Bigger, better, less. That’s the chorus within Netflix under which feature film executives, led by department head Scott Stuber, struggle to operate as the digital streaming giant changes course and confronts new realities such as the… and growing competition (Disney’s bundle of Disney+, Hulu, and ESPN+ now has 205 million combined subscribers, just behind Netflix’s 221 million global subscribers).
spoke to multiple sources, from executives to producers to agents with ties to the company, to paint a picture of a streaming giant trying to get its mojo back after a shock April 19 earnings announcement (Netflix has 44 percent lost its stock value since that day). “Morale is stuck at the stock level,” says one manager, half-jokingly. Another executive describes the mood at Netflix as “distracted” in light of the changes right now.
It’s easy to see why. The company has taken cost-cutting measures in response to Wall Street, including laying off more than 150 employees, or 2 percent of its workforce. TV and other parts of the company have taken their hits, but there’s a particular focus on the features division. A large chunk of the cuts wiped out the family live-action film division, and the original independent feature film division, which produced films under $30 million in budget, was also purged.
Moving forward, Netflix wants to focus on making bigger movies, making better movies, and releasing less than before at a gluttonous pace. “Just a few years ago, we were struggling to outperform the small art film market,” Netflix co-head Ted Sarandos told analysts on the company’s April conference call. “Today we are releasing some of the most popular and most viewed films in the world. Especially in the last few months things like Don’t Look Up and Red Notice and Adam Project as examples.” What this bigger, better, less policy means, however, is unclear both inside and outside the company.
“Small films aren’t going away,” says an insider, but they could become more niche and appeal to passionate audiences. Another insider agrees, saying the power will be reduced, reducing the need for so many executives. “They were overstaffed with executives,” says this insider. Also, bigger doesn’t necessarily mean more $150 million movies. Expect a more subtle change — instead of making two $10 million movies, for example, the company will be making one for $20 million. “The goal will be to make the best version of something, rather than making it cheaper for the sake of quantity,” says an insider. And the streamer remains in the acquisition game, as evidenced by the recent $50 million+ deal for Emily Blunt thriller Pain Hustlers.
On Netflix’s conference call, Sarandos cited “big event films” like The Gray Man and Knives Out 2 to help fuel sub-growth. Gray Man, starring Ryan Gosling and Chris Evans in a $200+ million budget film directed by Avengers: Endgame and co-directed by Anthony and Joe Russo, will hit select theaters on July 15 before its release on July 15 July 22 is bowed before the service. Meanwhile, Knives Out 2 — the next chapter in director Rian Johnson and star Daniel Craig’s whodunit franchise, which Netflix negotiated a $469 million deal for in March 2021 — is slated to wrap up in the fourth quarter of this year. “We’re confident that the upcoming list will be better and more impactful in ’22 than it was in ’21,” Sarandos told analysts on the April conference call.
Animation will also come under scrutiny, with projects that have been in the bubble coming under disciplined scrutiny and the frequency of releases also being reduced, although a “new film every week” is still the goal, be it live action or animation.
The moves are a far cry from a few years ago, when movies costing over $100 million or $150 million were rare. This was also the time when Netflix was frequently billed in the media as the savior of mid-budget film and of once-popular plays like romantic comedies and thrillers. “Always Be My Maybe,” “The Kissing Booth,” and “To All the Boys I’ve Loved Before” became hits, turned their actors into social media stars, and even started mini-franchises.
The company isn’t giving much specific direction at the moment, either. “We’ll be having discussions with producers and directors about size and genre in the coming weeks,” says one producer who has a meeting on the books and is eager for insights. But this is an uncertain moment for the streaming giant, which could see more cuts and possible executive exits, which could make some producers and agents suspicious. “Can I bring you a package right now? No, I’m not,” says a partner. (Netflix co-chief executive Reed Hastings didn’t exactly give film boss Stuber or TV leader Bela Bajaria a boost of confidence, as Maureen Dowd wrote in a New York Times profile on April 28, ‘Um, the way we’re organized, no one can take that .”)
Many agree that Netflix’s era of expensive vanity projects, whether animation or live-action (like Martin Scorsese’s $175 million The Irishman), is probably over. “This tendency to do whatever it takes to attract talent and give them blanket power is going away,” says one person. As always, there will be exceptions—this is Hollywood, after all—but at the heart of this new era seems to be one idea: discipline.
Source: Nielsen streaming rankings, August 2020 – April 2022; THR research
This story first appeared in the June 1 issue of magazine. Click here to login.