Netflix Says Its Films Will Capitalize On Public Buzz, Even Without Theaters, Defends Recent Cancellations


Netflix sees its investment in feature-length movies as “a good investment” — even if they don’t run in theaters — partly because “we can bring films to our members when they want them, which is when the world is talking about them,” chief content officer Ted Sarandos said today following the company’s quarterly earnings report.

Most major theater chains refuse to show the releases because Netflix posts them online right away, without giving exhibition an exclusive window. Netflix plans to produce most of the films itself because “that’s almost impossible to do with a studio partner.”

If Netflix films are good then “our films will be able to attract subscribers and retain subscribers the way our [TV] series have.”

Ozark Netflix

Sarandos also talked up releases planned for the second half of this year starting with Ozark, available next week, followed by the film Death Note and The Defenders. He’s also “incredibly excited” about Bright, which will star Will Smith.

He also says he isn’t worried about failures. “If you’re not failing, maybe you’re not trying hard enough,” he says. Even with recent cancellation of shows including The Get Down and Sense8, “93% of our shows have been renewed….On network television about a third of the content gets cut in the first season.”

Sense8 Netflix

Netflix doesn’t necessarily have to write down cancelled series, CFO David Wells says, because “they may have a story arc that completes the narrative so it is, for us, about the continuity of the viewing over the life of the show….It may have steady viewing over [its] life. ”

The Netflix execs discussed the company in an audio-challenged, 39-minute interview with UBS’ Douglas Mitchelson, who has a “buy” rating on the company. Companies typically hold a live, hourlong Q&A with multiple analysts, and occasionally journalists, after they file quarterly reports.

The content exec says that as Netflix expands globally he has had to work at figuring out what productions will appeal to different audiences.

“We have to get better and better at matching those tastes,” he says. “Those tastes are not as easily aligned with Western tastes. So we’ll invest more time and energy in Asia, putting some people on the ground in Asia that we haven’t historically.”

CEO Reed Hastings says he has little interest in combining Netflix fare with live streamed networks, similar to what Hulu is doing. “We’re really focused on making our network as great as it possibly can be.”

Still, the company is exploring opportunities to let TV and broadband distributors bundle Netflix with other services.

The CEO says he was pleased with last week’s “Day of Action” to rally the public to oppose FCC chairman Ajit Pai’s effort to relax net neutrality rules. “We, other companies and the public have weighed in heavily,” he says. “We’ll see where that goes.”

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