Netflix broke Hollywood rules to create an $82 billion global streaming colossus that the rest of the entertainment industry was quick to copy.
Netflix broke Hollywood rules to create an $82 billion global streaming colossus that the rest of the entertainment industry was quick to copy. But as growth slows, he’s looking back for a way forward, borrowing a page from Walt Disney’s playbook.
The company that changed the way we watch TV and movies aims to emulate the success of Mickey Mouse and “Star Wars,” trying to build brands that span movies, TV, games and consumer products, executives told Reuters in recent interviews. .
The Netflix teams are planning ways to get more out of Netflix’s biggest shows and movies with universes and characters they can return to again and again. The franchise strategy, details of which are reported here for the first time, is intended to complement Netflix’s efforts to build a vast library of original programming with something for everyone.
“We want to have our version of ‘Star Wars’ or our version of ‘Harry Potter,’ and we’re working really hard to build that,” said Matthew Thunell, the Netflix vice president credited with finding “Stranger Things.” “But those are not built overnight.”
Netflix’s franchise initiative comes at a critical time, following two rounds of layoffs amid subscriber losses. It is racing to build a lower-cost, ad-supported version of the service, which it once vowed never to do. On Tuesday, the company is expected to report the loss of a further 2 million subscribers when it announces its quarterly earnings. Its shares have plunged 70% this year.
Some of Netflix’s current partners, who requested anonymity to protect their ongoing business relationships, said they have been frustrated by what they see as a lack of collaboration between the film and television groups. This has hampered efforts to capitalize on success through sequels, spin-offs or film adaptations of a successful series, they said.
“It feels like you have to fight to build a franchise there,” said a studio executive.
Thunell offered a different view. He and a corporate spokesperson described an environment of close collaboration between creative executives, who can independently greenlight projects but work toward the same goals.
“In a traditional studio, there are huge walls between the feature team, the animation team and the series team,” he said. “Because Netflix is a very young organization, those walls never had time to build.”
‘STRANGER THINGS’ TREATMENT
Netflix executives point to “Stranger Things” as a model. The sci-fi series, now in its fourth season, has inspired merchandise ranging from a Surfer Boy frozen pizza at Walmart to Hasbro’s Magic 8 Ball toys, as well as live experiences. A “Stranger Things” spin-off series and a stage play are in the works.
In the immediate aftermath, Netflix executives said they plan or are in the process of giving at least a dozen series and movies the “Stranger Things” treatment.
The Spanish series “La Casa de Papel” has been remade in Korean and has a spin-off in the works. A prequel to the Regency-era period drama “Bridgerton” has been ordered, as has a no-die reality competition inspired by the South Korean drama “Squid Game.” The fantasy series “The Witcher” spawned an animated movie and is getting a prequel.
The company has also identified three upcoming shows as potential franchises because the stories are well-known and attract integrated audiences.
“The Three-Body Problem,” an adaptation of the first book in a Chinese sci-fi trilogy, is in production with “Game of Thrones” co-creators David Benioff and DB Weiss as executive producers. “One Piece” , based on a Japanese manga series is filming and a live-action adaptation of the animated series “Avatar: The Last Airbender” has just finished filming.
To be sure, not every story works like a franchise.
Executives aim to produce franchises from Millarworld, the comic book publisher Netflix acquired in 2017. The first Millarworld series, “Jupiter’s Legacy,” was canceled after the first season. There are currently six new projects in development and another in production, a spokesperson said, adding that Netflix has plans to explore the villains of “The Jupiter Legacy” in a new series.
“It has to start with the story itself. Does it support that kind of expansion?” Thunell said. “There are some shows like ‘Stranger Things’ that are hugely successful, that have the depth of mythology and additional stories that allow you to go into animation or features or anime. . “
EMERGING FILM FRANCHISES
The movie studio, which started from scratch five years ago, sees a handful of franchises in the making: “Enola Holmes,” about Sherlock’s teenage sister, “Knives Out,” an Agatha Christie-esque mystery, “Old Guard” , about a team of immortals. mercenaries, the action thriller “Extraction” and the zombie tale “Army of the Dead”.
The spy thriller “The Gray Man” opens on Friday. Directors Anthony and Joe Russo, hailed as “franchise builders” by filmmaker Scott Stuber at the film’s Los Angeles premiere, said they created a rich world with expansion in mind.
“We definitely have specifically designed and thought about this narrative in a way that I can carry it forward in other ways,” co-director Anthony Russo said in an interview.
Netflix bolstered its franchise-building efforts through an October 2020 restructuring under new global television chief Bela Bajaria, a former Universal Television executive who developed Netflix comedies like “Unbreakable Kimmy Schmidt” and “Master of None.” .
As subscriber growth slowed in the fall of 2020, Bajaria looked to squeeze more out of expensive deals with producers like “Bridgerton’s” Shonda Rhimes. He also put together a team to develop prestige series and shows (often big effects-based fantasy series) that could become franchises.
Netflix has added consumer products staff and hired internal book scouts to find works to adapt, rather than waiting for outside agents or publishers to bring material to its executives. Thunell called this step a “game changer.” He also created a video game unit.
The company has begun to involve marketing and consumer products staff in the early stages of the franchise creation process. These teams, for example, recently traveled to London to meet with Benioff and Weiss on the set of “Three Body Problem.”
“Army of the Dead” producers Zack and Deborah Snyder provided insight into a virtual reality experience while filming, according to Josh Simon, head of Netflix’s consumer products and live experiences division. His team is now working with the Snyders on ideas related to his next movie, “Rebel Moon.”
“We’re really deep into the production meetings,” said Simon. “We can work years in advance because we have that level of trust and collaboration with creators.”
Steven Ekstract, CEO of Global Licensing Advisors, said “Stranger Things” alone has the potential to generate $1 billion in annual retail sales starting in 2025 from merchandise, events and possibly a theme park or digital avatars.
Netflix would get royalties of around $50 million to $75 million from those sales, plus free advertising from the merchandise. To reach that level, Netflix needs to keep people engaged in the world of “Stranger Things,” he said.
The streaming service has considerably less experience building franchises than its centuries-old Hollywood rivals, said Julia Alexander, director of strategy at entertainment research firm Parrot Analytics.
“Do we have the same confidence in the Netflix machine as we do in the Disney machine? No, but part of that is because Disney spent years determining what that machine looks like,” Alexander said. “For all of Netflix’s dominance in the streaming space, they’re still relatively new to building these kinds of worlds.”