first time since negotiations began, received positive indications that management is motivated to achieve collaborative solutions to longstanding problems with our current contract that will greatly enhance our ability to trade our trips and consequently enhance our quality of life,” he wrote.

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Trump media company subpoenaed in federal criminal probe of SPAC deal



Former U.S. President Donald Trump gives the keynote address at the Faith & Freedom Coalition during their annual “Road To Majority Policy Conference” at the Gaylord Opryland Resort & Convention Center June 17, 2022 in Nashville, Tennessee.

Seth Herald | Getty Images

Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge.

Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

DWAC also said some current and former TMTG employees have also recently received grand jury subpoenas.

The filing came days after DWAC said the government investigations could delay or even prevent its merger with Trump’s newly formed company, which includes Truth Social, a social media app intended to be an alternative to Twitter.

Neither TMTG nor a spokeswoman for Trump immediately responded to CNBC’s requests for comment.

The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, which is a kind of shell company called a special purpose acquisition company, or SPAC, Trump’s firm would gain access to potentially billions of dollars on public equities markets.

Trump established Truth Social months after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol in a bid to overturn Joe Biden’s victory in the presidential election. Trump Media’s CEO is former Rep. Devin Nunes, one of the former president’s most ardent loyalists in the Republican Party. Trump is also considering whether to run for president in the 2024 election.

Trump has continued to spread the lie that the election was stolen from him. His alleged involvement in the Jan. 6 insurrection is being probed by a House select committee that has accused the former president of being at the center of a multipronged conspiracy to block the peaceful transfer of power to Biden.

Early criticism of the Trump-DWAC deal came from Sen. Elizabeth Warren, D-Mass. In calling for an investigation, she wrote to SEC Chair Gary Gensler in November, telling him that DWAC “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in [SEC] filing and other public statements.”

DWAC shares are far off their highs, closing Friday at $24.20. The stock had surged above $90 in October, after the deal with Trump’s group was announced.

DWAC on Monday revealed in a securities filing that it learned June 16 that each member of its board of directors received subpoenas from the same federal grand jury.

The grand jury sought documents similar to those the SEC already requested as part of its civil probe, DWAC said. The company itself was served with a subpoena a week ago with similar requests, along with other requests relating to communications, individuals and information involving Rocket One Capital.

DWAC also revealed Monday that a board member, Bruce J. Garelick, had told management that he would quit the board during the previous week. Garelick said his resignation “was not the result of any disagreement with Digital World’s operations, policies or practices,” according to the company filing.

— CNBC’s Kevin Breuninger and Thomas Franck contributed to this story.

This is breaking news. Please check back for updates.

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