Bigger, better, and fewer are the words that come to mind. Inside Netflix, feature film executives, led by division chief Scott Stuber, are grappling with how to operate as the digital streaming giant shifts course and confronts new realities like lagging subscriber growth (it lost 200,000 subs in the most recent quarter) and rising competition (Disney’s bundle of Disney+, Hulu, and ESPN+ now has 205 million subs combined, just behind Netflix’s 221 million global subs).
The Hollywood Reporter spoke to a number of people with ties to Netflix, including executives, producers, and agents, to build a picture of a streaming behemoth struggling to reclaim its mojo following a devastating earnings report on April 19 (Netflix’s stock has dropped 44 percent since then). “Morale is stuck at the stock level,” jokes one executive. Given the changes, another executive characterised the mood at Netflix as “distracted.”
It’s simple to understand why. In reaction to Wall Street, the company has implemented cost-cutting measures, including the layoff of more than 150 people, or 2% of its workforce. The company’s TV and other divisions have suffered hits, but the features business has been a particular target. The family live action film sector has been mostly eliminated, and the original independent features division, which produced films with budgets under $30 million, has also been depleted.
Netflix intends to focus on developing bigger, better movies and releasing fewer films in the future than it did previously at a breakneck speed. “On the company’s April earnings call, we were struggling to out-monetize the market on modest art flicks just a few years ago,” Netflix co-chief Ted Sarandos told analysts. “Today, we’re releasing some of the world’s most popular and watched films. Things like Don’t Look Up, Red Notice, and Adam Project are just a few instances from the last several months.” However, both inside and outside the corporation, what this “larger, better, fewer” objective entails is unclear.
Sarandos mentioned “major event films” like The Gray Man and Knives Out 2 as a means to drive sub growth on Netflix’s earnings call. Gray Man, a $200 million-plus budgeted picture starring Ryan Gosling and Chris Evans and directed by Avengers: Endgame’s Anthony and Joe Russo, will open in select theatres on July 15 before premiering on Netflix on July 22. Meanwhile, Knives Out 2 — the next instalment of director Rian Johnson’s whodunit franchise, for which Netflix paid $469 million in March 2021 — is expected to hit theatres in the fourth quarter of this year. “We’re convinced that the incoming slate in ’22 is better and more powerful than it was in ’21,” Sarandos told analysts on the April call.