Note: This story has been updated with a statement from Netflix’s CCO Ted Sarandos refuting aspects of The Information‘s report.
A new report claims that Netflix could be altering its approach to greenlighting expensive original films. While the streaming service previously gained a reputation for spending actual bukoos of money on original films and television series, a few expensive flops have reportedly spurred Netflix to be choosier when it comes to shelling out the big money.
This according to a report from The Information, which says Netflix chief Ted Sarandos told several of his high-ranking TV and film executives in early June that the company needed to be more picky with its spending on big budget productions, focusing on projects that will bring in large numbers of viewers instead of justifying high price tags with only critical acclaim.
A Netflix spokesperson declined to comment on specifics about its internal metrics, but said the company uses viewing relative to cost as one measure of success and is always looking for ways to get better. “There’s been no change to our content budgets, nor any big shifts in the sorts of projects we’re investing in, or the way we greenlight them,” the spokesperson said.
And while The Information cited J.C. Chandor‘s dramatic thriller Triple Frontier as an example of a recent misfire, Netflix has reached out to Collider to refute this. “We’re incredibly proud of Triple Frontier, one of our most popular original films. 63 million member households have now watched the movie since it launched in March, and we look forward to working on more projects with this talented cast, producers and writer/director J.C. Chandor,” said Ted Sarandos, Chief Content Officer, Netflix.
Since Netflix doesn’t release all viewership data it’s hard for the public or press to discern what was a hit and what was a flop—and is why we’re so dubious when Netflix releases select data. If they’re not also going to reveal when films and shows aren’t hits, it’s tougher to believe their “successes” at face value.
But if The Information’s report is correct (and to be clear, Netflix seems to be refuting it outright), Netflix could be altering its approach ahead of the streaming wars to come, with Disney, WarnerMedia, and NBCUniversal all prepping to launch their own streaming services in the near future.
This isn’t entirely surprising. In its early days, Netflix succeeded by building up a robust and diverse library of titles, big and small. In order to build up this library, Netflix had to spend money. A lot of money. But this past spring the streaming service achieved immense critical acclaim on the feature side with Roma, which won three Oscars and was a serious contender for Best Picture. And the streaming service’s stock soared last fall when it took in a record 23 Primetime Emmy Award wins, tying with HBO for the year.
In short, Netflix is now taken seriously as a TV and film producer, so they don’t really have to try so hard anymore. And with its library continuing to build, it appears they’re now turning their focus to curbing costs to further bolster their position. This doesn’t just mean turning down expensive projects, but also cancelling more shows that aren’t working. It wasn’t too long ago that Netflix appeared to renew everything, but recently shows like Chambers, Gypsy, the wildly expensive The Get Down, and even the critical darling One Day at a Time got the axe.
It’ll be interesting to see how this affects Netflix’s position in the realm of film. It’s gained a solid reputation for greenlighting projects that other traditional studios would turn down (like Triple Frontier), but will cost-curbing force Netflix to say “no” more often? Where does the line get drawn? Will the expensive art movies be reserved only for major filmmakers like Martin Scorsese and Alfonso Cuarón? There are still a number of unanswered questions, but if this new report is true, it’ll be very interesting to see how the Netflix business model adjusts going forward.