Netflix’s ‘era of expensive vanity projects’ is over, no more ‘carte blanche’ deals

Netflix is going through some things. On one side, I always said that the Netflix business model was not sustainable long-term. On the other side, I feel so sorry for the massively talented and creative people who have been fired from Netflix simply because Netflix’s short-sighted management thought they would always be flush with cash forever. So, we’re witnessing the start of Netflix’s “lean years,” where they begin to declutter their programming, end the $180 million “passion project” deals and, if their comedy section is any indication, continue to go all-in on transphobia. This year, Netflix has lost 200,000 subscribers per quarter, although some of that (not all, but some) is because of the loss of Russian subscribers following the invasion of Ukraine. Netflix has also canceled nearly all of their animated projects and they’ve let a lot of staff and creatives go. What else is going to be changed? From the Hollywood Reporter:

Netflix’s new “Bigger, better, fewer” energy: The Hollywood Reporter spoke to multiple sources, ranging from executives to producers to agents with ties to the company, to paint a picture of a streaming giant that is trying to get its mojo back after a shocking earnings disclosure April 19 (Netflix has lost 44 percent of its stock value since that day). “Morale is stuck at stock level,” says one executive semi-jokingly. Another executive describes the mood within Netflix right now as “distracted” given the changes.

Cost-cutting measures: The company, in response to Wall Street, has taken cost-cutting measures such as axing more than 150 employees, or 2 percent of its workforce. TV and other parts of the company have taken their hits, but a pointed focus is the features division. A good portion of cuts have wiped out the family live action film division, and the original independent features division, which made movies in the under-$30 million budget range, has also seen its ranks cleaned out.

The new business model: As it moves forward, Netflix wants to focus on making bigger movies, making better movies, and releasing fewer than it previously did at a gluttonous pace. “Just a few years ago, we were struggling to out-monetize the market on little art films,” Netflix co-chief Ted Sarandos told analysts on the company’s April earnings call. “Today, we’re releasing some of the most popular and most watched movies in the world. Just over the last few months, things like Don’t Look Up and Red Notice and Adam Project, as examples of that.”

They’ll still make small & mid-budget movies: “Small movies are not going to go away,” says one insider, but they could become more niche and cater to a passionate audience. Another insider concurs, saying the output will be reduced, lessening the need for so many execs. “They were overstaffed with executives,” says this insider. Also, bigger doesn’t necessarily mean more $150 million movies. Expect to a see a more subtle change — instead of making two movies for $10 million, as an example, the company will make one for $20 million. “The goal will be to make the best version of something instead of cheapening out for the sake of quantity,” says one insider. And the streamer remains in the acquisitions game, as evidenced by the recent $50 million-plus deal for the Emily Blunt thriller Pain Hustlers.

This is too much money: On Netflix’s earnings call, Sarandos pointed to “big event films” like The Gray Man and Knives Out 2 as a way of driving sub growth. Gray Man, starring Ryan Gosling and Chris Evans in a $200 million-plus budgeted film directed by Avengers: Endgame duo Anthony and Joe Russo, will hit select theaters July 15 before bowing on the service July 22. Meanwhile, Knives Out 2 — the next chapter of the whodunit franchise from director Rian Johnson and star Daniel Craig, for which Netflix hammered out a $469 million deal in March 2021 — is set to bow in the fourth quarter of this year. “The upcoming slate in ’22, we’re confident, is better and more impactful than it was in ’21,” Sarandos noted to analysts on the April call.

No more bloated vanity projects: One thing many agree on is that the era of expensive vanity projects at Netflix, whether animation or live action (like Martin Scorsese’s $175 million The Irishman), is likely over. “This tendency to do anything to attract talent and giving them carte blanche is going away,” says one person. As always, there will be exceptions — this is Hollywood, after all — but in essence, this new era seems to be marked by one idea: discipline.

[From THR]

I think the most successful Netflix projects – to me – are episodic television events like The Crown, The Queen’s Gambit, Emily in Paris and Bridgerton, plus their low and mid-budget movies. Romantic comedies are no longer welcome in movie theaters, but they’ve found a charming home on streamers like Netflix. I would also think that Netflix will probably offer even more documentary and docu-series programs since those are A) not expensive to make and B) easy to binge-watch, especially when it’s about crime, royals or celebrities. And no one thinks it’s a good idea to give an auteur $175 million for a gangster movie, Jesus H. I also think the Knives Out deal sounds completely f–king bonkers. Less of that.

(Oh, I loved that The Lost Daughter was on Netflix. I enjoyed that so much!)

Photos courtesy of Netflix, Avalon Red.

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36 Responses to “Netflix’s ‘era of expensive vanity projects’ is over, no more ‘carte blanche’ deals”

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  1. Colby says:

    I’m sorry…..did I read that right? Almost half a billion dollars for Knives Out 2?

    I agree with Kaiser here. Good, prestige TV is the way forward. These insane bloated movies are doing them no favors.

    • Kaiser says:

      I think the deal is more than just one sequel, I think Netflix locked in several Knives Out sequels. But the number is insane.

      • Colby says:

        Ok that makes much more sense. I mean, it’s still bananas. But much better than all that for one movie.

      • BeanieBean says:

        They did use the term ‘franchise’. The whole better, bigger, fewer thing sounds like what Bill & Cathy Cambridge told us they would be doing, and we know how that turned out.

    • Becks1 says:

      That’s an insane number. I could see it if they were going to make the follow ups into a series, that could actually be effective, but even for a few movies its insane.

  2. Robert Phillips says:

    Two things they need to do. One stop releasing the whole series at once. Do it weekly like network tv. That way you can build an audience. And keep them watching netflix afterwards. And two realize that we are still in a pandemic. Ukraine is at war. We have shooting in the U.S. every weekend. Yet every time I hear a director talking about a movie or series. They say it’s like so and so yet darker. We don’t want darker right now. We get that from the news. We want comedies or action movies to take our minds off of the darker.

    • Wednesday Addams says:

      I still like dark. Bring it on!

    • Colby says:

      Also it’s just plain economics at some point. There are also so many streamers now – you’re paying over 100$/month easy if you have all of them. Perhaps people are dropping Netflix to save money

    • BayTampaBay says:

      I see where you are coming from but I myself prefer binge-watching on the weekends.

    • MeganC says:

      Netflix can’t compete with HBO and Disney at the same time. They need to go back to having their own niche and not trying to out gun the other streamers.

    • Becks1 says:

      I think there is a market for dark movies as long as there is some closure or victory at the end. People like knowing that there can be a light at the end of the tunnel.

      I agree re: dropping an episode at a time, especially for their “big” series. We were talking about this yesterday for Stranger Things…..drop two episodes to get people hooked, and then one a time for the next month or whatever. Apple does this, amazon does this, Disney does this. I guess Netflix is trying to stick to the original setup and maybe they think it helps them to stand out, but really if I didn’t want Netflix, but wanted to watch Bridgerton, I would just sign up for one month, watch Bridgerton and anything else I wanted to watch, and then cancel it. It takes two months to get through For All Mankind on Apple (its the BEST series and its back on June 10!!!)

      • Christine says:

        To be fair, on those other streaming services I wait until the show is done and then binge it for that month. So it’s the same either way. I like the flexibility of watching a show’s episodes whenever I want.

      • Becks1 says:

        I’m sure some do that, but I bet you a lot of people don’t. Or you get invested in another series on that platform and have to stick around, etc.

        I also think another difference is that Apple and Disney have a better price point in general. Apple is 5 dollars a month, I think? Now there is no back catalog (meaning its all Apple originals and that’s it), but I still think that’s pretty reasonable for the quality of the shows they put out. I think Disney is around 7 a month? and they have a HUGE back catalog, all the SW and Marvel movies, all the original disney movies, etc. That’s a pretty good deal all things considered.

  3. FancyPants says:

    I’ve been clearing out my Netflix list this week due to COVID quarantine, finally watching some movies that have been on my list for literally years. I like foreign horror/suspense movies, even though they can really be hit or miss, and these have all been hits so far! A lot have been the “Netflix Originals,” I have been pleasantly surprised. I wish I could get myself to pay enough attention to watch more of these series that have been on my list forever too now.
    Some non-Netflix stuff I have watched too Is “The Lost City” (dumb but totally watchable) and “Severance” (took a while to get going but now I really want more!) and “Yellowjackets” (this better not turn out to be a dud like “Lost” did).
    And “The Northman”- gah it was so bad, I stopped it and came back to it three separate times, but I couldn’t even finish it!

    • Colby says:

      Yellowjackets!!!! Love that show so far. I agree- if this turns Lost or Walking Dead on me I will cry lol. We just have to hope they have a full story, beginning to end, planned like Breaking Bad so things don’t go off the rails.

      • FancyPants says:

        Yes! I didn’t realize there would be more seasons and the story would not be finished, or I might have waited to start it because my tiny peabrain does not retain plot details like it used to… but I am dying to know how they were rescued and what was up with that opening scene! And the baby?!?

    • BayTampaBay says:

      Have never seen “The Northman” but “Vikings: Valhalla” on Netflix was excellent.

      • FancyPants says:

        That’s on my list too! I think it popped up after I watched “The Last Kingdom,” which I really enjoyed and am now looking forward to the movie they have planned based on the series. Maybe I will try to watch “Vikings” this afternoon…

    • Nic says:

      The thing I like about Netflix is that I don’t have to wait weeks for the whole series to come out, that’s the whole reason I got rid of cable. I agree with the other person who said they wait until the whole series comes out to watch it, I hate watching more than one show at once as I forget what is happening, end up loosing interest, and just stop watching all together.

  4. Annaloo. says:

    Could they improve their interface? It’s awful! Confusing and the autoplay is annoying af

  5. Flowerlake says:

    One of the main reasons I have Netflix, is that they don’t just make UK/US series, but make series in other countries with their local talent too. Makes sense as thereare so many Netflix members from all over the world.
    I like seeing other stories and perspectives as well and think it’s important there is more access to non-English media.

    If they will cut back a lot on that, I will probably stop.

    (Any suggestions for what to watch next are welcome 😀 )

    • Little Red says:

      Yes, the selection of non-US/UK shows and movies is really good on Netflix. This is the reason why I still subscribe.

    • WiththeAmerican says:

      Those are my favorites as well! I love watching TV shows from a variety of non-English speaking countries especially. It feels like I’m visiting their country, learning a tiny bit of the language.

    • MsIam says:

      I also like the none UK or US movies. I started reading some Nigerian novels and now I’ve discovered the movie on Netflix, along with Kenyan and South African films. Some of them are cheesy but its interesting to see a different perspective.

    • BeanieBean says:

      Both Acorn & Amazon Prime have lots of TV series & movies from other countries. I really enjoy those, too. I just finished an interesting Irish/Belgian cop series & found it fascinating.

    • kirk says:

      Agree on non-English. With zero foreign language skills, I like to watch in original language audio with English subtitles. Seems like audio translation is less authentic, works too hard at matching lip movements which seems to miss meaning or nuance.

      After seeing Diego Boneta on Trevor Noah Daily Show, I watched Luis Miguel: The Series – interesting (and shocking since I didn’t know the story). Mark Burnett is producer, but series is more of a dramatization than reality show. Despite hating Mark Burnett for making donald trump palatable, this series is very good. The father, played by Óscar Jaenada, is unremittingly harsh; he said playing the character exhausted him. After watching series, I even started listening to LuisMi on Apple music.

      Several Harlan Coben mysteries have been produced in various languages. Didn’t realize he was original book author on creepy French ‘Gone for Good.’ His ‘The Stranger’ is English (UK), but so compelling I had to stay up way late watching. Coben is NJ based prolific author who apparently has 14-book to series deal with Netflix. Polish adaptations are great.

      Swedish “Dancing Queens” is hilarious, heartwarming LGBTQ / dance movie.
      Swedish “Anxious People” suspense series is based on book by Swedish novelist.

      Spanish “1000 Miles from Christmas” is absolutely hilarious Christmas movie about grumpy accountant.
      But I switched off 10 minutes into Colombian “An Unremarkable Christmas;” just couldn’t get into it.

      Chinese – surprised by several series that seemed like something I’d like, but found out they were Chinese.

      • kirk says:

        French – Omar Sy is so great in Lupin; haven’t finished watching S2, but hear S3 is coming.
        Omar Sy is fabulous in “The Intouchables,” avail on both Netflix and Amazon Prime.
        Netflix commissioned another Omar Sy movie, “The Takedown,” out now. Per Forbes it helps to have previously seen ‘On the Other Side of the Tracks’ (Roku) to appreciate buddy-cop relationship. Haven’t seen either yet, but Takedown supposedly explores racist, nationalist, far-right populism trend.

        Chinese – Am actually pretty curious about Chinese stuff on Netflix and how what gets made in authoritarian country. Surprising details about daily Chinese life revealed.

        Anime – lots on Netflix.

  6. Kathryn says:

    I’m sure Hollywood insiders talk about it but I feel like there should be more attention on the fact they paid Ryan Murphy $200M for a slew of projects and the only one that got a little buzz was Ratched and even that wasn’t really well received. They threw hundreds of millions at things that didn’t go very far and it’s coming back to bite them.

    • Christine says:

      Ryan Murphy’s projects are so strange to me. He’s able to come up with interesting, unique ideas but doesn’t have the ability to follow through all the way.

      • North of Boston says:

        RM also has a particular angle that he brings to everything IMO … find the most outrageous or off putting or loud/shiny or salacious characters, plot points, perspectives and then milk TC out of them. I’m not sure how much of a sustained audience there is for that these days when the entire world has a front row seat to stuff like that daily, for free.

        At this point I figure that I’m just not the target audience for his shows. Even 911, which has cast members I like a lot and a premise that appeals to me, and in theory I’m interested in most of the characters, but I can’t watch a whole episode without being reminded that it’s a Ryan Murphy show that is just going to careen from shocking to flashy to shocking over and over. With no heart and no there there.

  7. Rice says:

    I think they just made bank with Stranger Things S4. Then there are the movies from South Korea. Love, Death & Robots also has a huge following.

  8. D says:

    In a world that feels like a living horror show every day, I turn to Heartstoppers to take me out of my funk. I’ve lost count how many times I’ve watched an episode or just a scene to make me feel better, and I’m not a teen nor gay. It’s just an amazingly lovely show. For that reason alone I can forgive Netflix for the 80% crap product.

  9. AngelaH says:

    I’m still bitter at them for cancelling Daybreak after 1 season. I freaking loved it. Now, my niece is gutted over pulling the Wings of Fire series! We were going to watch and discuss.

  10. topherben says:

    I find it weird that with the recent issues they’re having, they’re still leaning in on being a movie studio rather than focusing on TV, which is where almost all of their success has been. when was the last time any Netflix movie drove an increase in subscriptions or even became a “cultural event” compared to their television shows?

    Besides, who was asking for all those overhyped crap movies anyway?

  11. HeyKay says:

    Well, I’ve been thinking of dropping Netflix.
    Peaky Blinders last season is coming, so I’ll watch that.
    The Witcher and Bridgerton are about the only 2 I’ve made a point to watch
    The Wiggles kid show Ready, Steady, Wiggle has been in heavy play and they stopped that in May.

    Santa Clarita Diet was funny, and original. Of course that was cancelled.

  12. The Recluse says:

    I’m just happy that they took on Lucifer and finished it up for all of us fans.