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Is Netflix’s global dominance a force for good or bad?

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Is Netflix’s global dominance a force for good or bad?

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Life & Arts

Is Netflix’s global dominance a force for good or bad?

The streaming channel is set to spend up to $13bn on shows — but it could also be creating a monopoly on entertainment

How have you been spending the holiday period? Regardless of faith or family, many of us will have lost an afternoon, evening, or possibly even 10 days straight sprawled in front of the television.

If you are one of the 130m people worldwide who subscribe to Netflix, there is a high possibility that this week you will have watched one of the following: The Christmas Chronicles, a family film starring Kurt Russell, which had 20m downloads within three weeks of its release; the Spanish-language film Roma, set in 1970s Mexico, directed by Alfonso Cuarón and already tipped to win an Oscar; Mowgli, a live-action adventure based around the Jungle Book novels; or Bird Box, an apocalyptic thriller starring Sandra Bullock.

Perhaps you haven’t yet seen any of them. In which case you should prob­ably hurry up and do so because you’ll need to have an opinion about one or preferably all by the time you return to your desk. Netflix is one subject that transcends geopolitical boundaries, national interests and generation gaps.

In the five years since it started streaming original content, we’ve become a bunch of binge-watching insatiables, desperate for entertainment and the hit of the “what’s next?”. Other channels exist, of course — Amazon Prime, HBO and the venerable BBC among them, all delivering their own acclaimed series. Bob Iger, Disney’s chief executive, plans to launch a Disney streaming service next year. An AT&T streamer is also planned. But no other brand has come close to claiming Netflix’s reach.

“More shows, more watching; more watching, more subs; more subs, more revenue; more revenue, more content,” Ted Sarandos, Netflix’s chief content officer, told New York Magazine this year, when asked to outline his model for growth. The phrase “Netflix and chill” first entered the lexicon in 2013. These days we’re just Netflixed.

And yet, for all the whoop-de-do, Netflix’s overwhelming dominance has made some wary. Over 2018, at least half a dozen fashion designers told me how they were inspired by the prestige drama The Crown in their own collections. Others have cited the saffron-robed cultists of the Wild Wild Country documentary as their muse. Could such a cultural hegemony be dulling our creative output?

Others, meanwhile, wonder whether the network can sustain its quality offering when it is now making so many programmes. And to what extent are these lauded shows merely window-dressing for a platform on which original content makes up only a fraction of its views? (According to TV analyst Ampere, original programmes constitute only 8 per cent of Netflix content watched when measured in hours.) Are we really watching foreign-language document­aries, or are we actually schlubbing out over old repeats of Friends?


“Have you seen the movie WALL-E?,” asks Christopher Wylie, the Cambridge Analytica whistleblower who takes an especially dystopian view of the future, which he likens to the Pixar drama about the last robot on Earth. “It’s not necessarily 1984, it’s not necessarily Brave New World. It’s actually almost worse than that because it’s so lame,” he says. “We destroy the planet because it becomes completely uninhabitable, and we move it into outer space where the spaceship — which is powered by AI — pacifies and infantilises all humans that live on it. And they float around as fat slobs, watching whatever personalised entertainment system that’s there, and that becomes what it is to be human.”

Few others are so pessimistic, but many are worried that the network is building a monopoly with plans to leave us with nothing to watch but commercial sap. “I’ve heard a lot of people in the industry say that Netflix is the Coca-Cola of the audiovisual industry,” says one television and film producer who prefers to remain anonymous, as is often the case when you’re speaking about the most powerful entertainment company around.

“There’s an argument that they come blundering in saying, ‘Here’s a shiny new model and we’ve got loads of money’, very much like Coke when they go into a country. And they build a shiny new factory, or they will give one particular factory loads and loads of money and put all of the competitors out of work. And then the moment they’ve monopolised the market, they slash all of their wages. There’s a fear that they’ll put the competition out of business, and then charge whatever price they like.”

The danger is that you get a lot of dross to fill up what they imagine the appetite of the public is. And it’s like having too much sugar

“I think that’s a slightly exaggerated view of what they’re doing,” he continues. “But undoubtedly they’ve inflated prices for established talent, so suddenly big-name writers, actors and directors can be paid very large fees to do TV shows. And the tendency has been to draw those people away from terrestrial channels. So there is a bit of a talent drain going on from the UK to America. And everybody feels compelled to compete. What’s interesting over the past year, say, in the UK, is that costs have probably risen between 15 and 20 per cent: and some of that is the Netflix effect. But it’s not just the Netflix effect; it’s also the Amazon effect; and other global players.”

“That’s absolute rubbish,” says Peter Morgan, writer and showrunner of The Crown. Morgan, who first met the Netflix team when it was “operating out of a portacabin in Beverly Hills”, was persuaded to go with them when making The Crown because it married a British drama about what might be thought quite “stuffy” subject matter with a newly disruptive production house that he found “inspiring and releasing”.

The series debuted in November 2016 to coincide with the international push that saw Netflix operating in 190 countries. Immediately, it was a critical and popular smash, and season three of The Crown is now in production.

Cast and crew from ‘The Crown’ after its win at 2017’s Golden Globes, including (second from left) series producer Andy Harries, Claire Foy (centre) and writer Peter Morgan (third from right) © Cap/HFPA / Capital Pictures

“They have an uncomplicated mandate to entertain, and I think that that has led to charges of them being like a Walmart because they have so much of everything, and they don’t have a particular line or objective or goal in the way that FX does or HBO,” says Morgan. “But I just don’t understand this talk of talent drains. Talent will go wherever talent is given a home and it’s not about the money. I think we can all agree that whether it’s a little podcast or a blockbuster television show, spending money isn’t the secret to success.” (He insists that reports of The Crown’s £10m-an-episode budget are horribly exaggerated.)

Morgan is adamant that Netflix has been a force for cultural good. “I can understand if you are new into the job as a commissioner at, say, one of the terrestrial broadcasters, that it must be a bit harder to get premium-quality content,” he says. “But from the point of view of the filmmakers, I think it’s a lovely moment. There used to be a time where all you would hear about was the star system. And that’s no f***ing fun if you’re a writer or a filmmaker or a director and basically your entire existence is predicated upon some infant, narcissist deranged creature surrounded by sycophants saying yes or no to a piece that’s suitably flattering to them. I’m far happier being in this universe where writers and producers are starting to get more of an upper hand.”

Morgan believes that far from creating a monopoly, the competition has opened things up. “There’s never been more people in jobs, there’s never been more work being done. I think there’s a lot to be happy about. Netflix has stimulated a huge amount of competition. The BBC is making more drama. Channel 4 is making drama. Sky is making drama. I don’t know a writer that is out of work. You can’t get a soundstage. You can’t get a post-production house. It’s impossible to book actors, they’re all busy. Everybody seems to be in work.”

Other producers agree that Netflix has done much to stimulate the market, experimenting with new formats and genres that might once have been deemed too niche. It has broadened our taste in unexpected ways, whether it’s for Finnish crime dramas (Deadwind) or German sci-fi thrillers (Dark). Meanwhile, smaller independent films that may not have had much exposure on general release have been given a second, successful life.

“It’s one of the few elements about being British we can still hold our heads up about,” says Morgan. “You think about the brand of being British, which is so corrupted and devalued right now that you hold your head in shame. And then you realise Britain’s reputation is being held up by its cultural exports.”

Morgan was lucky. He walked into a room with the right idea at the right time. And he has been handsomely remunerated for it. What is more surprising, perhaps, is the extent to which he and his team were given free rein by Netflix to do what they wanted. One imagines a bunch of Silicon Valley techies devising scenes by script-bot. But the truth was quite the opposite.

“Honestly, they did leave us alone,” says the series’ producer Andy Harries. “And I think we have rewarded them with really, really great work. But I have to say,” he adds, “I think we’re a very responsible team. So we were trusted, and delivered for them.”

Harries, co-founder and chief executive of the UK production company Left Bank Pictures, recently signed another deal with Netflix to produce a new bilingual drama White Lines, which is set in Ibiza and is a co-production with the Spanish production company owned by Alex Pina, the showrunner behind the global hit La casa de papel (Money Heist).

“There’s no question that their desire to grow as fast as they have means that they are commissioning tons and tons of stuff,” he says of Netflix’s expansion. And commissioning isn’t cheap: as of September 30 2018, Netflix reported $8.34bn in long-term debt.

Whether it can keep up its current hit rate is more of a challenge. “In a sense they’ve created a different world for people in the way that they look at things, and in the way they watch things,” says another producer who prefers to speak off-record. “So it has revolutionised viewing, and it has created some very good drama and documentary and movies. The problem is that the machine has to be fed and so you can’t keep feeding it with good stuff because — as in everything — there’s only so many good things. And so the danger is that you get a lot of dross to fill up what they imagine the appetite of the public is. And it’s like having too much sugar.”

Ted Sarandos (left), Netflix’s chief content officer, with the channel’s head of original film Scott Stuber © PA Images

Most producers suggest that algorithms are playing at least a part in Netflix’s content. “Data is very, very important,” says Harries pragmatically. “They’re a tech company, and tech companies are very, very research- and data-obsessed.” There’s a sense also that commissioners, across all platforms, are becoming more careful. The grip is getting tighter. And no wonder. Netflix can ill-afford another disaster such as Baz Luhrmann’s Bronx-set musical drama The Get Down, which went wildly over budget, premiered this summer to a lukewarm critical response and was then promptly cancelled.

But Netflix itself is quick to push back on the idea that it is becoming more data-driven. “There’s no way an algorithm could have predicted that a show steeped in 1980s nostalgia and starring four unknown kids, like Stranger Things, would have been a huge success,” says Netflix spokesman Jonathan Bennett. “And actually, we have very little data on our subscribers. When you sign up, you give your name and email, payment details, so we don’t even know what country you live in, or your gender. All we know is your viewing tastes.”

It’s these viewing tastes that help inform the “taste clusters” that feed the different recommendations on the Netflix dashboard. Today, for example, my dashboard is encouraging me to make good on a 99 per cent match with the new Netflix film Dumplin’, about a Texas teenager who enters herself into a local pageant, one of whose judges is her former beauty queen mother, played by Jennifer Aniston; and, somewhat mortifyingly, suggesting that I will enjoy the 2006 romantic comedy The Holiday (a 98 per cent match). “We might suggest content you might not normally have watched,” says Bennett. Or, indeed, content I will never, ever watch, and which got clustered via a reading of my daughter’s viewing tastes.

There’s no way an algorithm could have predicted that a show like “Stranger Things” would have been a huge success

“Viewing figures are not the only measure,” adds Bennett. “We also look at social media to see how much buzz a show is getting. And whether a new show is pulling new subscribers in. And yes, we do take risks, and we make mistakes. But I think a measure of our success should be the number of industry accolades our original shows are getting. Success isn’t measured in a time slot.”

Maybe not, but new shows today have less time to make a good impression than they once had. “They know within a month how many people have watched it, and if people are not watching beyond an hour or two, they just cancel the shows, they’re gone,” says one producer. “It’s pretty savage.” Another producer bemoans the issue with promotion. After all, if you’ve only got one portal to go to, and there are more and more shows, how do you stand out?

In the meantime, the numbers keep growing. Many in the industry assume that they’ll one day sell to Amazon or another big competitor such as Apple. For the time being, however, it’s clear that they’re way out front. And there’s no point in trying to stop them.

“I am optimistic,” says Harries. “But I’m conscious that all things change; I’ve been too long in this business not to have seen many ups and downs and challenges. Getting into the originals game is a very, very expensive business. But it’s a ride. I mean, there is no question that the opening-up of the streamers has completely changed the business. It’s been transformative. It blows all the cobwebs off the old sort of terrestrial channels. But it’s ever-changing, and you certainly can’t take it for granted. It’s a crazy business but it’s enormous fun. You’ve got to just strap yourself in and go for it.”

In the meantime, the rest of us will no doubt stay glued to our sofas.

Stream on — the Netflix story

Founded in 1997 by chief executive Reed Hastings and tech entrepreneur Marc Randolph, Netflix first began streaming in 2007 — but it wasn’t until 2013, with the premiere of its first original drama House of Cards, that it emerged as a content creator in its own right.

Today it has around 130m paying subscribers, 73m of whom live outside the US (9m in the UK), and a subscription growth that some analysts predict will hit 300m by 2028. It accounts for 15 per cent of all internet bandwidth worldwide and the company recently surpassed Disney to become, at $153.8bn, the most valued media company in the world.

And the output is growing and growing and growing. Next year, Netflix is expected to spend up to $13bn on content, of which the majority will be spent on original programming. It’s also making a more strategic effort to build its global profile. In 2018, Netflix had 141 projects in Europe, 40 of which were based in the UK, and the channel is planning to launch 100 foreign-language originals within the next two years. Many will be developed at the massive new production site that the company is building in Madrid.

Jo Ellison is an FT associate editor

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