Disney to Join Growing Hollywood Bandwagon Ceasing Operations in Georgia Should Anti-Abortion Ban Take Effect

The Walt Disney Co. could join Netflix and other Hollywood actors and production companies who say they would stop working in Georgia should a recently signed anti-abortion law take effect on Jan. 1, 2020.

Speaking to Reuters, Disney CEO Bob Iger was asked if Disney would continue to make movies (Black Panther) and TV shows in the state should statewide legislation outlawing a woman to abort her pregnancy after six weeks become law. Georgia currently bans abortions after 20 weeks.

Georgia Gov. Brian Kemp signed the legislation on May 8.

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“I think many people who work for us will not want to work [in Georgia] and we have to heed their wishes in that regard,” Iger said. “Right now we’re watching it very carefully. I don’t see how it’s practical for us to continue to shoot there.”

Disney’s possible departure from Georgia could be a major blow to the state’s lucrative film business, which employs thousands and generates billions in annual revenue by offering studios generous tax incentives.

In addition to Panther, Marvel Studios Avengers: Endgame, Captain America: Civil War and Guardians of the Galaxy 2, among others, filmed in the Peach state.

Disney’s possible pullout of Georgia is reminiscent of a similar ploy when Georgia lawmakers attempted to ban same-sex marriage within the state.

Disney came out against the proposed legislation, claiming it was an affront to personal civil liberty.

“Disney and Marvel are inclusive companies, and although we have had great experiences filming in Georgia, we will plan to take our business elsewhere should any legislation allowing discriminatory practices be signed into state law,” a spokesperson said at the time.

Then Georgia Gov. Nathan Deal quietly vetoed the legislation.

Netflix Seeks New $2 Billion Bond Debt as Executive Compensation Balloons

With Netflix continuing to exponentially outspend ($12 billion in 2018) its over-the-top video rivals on original content and other corporate needs, the SVOD pioneer April 23 disclosed it is seeking an additional $2 billion in long-term debt financing.

The new bonds — Netflix’s first in six months — would be carried out in a two-part deal with an undisclosed interest rate and maturity date.

Netflix ended first quarter (ended March 31) with more than $10.3 billion in long-term debt – up 58.5% from long-term debt of $6.5 billion in the previous-year period.

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The SVOD behemoth could theoretically ask co-founder and CEO Reed Hastings for the funds. The 58-year-old Hastings ended the fiscal period with more than 10 million outstanding Netflix shares, worth more than $3.7 billion.

Separately, Hastings saw his total 2018 compensation increase 48% to $36.1 million from $24.4 million in 2017, according to a regulatory filing.

Chief content officer Ted Sarandos saw his compensation increase 32% to $29.6 million from $22.4 million in 2017. The executive ended the period with more than 490,000 Netflix shares worth $184.2 million.

Chief product officer Greg Peters received $12.5 million in compensation – up from $8.6 million in 2017; excluding $89 million in stock holdings.

Former CFO David Wells earned $5.4 million from $4.5 million, excluding $73.5 million in stock.

Finally, chief marketing officer Kelly Bennett, who is leaving the company, earned more than $7.3 million in 2018. He will exit the company with nearly $20 million in Netflix stock.

Ted Sarandos: Most-Watched Netflix Shows are Originals

Much attention has been given to major media companies such as Disney, NBC Universal and WarnerMedia pulling back content licensing to Netflix for their own branded over-the-top video platforms — and what impact that would have on the SVOD juggernaut.

Not much, according to CCO Ted Sarandos, who says the streaming service has anticipated such changing market dynamics for the past seven years.

Speaking on the April 16 fiscal webcast, Sarandos said CEO Reed Hastings and others long ago concluded Netflix’s future required streaming original scripted series, unscripted series, feature films, documentaries, standup comedy and children’s programming.

“And that’s what we set out to do,” he said.

Reed Hastings and Ted Sarandos

Longtime Netflix bear Michael Pachter, media analyst with Wedbush Securities in Los Angeles, contends about 80% Netflix’s content license deals with WarnerMedia (“Friends”) and NBC Universal (“The Office”) expire in 2020.

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Disney’s exclusive feature film agreement ends this year. Netflix’s recently cancelled Marvel Defenders Universe series, which included “Daredevil,” “Jessica Jones,” “The Punisher,” “Luke Cage” and “Iron Fist.”

“Netflix can thrive in the face of new [OTT video] competition only if it has the content to compete,” Pachter wrote in an April 17 note, aptly named, “Netflix: 57 channels (and Nothin’ On).”

Hastings characterizes any comeback strategy aimed at filling in exiting studio content with similar programming as “very minimalist.”

“You look at [global nature series] “Our Planet,” that’s not filling in for anything else, that’s setting a bold new vision of what programming can be,” he said.

Sarandos said Netflix original interactive series “You vs. Wild” has been streamed by about 25 million households in its first 28 days of release. Pending releases include Klaus, Netflix’s first animated feature film from veteran animator Sergio Pablos, and “Green Eggs and Ham,” an Ellen DeGeneres-produced 13-episode animated series.

“It’s pushing storytelling forward, which I think we’re trying,” he said.

The longtime content executive contends most TV programming is largely interchangeable. Netflix’s focus, according to Sarandos, is original programming (such as India’s “Sacred Games,” and “Love Per Square Foot,”) targeting local audiences that can appeal globally as well.

“If you look at our Top 10 most-watched shows on Netflix, they’re all Netflix original brands,” he said, adding that only four TV series among the service’s Top 25 have at least one season available elsewhere.

“It’s hard to imagine a couple of years ago when Fox said, ‘sunset all of their second-window content on Netflix off of the service to focus on their own efforts,’ and we’ve seen how we’ve been doing since 2017, so we’re pretty happy about it,” Sarandos said.

So is Wall Street, which lifted Netflix shares nearly 3% in April 17 pre-market trading.

On Eve of Financials, Netflix Naysayers Out in Force

NEWS ANALYSIS — With Netflix reporting first-quarter fiscal results after the market close today, some pundits suggest the subscription streaming video behemoth has suddenly become vulnerable to a host of challenges — both real and imagined.

Disney is set to launch a branded SVOD service in November with content previously earmarked for Netflix, and WarnerMedia and NBC Universal are pulling back licensed programming (“The Office,” “Friends” and “Grey’s Anatomy”) as well for proprietary services.

As a result, scuttlebutt suggests Netflix is scrambling to fill the void.

“Just throwing tens of billions at developing more original TV series and movies may not be enough on its own to keep the company growing domestically at the rate needed to reach its goal of 90 million US subscribers,” Helen Back with research firm “Kill the Cable Bill” wrote in a post.

Separately, online pundit “The Entertainment Oracle” contends Netflix has a “Game of Thrones” problem that has nothing to do with the fact the ratings hit resides on rival streaming service HBO Now.

The argument being that the high profile fantasy series — currently airing/streaming its last season — continues to fuel old-school water cooler buzz through weekly episodic programming rather than subscribing to Netflix’s “batch” distribution model.

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‘They are losing that weekly buzz that has helped ‘Thrones’ rise to new [viewership] levels,” wrote The Oracle.

The pundit suggests that adhering to weekly programming has helped Amazon Prime Video and Hulu secure industry awards, while apparently ignoring Netflix’s binge/Emmy/Golden Globes success with “House of Cards,” “Orange Is the New Black,” “The Square,” “Unbreakable Kimmy Schmidt,” “Grace and Frankie” and “Bloodline,” among others.

“Netflix does have its big hits and its instant-conversation starters, but by remaining so steadfast in its “all-at-once model”, it’s hurting the long-term possibilities for shareholders and that’s expanding out into the marketplace,” wrote The Oracle.

What’s ignored is that HBO Now (with more than 5 million subs) remains tethered to Amazon Channels to drive sub growth while Netflix has grown domestic subs organically to the tune of 5.4 million net additions annually over the past five years.

Netflix is projected to top 90 million domestic subs by 2024.

From ‘Kill the Cable’ research

More importantly, driving that sub growth is original programming, according to Netflix management.

“I’d say the vast majority of the content that’s watched on Netflix are our original content brands,” CCO Ted Sarandos said on the Q4 fiscal webcast.

Sarandos added that ranking episodic programs by individual seasons on Netflix is “dominated primarily by our original content brands.”

In addition, unscripted programing now accounts for more than 50% of viewer hours in the genre on Netflix, according to CEO Reed Hastings.

Impressively, Netflix says domestic subscribers stream about 100 million hours of content each day, or 10% of the 1 billion hours of daily TV consumption nationwide.

Hastings said Netflix has withstood competitive threats in the past and would do as well going forward. The executive also said he would subscribe to Disney+ when it launches.

“What we have to do is not get distracted,” Hastings said on the Q4 call. “We’ve got a path ahead, everyone else in streaming is trying to find one.”

Netflix Original Content Outpacing Licensed Fare

As expected, Netflix is spending more on original content than licensing third-party programming. While Netflix senior management has long championed original vs. licensed fare as evidenced by its indifference toward Disney’s decision to withdraw first-run movies from the streaming service – now there’s data to prove it.

London-based Ampere Analysis found that 51% of domestic programming was original (proprietary and exclusive from studio partners) through the end of 2018 – up from 25% at the end of 2016. The research firm contends 30% of Netflix original content is studio based.

“Netflix’s strategy is clearly moving towards a self-sufficiency model,” analyst Lottie Towler said in a statement. “Its focus on growing the proportion of original content in its catalog shows no sign of slowing down – in fact Ampere’s analysis shows the streaming giant is reaching a point where it produces almost all the new and fresh content, while only the older content is licensed.”

In December 2017, more than 3,000 titles available on Netflix U.K. were available in more than 15 Netflix markets worldwide. In December 2018 the tally had increased by 1,600 titles.

“I’d say the vast majority of the content that is watched on Netflix [is] our original content brands,” CCO Ted Sarandos said on the fourth-quarter fiscal webcast.

Ampere contends Netflix’s focus on proprietary programming will help the streamer when episodic content producers such as Disney/ABC Television, Warner Bros. Television and NBC Universal pull back popular shows such as “Grey’s Anatomy,” “Friends,” and “The Office,” among others.

“This will position Netflix well in the market should other major studios follow in the steps of Fox and Disney and pull their content from SVOD services in advance of launching their own [direct-to-consumer] offers,” Towler said.

 

Netflix’s Ted Sarandos Says Apple, Disney ‘Very Late’ to SVOD Ballgame

Having invented the subscription video-on-demand business (with Roku) more than 10 years ago – with service in more than 190 countries, Netflix doesn’t appear to be worried about pending streaming competition from Apple and Disney.

Speaking March 18 at a media event at Netflix’s Los Angeles headquarters on Sunset Boulevard, CCO Ted Sarandos said he would “reserve comment and judgment” on the March 25 Apple announcement and separate Disney+ streaming media platform rollout later this year “until we see it.”

Netflix’s Los Angeles headquarters on Sunset Boulevard

Indeed, Netflix has long welcomed streaming competitors, including the rollouts of HBO Now, Showtime OTT, Amazon Prime Video and Hulu — characterizing the services as validation of the OTT video market in a pay-TV ecosystem.

Yet, Disney and Apple are not niche brands. Disney in recent years has dominated the box office through its Marvel and Lucasfilm (i.e. “Star Wars”) subsidiaries.

Disney last year ended its landmark movie distribution deal (and more than $300 million in annual license fees) with Netflix in part to solidify movie content offerings for its subscription streaming service.

Apple, which literally created markets for consumer electronics through  iTunes, the iPhone, iPad and Apple Watch, among others, has been slow to enter SVOD in large part because the late Steve Jobs considered streaming video a hobby.

“We’ve been competing with 500 channels of cable and penetrated nearly every household in the world for a long time,” Sarandos said, as reported by Deadline. “So, it’s the same stable of competitors; just very late to the game.”

Cindy Holland, VP of originals, who has been around Netflix about as long as Sarandos, said Netflix’s strategy to think locally and act globally when it comes to mining and distributing original content such as “Casa De Papel” and “Delhi Crime” underscores the streamer’s evolving subscriber.

“We are trying to reflect our audiences around the world,” said the pragmatic Holland. “We have a long way to go. You can’t rest on your laurels too long.”

Netflix’s Bella Bajaria Expands Duties to Include Foreign Non-English Original TV Shows as Erik Barmack Departs

Rising Netflix executive Bella Bajaria has been tapped to spearhead international non-English language original TV shows, including scripted, non-scripted and comedy.

Bella Bajaria

Bajaria, who joined Netflix two years ago as VP of content, inherits some of the duties from Erik Barmack, VP, international originals for Latin America, EMEA and India, who is leaving to launch his own production company after eight years at Netflix.

Longtime executive Cindy Holland, VP Original Content, will now focus on all English-language original content.

 

“Bela Bajaria is an incredible creative talent — bringing global hits like You, Nailed It and Queer Eye to Netflix,” CCO Ted Sarandos said in a statement. “She is the perfect person to build on our international efforts, helping to bring the world’s stories to the world whatever the language”.

The management moves come as Netflix seeks greater exposure internationally, including generating the vast majority of new subscribers outside the United States.

Erik Barmack

Barmack helped drive global appeal for non-English, country-specific original series, including “Elite” in Spain, “Dark” in Germany, “Protector” in Turkey, India’s “Sacred Games,” and “Casa de las Flores” in Mexico.

“Erik has been transformational for Netflix,” Sarandos said. “Hits such as ‘Dark,’ ‘Sacred Games’ and ‘Elite’ helped put us on the map and we wish him great success with his next chapter.”

 

Netflix: ‘Bodyguard’ Topped 23 Million Households in First Four Weeks

Netflix original series “Bodyguard” was streamed by more than 23 million households in the four weeks following its Aug. 26, 2018 debut.

CCO Ted Sarandos disclosed the data Jan. 17 during the SVOD pioneer’s fourth-quarter fiscal webcast.

The British series, which won Richard Madden (“Game of Thrones”) a surprise Golden Globes award for Best Actor in a TV Drama, features Madden as an ex-Afghanistan war veteran suffering from PTSD now working as a police sergeant assigned to protect the U.K. Home Secretary (played by Keeley Hawes) – a noted war hawk.

Netflix co-produced the show with ITV, with the BBC broadcasting “Bodyguard” in the United Kingdom concurrent with Netflix’s global distribution.

Sarandos said the mini-series was one of 140 co-productions Netflix greenlighted in 2018. He said there are 180 co-productions planned this year.

“When I say co-production, I mean, we come in at the script stage, we come in at the first money stage, we’re involved creatively with the production of that show,” Sarandos said. “[‘Bodyguard’] is a good example of taking a show from anywhere in the world to the rest of the world.”

 

 

 

 

Netflix Unveils Executive Pay for 2019 — and Hastings’ Salary Isn’t the Highest

In the coming year, Chief content officer Ted Sarandos will get the top salary — $18 million — and CEO and chairman of the board Reed Hastings will garner the most stock options — 30.8 million, Netflix announced in an SEC filing on its executive compensation.

Hasting’s salary is a mere $700,000 (the same as in 2018), as the executive is taking most of his compensation in stock options. Sarandos will pick up 13.5 million stock options. In the end, Hastings and Sarandos should make about the same in salary and options.

Still, Sarandos’ salary jumped considerably. His salary for 2018 was $12 million with 14.25 million options.

Chief product officer Greg Peters will have a salary of $10 million (up from $6 million in 2018), with 6.8 million options.

Among the other executives, CFO David Wells and general counsel and secretary David Hyman will each earn $3.5 million in salary (roughly a $1 million raise for both from 2018). Wells garners 2.8 million options, with Hyman getting 3.85 million.

Netflix’s Karen Barragan Joining Blumhouse Productions

Karen Barragan, VP of publicity for original series programming at Netflix, is leaving the SVOD pioneer to become head of marketing and communications at Blumhouse Productions.

Barragan, who has been at Netflix for the past six years promoting original series such as “Orange Is the New Black,” “Ozark,” “House of Cards” and “Stranger Things,” joins a company synonymous for lower-budget horror movies (Get Out, Insidious) as well as HBO’s critically-acclaimed “Sharp Objects,” starring Amy Adams.

“Karen has been a pioneering and well-respected leader at one of the the most innovative and successful media companies in history,” Jason Blum, founder/CEO of Blumhouse, said in a statement. “We are thrilled she is joining the Blumhouse team to help bolster our global brand generate even greater anticipation and awareness for the incredible films and TV series we are producing.”

Barragan replaces Teri Everett, who reportedly was looking for a career change, despite only joining Blumhouse in 2017.

“Blumhouse is bold and fearless,” Barragan said in a statement. “I’m intrigued by the ambitious vision set out by Jason and his team and looking forward to working across film and television in this role. I take immense pride in all that the global publicity team accomplished during my tenure at Netflix and am forever indebted to Ted [Sarandos] and Cindy [Holland] for their support. It’s been an incredible ride and I reveled in every second of it.”