Netflix has a message for Hollywood: We’re not broke.
In the wake of a massive stock slide triggered by a subscriber dip during the first quarter, Netflix co-CEO Ted Sarandos, head of global film Scott Stuber and head of global television Bela Bajaria have launched a charm offensive, stressing to top creators and agents that they will continue to spend aggressively to make and market movies and shows. In calls and in-person meetings, sources say they have positioned the April stock drop as a setback, reassured filmmakers and showrunners that they remain well-capitalized and informed them that they don’t believe the answer to their current predicament is to stop competing for buzzy content.
Also mentioned: that their content budgets are locked for 2022 and 2023 (Netflix spent $17 billion on content in 2021 and expects to shell out the same this year). A source familiar with the company says that agency and creator check-ins are routine. The source also stresses that Netflix continues to have over 200 million paying subscribers, giving it financial hef.
Netflix has made two recent moves that signaled a willingness to still spend big. On May 21, the streamer dropped $50 million on the feature film package “Pain Hustlers,” from Emily Blunt and David Yates, out of this year’s Cannes Film Festival. Then last week it set up a “Squid Game”-inspired reality competition series with an eye-popping grand prize of $4.56 million.
But producers and production companies have already begun bracing for belt-tightening, as has the streamer, with a second round of layoffs expected this week. Even before Netflix ceased to be a Wall Street darling, the company was economizing. In pitch meetings, executives said that they were looking to cap shows at three seasons, according to sources familiar with the process. Some believe Sarandos thinks that viewers get bored and tune out after that many episodes, though those close to him refute this. Sarandos, they say, enjoys Netflix’s freedom from the conventions of linear television and does not find it mandatory to set strict episode and season counts.
Regardless, many of the creatives hoping to make Netflix their home have spent more time sketching out alternate scenarios for the shows that they pitch, giving the streamer a wider budget range and providing them with more information about what the cost structure would be look like for , say, a six-episode season versus a nine-episode order.
Everyone, it seems, is making more of an effort to live within their means.