Netflix Taps Ex-Disney's Peter Rice as Content Chief Amid Layoffs

By Daniel Okafor

Netflix named former Disney television chairman Peter Rice its chief content officer on Thursday, days after laying off roughly 1,000 employees, or 6% of its workforce. Rice replaces Bela Bajaria, a 10-year veteran who ran the company's $20 billion content budget.

Rice will oversee the global content organization, including scripted and unscripted series, film and live events. The switch lands at an uncomfortable moment. Netflix reported in July that viewership rose just 2% in the first half of the year. Nielsen put Netflix at 7.8% of TV viewing that same month, while YouTube captured 14.2% — nearly double.

Why did Bajaria leave now?

Bajaria joined Netflix in 2016 to build its unscripted division and handle licensing and studio co-productions. She later took the top creative job and shepherded the $20 billion annual content spend. Her slate included "Stranger Things," "Wednesday," "Bridgerton," "Squid Game," "Adolescence" and "Beef," plus films such as "Frankenstein" and "KPop Demon Hunters."

She also pushed Netflix into live sports and events, striking deals with the WWE and the NFL and producing programs like "The Roast of Tom Brady." That work has not stopped the engagement slump.

Co-CEO Ted Sarandos told the Bloomberg Screentime conference last month that the company is "not growing as fast as I want us to." Wall Street read Bajaria's exit as more evidence of the problem.

"The sudden departure of Bajaria likely signals to us that user engagement may have remained soft throughout [the third quarter]," wrote Brian Pitz, managing director and head of internet and interactive entertainment equity research at BMO Capital Markets, in a research note published Friday.

Pitz also framed the layoffs in structural terms. "We believe this round of layoffs reflects more structural changes to the cost base than a reaction to near-term subscriber dynamics," he wrote.

The last comparable cut came in 2022, when Netflix reported its first quarterly subscriber loss in more than a decade. Netflix reports fiscal third-quarter earnings on Tuesday.

What does Rice bring?

Rice's record spans two major studios. He served as chairman of Walt Disney Television and chairman of general entertainment, managing ABC, Disney Channel, Hulu and FX Networks. Before Disney, he was president of 21st Century Fox, CEO of Fox Networks Group, Fox's lead executive on the Hulu board, and president of Fox Searchlight Pictures, where he helped release "Slumdog Millionaire," "Juno," "Little Miss Sunshine" and "Sideways."

At Disney Television, Rice oversaw production of more than 300 shows, including "American Idol," "Modern Family," "Abbott Elementary," "The Bear," "Only Murders in the Building" and "Shogun." He also headed coverage of the Super Bowl, NBA Finals and FIFA World Cup.

The Emmy math explains part of the hire. Under Rice, Disney earned roughly 300 Primetime Emmy nominations between 2021 and 2022 and won nearly 60 awards. Netflix tied the single-year record with 44 Emmy wins in 2021. This year it took home 16, its lowest haul in a decade.

Rice also carries theatrical experience. After Bob Chapek ousted him as Disney's television chairman in mid-2022, he turned to independent producing. Since 2023 he has produced "Saturday Night" and "28 Years Later," and he is now developing a film adaptation of the video game "Elden Ring."

Is Netflix planning more acquisitions?

The M&A angle gives the hire an extra layer. Netflix struck a deal late last year to buy Warner Bros. Discovery's film studio and streaming assets, only for Paramount Skydance to outbid it and complete its WBD acquisition in early October. Some Wall Street analysts speculate Netflix may target NBCUniversal assets after the company splits from Comcast.

"[Rice's] long tenure at Fox, and then Disney after its acquisition of Fox, gives him unique insight into the consolidation of two major studios, relevant if Netflix chooses to go after another studio," wrote Alicia Reese, senior vice president of equity research at Wedbush, in a research note Thursday.

Netflix has diversified into live sports, documentaries and video games to compete with YouTube for attention. That strategy carries its own risk. "If the opportunity is to recast [Netflix] into a broader content hub, the risk is missing the watercooler originals," wrote Steven Cahall, equity analyst at Wells Fargo, in a research note last month. "We see breakout hits as a must for the stock to work again."

Tuesday's earnings report will show whether the engagement softness Pitz flagged persisted through the third quarter — and how much runway Rice has to fix it.

Daniel Okafor covers media and streaming for Business Bearings.