Netflix Abandons Prestige

The Algorithm is in Charge Now

Today The Hollywood Reporter published a piece covering Netflix’s new strategy in its features department which entails making “bigger, better and fewer” movies than it previously has before. By looking at external factors it’s clear as to why Netflix is shifting strategies. Their stock value fell off the proverbial cliff in mid-April and hasn’t recovered since. The market is spooked as subscribers, namely 200,000 in the last quarter, are fleeing the platform.

Netflix wants to move away from films like The Irishman, expensive passion projects, and focus their energy on blockbuster popcorn movies. Now, I can see why they’re doing this, the data says to follow this strategy. Netflix’s most viewed features are Red Notice, The Adam Project, and Don’t Look Up, movies they hope to emulate moving forward. 

My view is that this is a mistake. As Netflix loses subscribers other streaming platforms are growing. Disney+ continues to outpace the platform, adding 9.2 million subscribers in Q1. Viewers who want blockbuster movies have options ranging from Disney+ to Apple TV+ to Amazon Prime Video. Netflix needs to set itself apart from the noise and differentiate their offering to viewers.

I have a few solutions for Netflix that may not be that novel, but are things I have thought about for some time. My fix for Netflix is pretty simple, don’t try to be a Disney or Warner Bros. Dedicate your resources to cultivating niche groups under one roof.

First, Netflix should be the home to auteurs trying to tell a unique story. Movies like The Northman from Robert Eggers received critical acclaim with an 89% on Rotten Tomatoes and a B on Cinemascore but bombed at the box office, pulling in only $67.1 million on a reported budget that ranged between $70-90 million. Netflix should be targeting these kinds of movies to produce. If Netflix can get the budget down from $70 million to $50 million or less the movie could potentially drive viewers to the platform. Another example is Alex Garland’s MEN, which reportedly cost $25 million to make, but has only brought in $6.3 million at the box office. Garland has a fanbase baked in and would certainly drive subscriptions to the platform with appropriate marketing.

Netflix should be looking at companies like A24, who produce wildly popular, yet inexpensive movies, to emulate. Make films for people who are exhausted with superheroes and big budget action movies. Be the company that “saved cinema,” whatever that means.

The streamer already made a name for itself when it seemingly resurrected the rom-com and I think the company should continue that trend. The movies are wildly popular and they should continue to give that audience what it wants. It’s rare to see rom-com make it’s way to the theaters and be successful, a movie like Crazy, Stupid, Love feels like something of a past we’re not returning to and Netflix should capitalize on that.

Now, this idea doesn’t fit in with the feature strategy, but I think it’s an important piece in Netflix trying to cultivate a brand voice. Netflix should be the home for comedy, both standup specials like Dave Chapelle and Kevin Hart, but also unique forms like Bo Burnham’s Inside and I Think You Should Leave with Tim Robinson. Make Netflix the number one home for comedy, be what Comedy Central used to be, bringing in young talent, giving them an opportunity to showcase their talents. A lot has been said about the last time a comedy movie was a hit in theaters. Netflix could do for comedy films what it did for the rom-com. Movies like This is the End or Anchorman or Game Night could have a home at Netflix, low risk high reward productions that drive the form forward. There is an entire audience yearning for unique comedy, and if Netflix were to build out Netflix Is A Joke as a real brand they could capitalize on this and drive subscriptions. 

Instead of creating for audiences that might not be served elsewhere Netflix has fallen into the algorithm trap and is making movies that it views as “money grabs” but instead of box office returns it's an increase in subscriptions. I’d love to see the data that shows that The Adam Project brought in any meaningful subscriptions. The company has thrown hundreds of millions of dollars at Shonda Rhimes and Ryan Murphy, one being a lucrative investment the other a flop, but I’d love to see what the bump, if any, would be if they brought on the Safdie Brothers or Ari Aster to direct features for the platform. 

Netflix had a golden opportunity to be the studio that bucked trends, that made movies for film fans without worry about box office returns. To let directors make their passion projects without fear of failure in terms of money returned. Instead, they blindly looked at the data and decided to stop chasing prestige and started worrying too much about Wall Street.