The bubble seems to be bursting? Thanks to a devastating first quarter of the year, and a stock market tumble, there are many changes afoot over at Netflix. Since an earning report on April 19, the company has lost 44% of its stock value, lost 200,000 subscribers, and watched Disney close in on its lead for global subscriptions. As the numbers show, Netflix no longer has the handle on the streaming market it once did. Disney’s bundle of Disney+, Hulu, and ESPN+ now has a combined 205 million subscriptions, just 16 million behind Netflix’s 221 million. So, if Netflix still wants to be the global leader in streaming, things need to change in-house and fast.
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And most of Netflix’s changes are happening in their feature films division, led by Scott Stuber. Following some pretty significant layoffs, including the entire staff of their inclusive Tudum “fansite,” The Hollywood Reporter states that on top of scuttling family live-action film and original independent features divisions, and downsizing their animation projects, Netflix has a new mantra for their approach to their movies: “bigger, fewer, better.” But what exactly does that mean? “Small movies are not going to go away,” said one insider source, but another stated that “the goal will be to make the best version of something instead of cheapening out for the sake of quantity.” So, Netflix plans to reduce the amount of mid-budget original films they produce but ensure they’re of higher quality. Netflix will also keep acquiring distribution rights for movies, like their recent $50 million deal for Emily Blunt‘s thriller “Pain Hustlers.” In that sense, the core of the Netflix film model remains intact.
Netflix also plans to emphasize “big event films” in the future, like Anthony and Joe Russo‘s upcoming $200 million-budget “The Gray Man” with Ryan Gosling and Chris Evans, out this July. Rian Johnson‘s “Knives Out 2,” part of the $469 million deal he and Netflix made for the franchise last March, also fits that mold. That’s a departure from a couple of years ago when Netflix-budgeted films north of $100 million were a rarity. But according to one source, “[Netflix’s] tendency to do anything to attract talent and giving them carte blanch is going away.” So, it sounds like moving forward, Netflix will be much more selective about the people they work with and the projects they greenlight. Big-budget blockbusters still have a place in the Netflix model, perhaps more prominent than before, but Netflix won’t be as keen to give every director a chance to do whatever they want on the platform.
Is this the end of an era for the often-expensive Netflix-produced auteurist vanity project? From the sounds of the things, movies like Martin Scorsese‘s “The Irishman” may not be possible anymore in Netflix’s new direction. Really, it sounds more like the streamer wants to ensure all of its releases have crossover appeal, so they maintain a steady stream of new subscribers. “Knives Out 2” is undoubtedly an auteurist vehicle for Johnson, and he’ll want as much creative freedom as possible on those films. But “Knives Out” is also a lucrative property for Netflix that virtually guarantees the numbers the company wants. Profits and remaining the global leader in streaming are Netflix’s incentives for this new direction in their movies, not so much doing away with giving filmmakers a chance to flex their creative muscles.
Still, it was only a matter of time before the Netflix content bubble finally burst. Will the company remain the #1 streamer by the of the year? Ironically, it may depend on the success of “Knives Out 2,” a film that’s the outcome of a business decision Netflix no longer wants to endorse.