Netflix Stresses Business As Usual But Confusion Remains Over Budgets, Commissioning & Canadian Content – Analysis

Amidst lower-than-expected subscriber growth and a subsequent round of circa-150 redundancies, Netflix was all anyone wanted to talk about at this week’s Banff World Media Festival, and while the streamer’s head honchos stressed Business As Usual, sources from outside reported confusing messaging coming from Los Gatos HQ.

A series of panels and keynotes, including one from Head of Global TV Bela Bajaria, were intended for Netflix to stress to the 1,500-strong delegate list of commissioners, execs and journalists that the streamer is still doing what it has always done: commissioning the best producers, writers and directors to make the best shows.

“Back to basics” was the message from Bajaria, who shrugged off the need for “radical change” within the streamer’s ranks. More junior staffers were also pushing the BAU line in private, arguing that now is the time to cut through the noise and focus on what Netflix has always done best.

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But several senior sources from the production community were less sure, reporting confusing messaging from Netflix commissioners when it comes to budgets and the type of programing they are seeking.

Execs reported business affairs-related difficulties when establishing how much is on offer for a particular show during contract negotiations, a reversal of the era when Netflix was seen as very much a blank-check company.

Bajaria laid out the streamer’s plans on record to spend $17B this year but stumbled her way through a question on what direction that spend will head in if the lower-than-expected growth continues, eventually stating it will move “in parallel.”

“This moment has felt a long time coming,” said an indie boss. “[Netflix] felt they could do anything they wanted for a long while and I think that has created a lot of problems.”

While defending Netflix’s “huge subs base and dominant” status within the market, Kevin Beggs, the chair of Orange is the New Black producer Lionsgate TV Group, told Deadline the streamer “may need to be more judicious and disciplined in future.”

Meanwhile, facing up to fierce competition from the likes of Amazon Prime Video and Disney+, along with AVoD players such as Roku who were also present at Banff, Netflix is taking time to figure out the direction that it wants to go in genres such as drama and non-scripted, according to sources.

The recent round of 150 redundancies (more are rumored to be incoming), broken by Deadline, of which some were commissioners, only added to confusion around certain projects.

Deadline was told of one instance of a producer taking a meeting with a commissioner about a project, emailing them hours later to say thank you only to receive an Out Of Office from that person saying they had been fired. Many development projects have been cancelled, according to several.

On the acquisitions side, one senior figure at a sales house said distributors are now more likely to sell shows to multiple local broadcasters in a piecemeal way across the globe rather than licensing to Netflix worldwide — a return to the days before global streamers that would have been unthinkable six months ago.

“It is clear that Netflix is paying less and taking fewer global rights,” they added. “Netflix is being more careful with money and taking shorter windows, so if we can get more money selling to, say, local networks in France, Germany and Australia, then we will do that.”

One exec predicted Netflix can weather the storm, pointing to Reed Hastings’ public volte face over failed DVD rental split-off Qwikster that took place a decade ago.

Canadian Battleground

Netflix dominating the conversation at a festival in Canada felt apt as the nation is the latest venue for the set of regulatory battles facing the streamer. Members of the Canadian government, producers and trade bodies are currently pushing a bill through parliament, entitled C11, which would ensure streamers have to commission a certain amount of local content and meet government-set Canadian Content (known as CanCon) obligations.

The likes of Canadian Heritage Minister Pablo Rodriguez and Canadian Radio-television and Telecommunications Commission Chair Ian Scott were at Banff to make the case for C11 while, in private, Canadian industry figures railed against Netflix’s activity in the nation. One said Canada is being treated like a “production services industry,” adding, “If they want to take advantage of our country then they have to make shows about Canada by Canadians.”

This can’t be what was in mind back in 2019, when Netflix signed a controversial deal with the government that meant it would not pay tax until 2023 and in return spend C$500M ($383M) on English- and French-language content from the country. It should also be noted Netflix’s biggest Canadian series, Schitt’s Creek, was created by CBC and the streamer didn’t board the show until season three.

Pushing Back

With a similar battle raging in Israel, as Deadline revealed recently, it is not surprising to hear that Netflix is pushing back.

Giving recent evidence to the Heritage Committee, Netflix Canada Director of Public Policy Stéphane Cardin, who used to do the same job for the Canadian Media Fund, said the streamer has spent $3.5BN on Canadian films and series since 2017.

“We remain concerned about a rigid approach that would simply transpose the current regulatory requirements of Canadian broadcasting groups onto online streaming services,” he said, pointing out that Netflix wouldn’t have the flexibility to meet obligations in areas such as news and sport and that titles produced or solely financed by Netflix would still not qualify.

“This would not create a level playing field, nor would it be fair or equitable,” he added.

Back at Banff, commissioners from Peter Frielander’s scripted series team told an engaged crowd that they are currently travelling the length and breadth of the country meeting producers, while taking into account market rates to avoid causing the budget inflation that has beset other markets such as the UK.

The debate is reflective of the trouble Netflix could keep running into as it pushes deeper into local territories in search of the next Squid Game, Lupin or Money Heist.

More generally, the battle for the streamer to regain its place sitting comfortably atop of the tree is most definitely underway.

“There are so many ways to consume content now,” one senior industry source mused. “What happens to Netflix in the long run? It’s hard to tell.”

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