Bigger, better, fewer. Netflix feature film executives, led by division chief Scott Stuber, are grappling with this refrain as the digital streaming giant changes course and faces new realities, such as lagging subscriber growth (it lost 200,000 subs in its latest quarter) and rising competition (Disney+, Hulu, and ESPN+ now have 205 million subs combined, just behind Netflix’s 221 million global subs).
The Hollywood Reporter spoke to executives, producers, and agents with ties to the firm to build a picture of a streaming giant seeking to get its mojo back following a surprise earnings presentation April 19 (Netflix has lost 44% of its stock value since that day). “Morale has froze at the stock level,” a CEO adds. A Netflix executive described the current mood as “distracted”
It’s obvious. In reaction to Wall Street, the corporation has lost 150 jobs, or 2% of its workforce. TV and other divisions have suffered, but the features division has thrived. Cuts have wiped off the family live-action film branch and the original independent films division, which made pictures under $30 million.
As it moves forward, Netflix intends to make larger, better movies and release fewer than its gluttonous pace. “A few years ago, we struggled to out-monetize the market on tiny art films,” Netflix co-chief Ted Sarandos said in April. Today we release some of the world’s most popular movies. Recent examples are Don’t Look Up, Red Notice, and Adam Project. What “bigger, better, fewer” means is uncertain inside and outside the company.
“Small movies won’t go away,” says an insider, but they may grow more niche and serve a dedicated following. Another insider said output will drop, reducing the need for so many execs. A source said they had too many executives. Also, bigger doesn’t mean more $150 million films. The business will film one movie for $20 million instead of two for $10 million. One insider advises, “Make the best version of something instead of cheapening for quantity.” And the streamer remains in the acquisitions game, as indicated by the $50 million-plus Pain Hustlers transaction.
On Netflix’s earnings call, Sarandos said “major event films” like The Gray Man and Knives Out 2 are driving subscriber growth. Ryan Gosling and Chris Evans appear in Gray Man, a $200 million-plus film directed by Avengers: Endgame combo Anthony and Joe Russo. It opens in select cinemas July 15 and on Netflix July 22. Knives Out 2, the next chapter in the whodunit franchise from filmmaker Rian Johnson and star Daniel Craig, will debut in the fourth quarter of 2019. “We’re certain the ’22 slate is better and more impactful than ’21,” Sarandos said in April.
Animation is also under investigation, with projects on the bubble being axed and release frequency reduced, but a “new movie every week” is still the goal, live action or animation.
Few years ago, films costing $100 million or $150 million were rare. At the time, Netflix was hailed as the rescuer of the mid-budget movie and of romantic comedies and thrillers. Always Be My Maybe, The Kissing Booth, and To All the Boys I’ve Loved Before were hits and made their actors social media stars.
The corporation is also not giving much direction. “Producers and directors will discuss size and genres in the coming weeks,” says a producer who has a meeting and is keen for feedback. Streaming behemoth could see additional cuts and executive exits, making some producers and agents concerned. “Do I think I’m ready to make a delivery right now?” No, says a partner. Netflix co-chief Reed Hastings didn’t inspire much confidence in film boss Scott Stuber or TV leader Bela Bajaria when he told Maureen Dowd in a May 28 New York Times interview, “No one gets to make that assumption.” He defended the execs by saying, “Our content isn’t why the slowdown is happening.”
Many think that Netflix’s era of pricey vanity projects (like Martin Scorsese’s $175 million The Irishman) is ended. “This desire to do anything to attract brilliance and give them carte blanche is fading,” says one person. As always, there will be outliers — this is Hollywood — but this new period seems to be defined by discipline.