How Netflix plans to find its inner “Star Wars”

LOS ANGELES, July 18 (Reuters) – Netflix (NFLX.O) has broken Hollywood rules to create an $82 billion global streaming colossus that the rest of the entertainment industry has been quick to copy. But as growth slows, she looks back to move forward, borrowing a page from Walt Disney’s (DIS.N) playbook.

The company that changed the way we watch TV and movies aims to emulate the success of Mickey Mouse and ‘Star Wars’, trying to create brands that span film, TV, games and consumer products , executives told Reuters in recent interviews.

Netflix teams are plotting ways to get more out of Netflix’s biggest shows and movies with universes and characters they can return to again and again. The franchise strategy, the details of which are reported here for the first time, is intended to complement Netflix’s efforts to build a massive library of original programming with something for everyone.

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“We want to have our version of ‘Star Wars’ or our version of ‘Harry Potter,’ and we’re working really hard to build that,” said Matthew Thunell, Netflix’s vice president credited with finding ‘Stranger Things’. . “But these are not built overnight.”

Netflix’s franchise initiative comes at a critical time, following two rounds of layoffs amid subscriber losses. He’s racing to create a lower-cost, ad-supported version of the service, something he once swore never to do. On Tuesday, the company is expected to report losing an additional 2 million subscribers when it announces its quarterly results. Its shares have fallen 70% this year.

Some of Netflix’s current partners, who requested anonymity to protect their ongoing business dealings, said they were frustrated with what they see as a lack of collaboration between the film and television groups. This has hampered efforts to capitalize on success through sequels, spin-offs or film adaptations of a hit series, they said.

“It’s like you have to work your way up to create a franchise there,” said a studio executive.

Thunell offered a different view. He and a company spokesperson described an environment of close collaboration among creative executives, who may independently approve projects but work toward the same goals.

“In a traditional studio, there are these big walls between the feature team, the animation team, and the series team,” he said. “Because Netflix is ​​a very young organization, those walls just never had time to be built.”


Netflix execs point to “Stranger Things” as a model. The sci-fi series, now in its fourth season, has inspired merchandise ranging from a Surfer Boy frozen pizza at Walmart to Magic 8 Ball toys from Hasbro, as well as live experiences. A “Stranger Things” spin-off series and a play are in the works. Read more

In the aftermath, Netflix executives said they were planning or in the process of giving at least a dozen shows and movies 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 period drama “Bridgerton” has been commissioned, as has a no-one-die-reality contest inspired by the South Korean drama “Squid Game.” The fantasy series “The Witcher” has spawned an animated film and is getting a prequel.

The company has also identified three upcoming shows as potential franchises, as the stories are well-known, bringing in an embedded audience.

“The Three-Body Problem,” an adaptation of the first book in a Chinese sci-fi trilogy, is in production with “Game of Thrones co-creators David Benioff and DB Weiss as executive producers. “One Piece,” based on A Japanese manga series is currently filming, and a live-action adaptation of the anime series “Avatar: The Last Airbender” has just wrapped filming.

Granted, not all stories work as a franchise.

The executives aim to produce franchises from Millarworld, the comic book publisher Netflix acquired in 2017. Millarworld’s first series, “Jupiter’s Legacy,” was canceled after the first season. There are currently six new projects in development and another in production, a spokesperson said, adding that Netflix intends to explore the villains of “Jupiter’s Legacy” in a new series.

“It has to start with the story itself. Does that support that kind of expansion?” Thunell said. “There are shows like ‘Stranger Things’ that are wildly successful, have the depth of mythology and additional stories that allow you to switch to animation, feature films or anime. “


The film studio, launched from the ground up 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, the action thriller “Extraction” and the zombie tale “Army of the Dead”.

Spy thriller “The Gray Man” debuts Friday. Directors Anthony and Joe Russo, whom cinema chief Scott Stuber hailed as “franchise builders” at the film’s Los Angeles premiere, said they created a rich world with the expansion in mind.

“We definitely designed and thought about this narrative specifically to continue it in other forms,” ​​co-director Anthony Russo said in an interview.

Netflix bolstered its franchise-building efforts through a restructuring in October 2020 under new global television chief Bela Bajaria, a former Universal Television executive who developed Netflix comedies such as “Unbreakable Kimmy Schmidt” and “Master of None”.

As subscriber growth slowed in the fall of 2020, Bajaria sought to extract more expensive deals from producers such as “Bridgerton” Shonda Rhimes. She also formed a team to develop prestige series and shows (often large, effects-driven fantasy series) that could become franchises.


Netflix added consumer products staff and hired internal 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”. He also created a video game unit.

The company began involving marketing and consumer products personnel early in the franchise building process. These teams, for example, recently traveled to London to meet Benioff and Weiss on the “Three-Body Problem” set.

“Army of the Dead” producers Zack and Deborah Snyder provided information about a virtual reality experience during filming, according to Josh Simon, head of Netflix’s consumer products and live experiences division. His team is currently working with the Snyders on ideas related to their next film, “Rebel Moon.”

“We’re really deeply immersed in the 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 or digital avatars.

Netflix would reap approximately $50-75 million in royalties from these sales, as well as free advertising on merchandise. To reach that level, Netflix needs to keep people engaged in the “Stranger Things” world, he said.

The streaming service has considerably less experience building franchises than its century-old Hollywood rivals, noted Julia Alexander, chief strategy officer at entertainment research firm Parrot Analytics.

“Do we have the same confidence in the Netflix machine as in the Disney machine? No, but part of that is because Disney spent years figuring out what this machine looks like,” Alexander said. “For all of Netflix’s dominance in the streaming space, they’re still relatively new to building these types of worlds.”

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Reporting by Dawn Chmielewski and Lisa Richwine in Los Angeles; Editing by Kenneth Li and Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.

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