Bigger, better, less. It’s the chorus inside Netflix that features movie executives, led by the division chief Scott Stuberare struggling to operate as the digital streaming giant changes course and faces new realities, such as lagging subscriber growth (it lost 200,000 subscribers in its last quarter) and growing competition (the Disney bundle of Disney+, Hulu, and ESPN+ now has 205 million combined subscribers, just behind Netflix’s 221 million global subscribers).
The Hollywood Reporter spoke to multiple sources, ranging from executives to producers to company-related agents, to paint a picture of a streaming giant trying to regain its mojo after a shocking April 19 earnings reveal (Netflix has lost 44% of its value shares since that day). “Morale is stuck at the inventory level,” says one executive half-jokingly. Another executive describes the mood within Netflix at the moment as “distracted” given the changes.
It’s easy to see why. The company, in response to Wall Street, took cost-cutting measures such as laying off more than 150 employees, or 2% of its workforce. Television and other parts of the business have taken their beating, but special attention is being paid to the feature division. Much of the cuts wiped out the children’s and family films division, and the original independent feature division, which made films with budgets under $30 million, also saw its ranks cleaned out.
As it moves forward, Netflix wants to focus on making bigger movies, making better movies, and releasing less than before at a blistering pace. “Just a few years ago, we were struggling to monetize the small art film market,” the Netflix co-head said. Ted Sarandos told analysts on the company’s April earnings call. “Today we release some of the most popular and watched films in the world. Over the past few months, things like Don’t look up and red notice and Project Adam, as examples of this. But what this “bigger, better, less” directive means is unclear to those 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 production will be reduced, reducing the need for as many executives. “They were overstaffed with executives,” this insider explains. Also, bigger doesn’t necessarily mean more $150 million movies. Expect to see a more subtle shift — instead of making two movies for $10 million, for example, the company will make one for $20 million. “The goal will be to create the best version of something instead of belittling it for quantity,” an insider said. And the streamer remains in the acquisition game, as evidenced by the recent deal of over $50 million for the Emily Blunt Thriller in French Adventurers of Pain.
During Netflix’s earnings call, Sarandos highlighted “big event movies” like The gray man and Knives Out 2 as a way to stimulate undergrowth. gray manfeaturing Ryan Gosling and Chris Evans in a film with a budget of more than 200 million dollars directed by Avengers: Endgame duo Anthony and Joe Russowill be released in select theaters on July 15 before bowing to the service on July 22. Knives Out 2 — the next chapter in the director’s thriller franchise Rian Johnson and star Daniel Craig, which Netflix struck a $469 million deal for in March 2021 — is expected to bow in the fourth quarter of this year. “The upcoming 22 slate, we believe, is better and more impactful than it was in 21,” Sarandos told analysts on the April call.
Animation is also under scrutiny, with a disciplined ax being brought to bear on projects that were on the bubble and the frequency of releases also being decreased, although “a new movie every week” is still the goal, whether it’s whether live action or animation.
The moves are a far cry from just a few years ago, when movies costing more than $100 or $150 million were rare. It was also the time when Netflix was frequently cited in the media as the savior of mid-budget film and once-theatrical staples like romantic comedies and thrillers. Always be my maybe, The kissing booth and To all the boys I’ve loved before became hits, made their actors social media stars, and even launched mini-franchises.
The company is also not giving specific guidelines at this time. “Conversations will be happening with producers and directors in the coming weeks about size and genres,” says a producer who has a book meeting and is eagerly awaiting a preview. But it’s an uncertain time for the streaming giant, which could see even more cuts and possible executive exits, leaving some producers and agents wary. “Am I comfortable bringing them a package right now? No, I’m not,” says a partner. (co-head of Netflix Hastings Reed didn’t exactly give the Stuber movie chef or the TV chef Bela Bajaria a boost of confidence when Maureen Dowdin a New York Times profile posted on May 28, when asked about the likelihood of senior executives staying put and he replied, “Uh, the way we’re set up, no one can make that assumption.”)
One thing many agree on is that the era of expensive vanity projects at Netflix, whether animated or live-action (like Martin Scorseseit’s 175 million dollars The Irishman), is probably over. “This tendency to do everything to attract talent and give them carte blanche is disappearing,” says one person. As always, there will be exceptions – this is Hollywood, after all – but at heart, this new era seems to be marked by one idea: discipline.
This story first appeared in the June 1 issue of The Hollywood Reporter magazine. Click here to subscribe.