Netflix, which recently announced its plans to introduce an ad-supported membership tier, has hired two of Snap’s top executives to lead its advertising sales team, lending the streaming giant increased credibility to brands.
Snap’s chief business officer, Jeremi Gorman, has been appointed to the role of president of worldwide advertising at Netflix. Snap’s vice president of ad sales, Peter Naylor, will now fulfil the same role at Netflix.
"You have two executives that are incredibly well positioned to help Netflix move quickly," said LightShed Partners partner Rich Greenfield. "They have incredible relationships with brands and advertisers who will want to advertise on Netflix."
The new appointments come as Snap announce the layoffs of 20 per cent of its workforce – around 1300 employees – to reduce costs.
“Our forward-looking revenue visibility remains limited, and our current year-on-year QTD revenue growth of 8% is well below what we were expecting earlier this year,” said Snap CEO Evan Spiegel in a blog post. “While we will continue our work to reaccelerate revenue growth, we must ensure Snap’s long term success in any environment.”
In addition to laying off a fifth of its workforce, Snap is also refocusing the company, shelving the majority of its original programming, as well as other projects.
"The investments we have made in our business to-date assumed a higher rate of revenue growth based on our vast opportunity and our proven history of execution, including 2x growth in the size of the Snapchat community and 10x growth in trailing twelve month revenue since our IPO in 2017. Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses.”
“We are restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality. Projects that don’t directly contribute to these areas will be discontinued or receive substantially reduced investment.”
Despite its popularity as a platform, it appears that Snap’s attempts thus far to broaden its market reach and break into other forms of media have proven unsuccessful. As Netflix remains one of the world’s most popular streaming platforms, the acquisitions of Gorman and Naylor could prove key to Netflix’s plans of expanding its market reach while opening new monetisation streams.
As part of its restructuring, Snap is realigning its regional operational leadership, creating president roles in each of the Americas, EMEA, and APAC regions. Google veteran Ronan Harris has been appointed as EMEA president, and will begin in his new role in October.
We listed Netflix as number 26 on this year’s list of the top 50 mobile game makers.