The turnaround of Netflix

NewNetflixLogoOne would be hard pressed to find a more substantial turnaround than the one Netflix has had over the past few years. The company that is now seen as the torchbearer that brings the entertainment industry into the future was not too long ago seen as a company on the brink of collapse. In 2011, when the company decided to first raise its prices, the total value fell by 75 percent with word spreading that the business model is simply a video rental service was no longer sustainable.

It was then that an internal decision was made that has turned the company into the titan it is today: bring original programming to an online network. Begin to treat Netflix as not only a video rental service, but as a content creator itself. The risk was certainly high. Nothing like this had been attempted on such a grand scale. Shows like “House of Cards” were conceived and given $60 million budgets and all Netflix could do was hope that it caught on. It was close to an all or nothing move at the time given the company was already close to teetering, but with the excitement that the original programming was generating and the creative freedom that Netflix was giving its show’s showrunners, another idea was formed between the network and Mitchell Hurwitz, to bring back his long dormant cult hit “Arrested Development.” With the agreement to start the long awaited fourth season, word was quickly spreading about Netflix’s new ventures, and subscribers began to rise. They did even more so when the shows actually aired to rave reviews, and certain unknown shows like “Lilyhammer” and “Orange is the New Black” became hits in their own right. Then the awards season hit and Netflix became the first internet television network to be nominated for Emmy Awards. Not just one or two, either. In the first year of Netflix airing original programming, their shows received a combined 14 Emmy nominations, winning three.

After the success of the first crop of shows, Netflix suddenly had the clout and cash from new subscriptions to advance their original TV shows even more. The second seasons of “Orange is the New Black” and “House of Cards” were even more grand in their budgets and stories, and several more shows were added to their arsenal, including “Bojack Horseman” as well as continuations of previously canceled shows, in the vain of “Arrested Development.” Shows like “The Killing” and “Trailer Park Boys” once again found a home, this time on Netflix and the popularity of the online service has continued to grow exponentially as its content library continued to expand.

Now it seems that the next step has finally come for Netflix. The company’s huge success in the original television market has now led to enough capital being created that according to Netflix chief content officer Ted Sarandos, “It’s time to put our money where our mouth is.” On September 29, Sarandos announced Netflix’s intent to co-finance the sequel to “Crouching Tiger, Hidden Dragon” with The Weinstein company. The new film dubbed “Crouching Tiger, Hidden Dragon: The Green Legend” will be directed by long time Kung Fu stunt coordinator Woo-Ping Yuen, and is set to be released simultaneously in IMAX theaters and on Netflix on August 28, 2015.

Only a few days passed before Sarandos announced that “The Green Legend” was not the network’s only foray into the world of film production. On October 3 it was also revealed an even more ambitious deal, this time with Adam Sandler and his film company Happy Madison. The two have announced that Sandler has agreed to produce and star in four films that will be Netflix exclusive, forgoing theatrical release and placing all of his eggs into Netflix’s basket.

When Sarandos was asked about this brand new outing down the humongous avenue of original feature film production, he replied “Going into original films, the motivation was this: We have three major output deals: We have Disney, which starts with next year’s films. We have DreamWorks Animation, which has shows on Netflix today. Both of those are family programming decisions. They are hugely trusted brands for parents and loved by kids. Lots of repeat viewing. With the Weinsteins, and we’ve said it explicitly, we intend to be highly experimental with the windows and the versions of the movies that we put out when that deal kicks in in 2016. There’s a general consensus that movies on Netflix and other pay services are old, because they are. So for us to meaningfully move the window up to where consumers want to see a movie, we have to step into producing content of our own — similarly as how we did with “House of Cards” when we wanted to release all episodes at the same time. We couldn’t have done that with an off-net show. By doing this, we are putting our money where our mouth is on behalf of the consumer.”

With these announcements combined with the future goals of Netflix to release between 10 and 14 original films a year on top of adding several new series to its lineup, including four Marvel superhero series which will combine into the mini-series event “The Defenders,” it appears as if Netflix has come around from being a simple video rental service into a self sustaining film studio and television network. Only time will tell if this new venture into features will become as successful as the path it took in regards to television, but with the ever growing subscriber base behind it, as well as the critical clout it has gained, its hard to imagine that this company that was pioneering website, that was once seen as circling the drain, not becoming the Hollywood standard in the coming years.

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