One of our most popular articles recently discussed how Netflix was making bigger movies and TV shows and betting on itself. Since writing that article a month ago, Netflix has doubled down. We got the news that it was spending as much as $30 million an episode on Stranger Things throughout its final two seasons. Now, we have the release of The Gray Man, a $200+ million action/thriller, and dozens more mid-budget movies and TV shows. Those costs add up.
This is not just about Netflix trying to get you with new items. It also needs to bolster a fading library. The way Netflix stocks movies is that they license them from studios. They basically rent them to make them available to the public.
Well, as each studio gets its own streaming platform, they're consolidating their libraries. That means way fewer titles available to outside sources, like Netflix.
'Squid Game'Credit: Netflix
Netflix Is Making Expensive Bets—Will They Pay Off?
So as Netflix sees its own library constrict, it needs more original content than ever to bolster what's available. And those price tags are much higher than just a few tentpole movies. They're going to have to spend billions to keep the lights on. This was always going to happen. It was the natural future. But just as the pandemic drove people to Netflix and caused its stock to soar, the return of theaters and the disappearance of a library are all coming to a head.
This is a double-edged sword. Just as Netflix was able to raise prices because people relied on it during the pandemic, now people feel okay cutting the service off as other places get better libraries and run cheaper. Recently, smaller competitors like Showtime, Starz, and Paramount+ offered 99-cent deals through Amazon for Prime Day. Meanwhile, Netflix wants you to chip in $20 a month. And while I loved Squid Game, I do think the selection is getting thin.
Netflix's play was to make a bunch of big, splashy movies to draw your interest. But I think they lost what actually made them special.
'The Adam Project'Credit: Netflix
Netflix Needs to Go Back to its Roots
The streamer used to thrive on giving auteurs checks to make the movies they wanted. And it used to place much smaller bets on emerging filmmakers. These were smart plays. Sure, they weren't massive movies like Red Notice, but they took prestige swings that came with big stars and, sometimes, respect. And their smaller movies like Kissing Booth spawned franchises that fostered talent.
This slow build was fiscally responsible and opened the door for a continuation of collaborations. It also didn't force big movies based on intellectual property. It allowed for original ideas to grow. And while not all of them were successful, films like Bird Box and even shows like Stranger Things became massive thanks to bets on ideas.
'Stranger Things'Credit: Netflix
It Can't Just Be Content
Here's the thing that's made this a little harder to deal with—Netflix used to treat movies and TV like art. And recent changes and bets seem to show it treats it only like content. Everything is just a play to get more money, and not a play at art. If Hollywood truly is the intersection between the two, there needs to be a balance, and the rest is shifting.
I want Netflix to thrive because it has the best chance of getting a studio to make bets on people trying to break in. But as it moves away from that, I fear Hollywood might constrict into something virtually impenetrable.
But we shall see.
Let me know what you think in the comments.
