Netflix is changing its movie strategy after huge losses

Mario Tama / Getty Images

It seems as if the New Hollywood era at Netflix has wound down to a close. While the feature film division of the streaming giant has put out a staggering amount of material over the last few years, the company’s fortunes have fallen on more fallow times lately, with users leaving the former king of streaming mountain in droves in the wake of the emergence of multiple similar studio-owned services, customer dissatisfaction with rising prices, and content controversies. So what does the future look like?

The company is hoping to engage viewers with a “bigger, better, and fewer” strategy. In other words, the service will continue to make high-quality pictures with A-list talent … just not as many as in the past.

Netflix co-chief Ted Sarandos explained the strategy to The Hollywood Reporter. “Just a few years ago, we were struggling to out-monetize the market on little art films,” said the chief content officer. “Today, we’re releasing some of the most popular and most-watched movies in the world. Just over the last few months, things like Don’t Look Up and Red Notice and Adam Project, as examples of that.”

All is well and good, but those recent successes haven’t done much for the company’s bottom line or its stock value, down 44 percent since the company’s April 19 earnings disclosure. Is the new strategy likely to change anything, or will it just be (bad) business as usual but with less content?

One insider spoke to The Hollywood Reporter stating the strategy would alleviate some bloviated budgets if nothing else. “They were overstaffed with executives,” said the source.

Viewers sticking with the service are likely to see far fewer big-budget films such as the money-makers Sarandos cited. Instead, scaling back will likely result in more films squeezed out of what might have funded one Adam Project-style film in the past. “The goal will be to make the best version of something instead of cheapening out for the sake of quantity,” says another insider.

In other words, don’t expect to see any Netflix project, Stranger Things notwithstanding, to be duking it out with Disney Plus in terms of relative special effects budget. Nor can one expect prestige projects along the lines of The Irishman to be on the menu for the time being. “This tendency to do anything to attract talent and giving them carte blanche is going away,” another source told THR.