This explains why so many new Netflix films have been
appearing in the “Recently Added” row of your Netflix app.
In 2018, the company released more than 80 original movies, surpassing all the major studios combined. Its 2019
slate includes big-budget features from Martin Scorsese
(The Irishman), Michael Bay ( 6 Underground), and Steven
Soderbergh (The Laundromat). Netflix even recently acquired a top Oscar consultancy—the one that ran the Best
Picture campaigns for both La La Land and Moonlight.
Netflix’s foray into movies is proving complicated,
even messy, as it comes up against Hollywood traditions
and practices that, for once, it can’t gleefully knock down
with a battering ram made of cash. There have been
reports of face-offs between Netflix’s Hollywood-based
executives—who value relationships with talent when
making creative decisions—and the techies in Silicon
Valley who favor its algorithms. Then there’s the debate
over Hollywood’s hallowed “theatrical window,” the
weeks between a film’s release in theaters and its availability for home viewing. Respecting that time frame has
become an irritating thorn for a company that has prided
itself on doing things its own way.
Nowhere was this more evident than in Netflix’s last-minute decision to release Roma, a critically lauded
black-and-white film from Oscar-winning director Alfonso Cuarón, in theaters three weeks before launching
the movie on the app in December. Typically, the streamer
has released a select number of films in theaters in order
to qualify for awards, but they have simultaneously premiered on the service, a practice that both Ted Sarandos,
Netflix’s chief content officer, and CEO Reed Hastings
have passionately defended, much to the ire of cineasts
who believe in the communal, big-screen experience.
Roma was to follow the same plan—Hastings said as
much in his letter to shareholders in October. But Cuarón
balked, and Netflix relented.
In theory, Netflix’s willingness to bend should attract
more filmmakers—and benefit the company. Netflix bid
on Crazy Rich Asians, for example, but the filmmakers
decided to go with Warner Bros. so that the movie would
be seen en masse in theaters, a move that helped turn the
film into a cultural phenomenon. Crazy Rich Asians became one of the most profitable movies of 2018, grossing
$236 million globally on a reported production budget of
$30 million. Its profits are likely already $150 million, or
37% of Netflix’s Q3 2018 earnings.
The truth is, Netflix is still perceived in Hollywood
as the place to sell projects the traditional studios won’t
make. Netflix bought The Irishman after Paramount
withdrew from the project because of its projected
$125 million budget (which it has reportedly overrun).
The Ryan Reynolds–led 6 Underground—which is being
cofinanced and distributed by Netflix—also couldn’t get
a studio green light because of its cost, according to a
The lingering question is whether putting Roma in
theaters represents an aberration to appease a prestigious
filmmaker or a real pivot. (Netflix declined to comment for
this story.) Netflix has made concessions to Hollywood in
the past. Even though it once lauded its recommendation
algorithms as all it needed to find an audience for its programs, it increased its marketing spending to a projected
$2 billion in 2018, a 56% boost from the year before.
In the days following the Roma announcement, directors and agents barraged Netflix demanding to know who
else would be getting the Cuarón treatment. But Netflix
didn’t have an answer, or even a clear policy on how it
would determine such things in the future. (In December, Robert De Niro revealed that The Irishman would be
shown in theaters.) “They’re a streaming company,” says
one agent. “I don’t think Reed Hastings has any interest”
in shifting Netflix’s model.
If Netflix embraces theatrical runs, it
could become beholden to the kind of considerations that the studios use to determine
whether to make a film: Will a certain star
play well in China? Will sales to international
markets justify a film’s budget? It would also
have to deal with box-office performance affecting its talent negotiations. (In the case of
Roma, Netflix avoided such scrutiny by renting out the theaters that the movie played in,
keeping it from having to report box-office
grosses. It could do this on a steady basis
if it winds up buying an art-house cinema
chain, as has been rumored.) “Everyone has
an algorithm,” says Anthony Bregman, a
producer of the Nicole Holofcener film The
Land of Steady Habits and Tamara Jenkins’s
Private Life, both of which wound up at Netflix after studios insisted on creative and financial concessions that
the filmmakers weren’t willing to make.
Netflix’s freedom from those strictures has allowed it
to lean into mid-budget dramas and romantic comedies
that are ignored by the studios, which focus almost
exclusively on globally appealing franchise films with
built-in fan bases. Whatever you may think of the critical merits of the teen rom-com The Kissing Booth, which
Netflix says is one of its most successful original films,
it probably never would have been made anywhere else.
Then there are the smaller, more daring projects, like Paul
Greengrass’s 22 July, based on the 2011 terrorist attacks in
Norway. “I don’t know who would have made that,” says
one manager. “Thank God [Netflix is] doing that stuff.”
There could also be a simpler reason for Netflix’s sudden filmmaker friendliness: Movies offer more brand
prestige than television—not to mention personal validation for Netflix brass. Says one insider: “Ted [Sarandos]
wants to win an Oscar. The Emmy thing, he’s figured out.
He wants an Oscar.”
WIN AN OSCAR.
28 FASTCOMPANY.COM FEBRUARY 2019
Behind the Brand N