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The company that changed the way we watch
television and movies aims to emulate the success of Mickey
Mouse and "Star Wars," by trying to build brands that traverse
film, television, games and consumer products, executives told
Reuters in recent interviews.
Netflix teams are plotting ways to milk more from Netflix's
bigger shows and movies with universes and characters they can
return to again and again. The franchise strategy, details of
which are reported here for the first time, is meant to
complement Netflix's efforts to build a vast library of original
programming with something for every taste.
"We want to have our version of ‘Star Wars’ or our version of
‘Harry Potter,’ and we're working very hard to build that,” said
Matthew Thunell, the Netflix vice president credited with
finding “Stranger Things.” “But those are not built overnight.”
Netflix’s franchise initiative comes at a critical moment,
following two rounds of layoffs amid subscriber losses. It is
racing to build a lower-cost, advertising-supported version of
the service, which it once vowed never to do. On Tuesday, the
company is expected to report losing 2 million more subscribers
when it announces quarterly earnings. Its shares have sunk 70%
this year.
Some of Netflix's current partners, who requested anonymity to
protect their ongoing business relationships, said they have
been frustrated by what they see as a lack of collaboration
between the film and television groups. This has stymied efforts
to capitalize on success through sequels, spin-offs or film
adaptations of a hit series, they said.
"It feels as if you have to fight your way into building a
franchise there," said one studio executive.
Thunell offered a different view. He and a corporate
spokesperson described an environment of close collaboration
among creative executives, who may independently greenlight
projects but work toward the same goals.
"At a traditional studio, there are these big walls between the
feature team and animation team and series team," he said.
"Because Netflix is a very young organization, those walls just
never had time to be built."
'STRANGER THINGS' TREATMENT
Netflix executives point to "Stranger Things" as a model. The
science-fiction series, now in its fourth season, has inspired
merchandise from a Surfer Boy frozen pizza at Walmart to Magic 8
Ball toys from Hasbro, plus live experiences. A "Stranger
Things" spin-off series and stage play are in the works.
On its heels, Netflix executives said they plan to or are in the
process of giving at least a dozen series and films the
“Stranger Things” treatment.
The Spanish series “La Casa de Papel” has been remade in Korean
and has a spin-off in the works. A prequel to the Regency-era
period drama “Bridgerton” has been ordered, as was a reality
competition in which nobody dies inspired by South Korean drama
“Squid Game.” “The Witcher” fantasy series spawned an animated
film and is getting a prequel.
The company also identified three coming shows as potential
franchises because the stories are well known, bringing built-in
audiences.
"The Three-Body Problem," an adaptation of the first book in a
Chinese science-fiction trilogy, is in production with "Game of
Thrones co-creators David Benioff and D.B. Weiss as executive
producers. "One Piece," based on a Japanese Manga series, is
shooting, and a live-action adaptation of animated series
"Avatar: The Last Airbender" just completed filming.
To be sure, not every story works as a franchise.
Executives aim to produce franchises from Millarworld, the comic
book publisher Netflix acquired in 2017. The first Millarworld
series, "Jupiter's Legacy," was canceled after the first season.
There are currently six new projects in development, and another
in production, said a spokesperson, who added that Netflix has
plans to explore the villains of "Jupiter's Legacy" in a new
series.
“It has to start with the story itself. Does it sustain that
kind of expansion?" Thunell said. "There are some series like
'Stranger Things' that are wildly successful, that do have the
depth of mythology, and additional stories that allow you to
move into animation or features or anime."
EMERGING FILM FRANCHISES
The film studio, started from scratch five years ago, sees a
handful of budding franchises: "Enola Holmes," about Sherlock's
teenage sister, "Knives Out," an Agatha Christie-style mystery,
“Old Guard," about a team of immortal mercenaries,
action-thriller "Extraction" and zombie tale “Army of the Dead.”
Spy thriller "The Gray Man" debuts Friday. Directors Anthony and
Joe Russo, whom film chief Scott Stuber hailed as "franchise
builders" at the movie's Los Angeles premiere, said they created
a rich world with expansion in mind.
"We've definitely specifically designed and thought of this
narrative in a way to carry it forward in other forms,"
co-director Anthony Russo said in an interview.
Netflix bolstered its franchise-building efforts through an
October 2020 restructuring under new global TV chief Bela
Bajaria, a former Universal Television executive who developed
such Netflix comedies as "Unbreakable Kimmy Schmidt" and "Master
of None."
As subscriber growth slowed in fall 2020, Bajaria sought to
extract more from pricey deals with such producers as "Bridgerton's"
Shonda Rhimes. She also formed a team to develop prestige series
and spectacles (often big, effects-driven fantasy series) that
could grow into franchises.
SCOUTING MATERIAL
Netflix added consumer products staff and hired in-house book
scouts to find works to adapt, rather than waiting for outside
agents or publishers to bring material to its executives.
Thunell called this step a "game changer." It also created a
video games unit.
The company has begun involving marketing and consumer products
staff early in the franchise-building process. These teams, for
example, recently traveled to London to meet with Benioff and
Weiss on the "Three-Body Problem" set.
"Army of the Dead" producers Zack and Deborah Snyder provided
input on a virtual reality experience while they were filming,
according to Josh Simon, head of Netflix's consumer products and
live experiences division. His team is now working with the
Snyders on ideas tied to their next movie, "Rebel Moon."
"We're really deeply immersed in production meetings," Simon
said. "We can work years ahead because we have that level of
trust and collaboration with the creators."
Steven Ekstract, CEO of Global Licensing Advisors, said
"Stranger Things" alone has the potential to generate $1 billion
in annual retail sales starting in 2025 from products, events
and possibly a theme park ride or digital avatars.
Netflix would reap royalties of about $50 million to $75 million
from those sales, plus free advertising from merchandise. To
reach that level, Netflix needs to keep people engaged with the
"Stranger Things" world, he said.
The streaming service has considerably less experience in
erecting franchises than its century-old Hollywood rivals, noted
Julia Alexander, director of strategy at entertainment research
firm Parrot Analytics.
"Do we have the same confidence in the Netflix machine as we do
the Disney machine? No, but in part that comes from Disney
spending years determining what that machine looks like,"
Alexander said. "For all of Netflix's dominance in the streaming
space, they're still relatively new to building out these types
of worlds."
(Reporting by Dawn Chmielewski and Lisa Richwine in Los Angeles;
Editing by Kenneth Li and Cynthia Osterman)
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