Rival Executives Weigh In on Netflix’s Movie Strategy: ‘They’re Suffering in the World They Created’ | Analysis

Netflix shocked the industry last week with the news that two respected film executives, Lisa Nishimura and Ian Bricke, were leaving the company in an apparent nod toward austerity. But the move left many questioning just what Netflix’s strategy is for its cinematic future, and whether it will lead to a power struggle between co-CEO Ted Sarandos, who is adamant that Netflix is a streaming-first company, and film chairman Scott Stuber, who has stated that he would like Netflix to become a true cinematic force to be reckoned with, an aspiration that may require a far more substantial theatrical investment.

“There are concerns being whispered around the industry that this move from Netflix could be signaling an end to the high-quality content we’ve seen them get behind in recent years, and — potentially — a return to the more formulaic ‘sure thing’ kind of content that is lower cost but more certain financially,” said a leading distribution executive speaking on condition of anonymity to TheWrap.

That shift in strategy might also include conventional marketing and the promise of larger audiences arriving with ad-based subscription tiers.

Nishimura had been at Netflix since 2007, the era of DVDs in red envelopes, while Bricke joined in 2011. The two executives oversaw award-winning documentaries like “American Factory” and “Crip Camp,” and prestigious indies like “The Lost Daughter” and “I Don’t Feel at Home in This World.” They also approved buzzy comedy specials that helped Netflix displace HBO as the go-to destination for stand-up.

Also Read:
How Hollywood’s Guilds Are Preparing for the Dangers – and Benefits – of AI

Netflix declined to comment for this article, instead referring to the official press release offered on Thursday following news of the dismissals in which Stuber thanked Nishimura and Bricke for films like the Oscar-winning “My Octopus Teacher” and “Power of the Dog” as well as “for their contributions to making us a world-class film studio.”

A company insider said Netflix remained committed to making a broad range of movies for its vast audience, and pointed to the nine Academy Award nominations for “All Quiet on the Western Front” earlier this year.

But it’s no secret that Netflix chief Sarandos intends to make fewer movies, with the goal of shifting to bigger and ideally better original films. But fewer films that are bigger in scale, scope and presumed budget may mean less room for lower-budget, demographically niche and comparatively inclusive indie films, and possibly even fewer star-driven, mid-budget, non-IP studio programmers.

It bears repeating that Netflix’s biggest advantage is still that its massive 230 million household viewership base will still press “play” on a star vehicle like Ryan Reynolds’ “The Adam Project” or Sandra Bullock’s “The Unforgivable.” Streaming rivals like HBO Max rely more heavily on theatrical titles.

“I tell you, I’m disheartened by it, to be honest with you,” noted one distribution insider when asked about the executive departures. “It’s like a little bit of an end of an era.”

Back in 2015, Cary Joji Fukunaga’s wild, category-defying “Beasts of No Nation” helped Netflix make a name as a studio that wasn’t afraid of challenging cinematic fare that would stand out in a Hollywood ecosystem caught up in post-“Avengers” fever.

Back then, Netflix’s movie strategy was clear: attract top filmmaking talent and culture-defining titles.

In late 2017, Paramount’s then-worldwide president of marketing and distribution Megan Colligan defended Darren Aronofsky’s divisive drama “Mother!” by arguing that “everyone celebrates Netflix when they tell a story no one wants to tell. This is our version.”

Steven Spielberg was criticizing theater chains, not Netflix, when he discussed Oscar contenders forgoing conventional theatrical release. Indeed, he flipped a key commercial/cultural script. The question went from “Is ‘Crazy Rich Asians’ worth releasing in theaters?” to “Can theaters give ‘Crazy Rich Asians’ a Netflix-sized viewership and pop culture footprint?”

Also Read:
This Story Was Not Written by a Robot: AI and the Future of News Media

That said, both Nishimura and Bricke championed the rom-com resurgence as well as comparatively under-the-radar films like “Purple Hearts.” The military-themed romantic drama, which stars Sofia Carson and Nicholas Galitzine, nabbed 229 million hours globally in the first 28 days. That compared to 254 million for “The Grey Man” and 280 million for “Glass Onion: A Knives Out Mystery” at a fraction of those films’ respective $200 million-plus all-in budgets.

With all the talk of Netflix chasing franchises and IP with mega-budget action fantasies like “Bright,” “Red Notice” and “6 Underground,” it was the rom-coms championed by Nishimura and Bricke like “The Kissing Booth” and “To All the Boys I’ve Loved” that spawned follow-ups and spin-offs. Even sequel-spawning action franchises like Chris Hemsworth’s “Extraction” and Charlize Theron’s “The Old Guard” — both released at the height of the COVID-impacted summer of 2020 — were under-$80 million thrillers.

“They created a false economy to make these huge movies [like “Red Notice”] — vastly overpaying and inflating the overall cost of movie-making,” a top-ranking studio executive told TheWrap.

Every streamer, and every studio that backs them, discovered over the last year that they could no longer count on Wall Street cheering them on while they spent billions for shows and movies that didn’t net huge viewership and didn’t necessarily aid with enticing new subscribers or reducing churn.

The rival studio executive argued that the removal of Nishimura and Bricke may signal the end of Netflix prioritizing feature films when it’s the streamer’s TV series that seems to be driving all the buzz, like “Wednesday” or “Stranger Things.” The individual further explained, “Why not put all your money into huge television shows versus one movie that can break through for a weekend?”

Also Read:
AI and the Rise of the Machines: Is Hollywood About to Be Overrun by Robots?

After all, even big Netflix movies tend to pull much of their viewership in the first 10 days before they are replaced by the next big thing. Long-running titles like “Purple Hearts” are the exception, rather than the rule.

However, another high-ranking exhibition and distribution executive offered measured optimism, arguing that “Netflix won’t stop making movies like ‘White Noise,’ they’ll just make them at a lower cost.” Likewise, the individual argued that the next “The Grey Man” might cost $100 million-$125 million, instead of $200 million.

That includes lowering the back-end payout structure. “Talent may rebel at first,” this insider argued, “but Netflix will still be competitive in terms of upfront payouts within the streaming ecosystem.” Meanwhile, the studio executive interviewed for this article concurred, stating that “Netflix will still make filmmakers a commercial offer they can’t refuse.”

That same studio executive pessimistically declared that “Netflix was the worst thing to happen for the film business, but not in the way you’d expect. They drove up the cost of making film and now they are suffering in the world that they created.”

Conversely, the more optimistic exhibition executive is at least somewhat hopeful that Netflix will continue to invest in indie cinema and documentaries, and that its “big” movies will improve in quality for at least as long as Stuber still is in his post. The truth is probably somewhere in the middle.

Also Read:
Apple and Amazon Are Betting Big on Movie Theaters – and Netflix Risks Being Left Behind | Analysis