Netflix, in announcing its fourth-quarter 2017 earnings with record subscriber additions, said it had taken a $39 million write-down related to content “we’ve decided not to move forward with.”
CFO David Wells, during a company-hosted earnings interview Monday, said the charge was “related to the societal reset around sexual harassment.” Wells said content write-downs are not uncommon for Netflix but that “we just hadn’t had one of this magnitude.”
However, Netflix brass did not call out specific projects, and the $39 million charge set off a guessing game: What was the “unreleased content”?
Given Wells’ comment, it seems likely at least one of the abandoned projects involved Kevin Spacey, who was accused of sexual assault last fall.
Netflix scrapped its planned biopic of Gore Vidal starring Spacey in the wake of the sexual-assault accusations against the actor. The ’80s-set film had been set to be directed by Michael Hoffman and produced by Andy Paterson (“Girl with a Pearl Earring”).
In addition, Netflix suspended Spacey from the sixth season of “House of Cards” — the first original series that produced real buzz for Netflix. Last month, the company announced that it had reached an agreement to resume production on “HOC” season six without Spacey, after it was suspended in October. The sixth and final installment of Netflix’s political thriller will star Robin Wright and will run eight episodes — whereas each of the previous seasons have comprised 13 episodes.
Also possibly contributing to the Q4 content write-down: Netflix pulled the plug on a second stand-up special from Louis CK, after the comedian admitted to sexual misconduct in November.
Furthermore, Netflix suspended production on season 3 of comedy “The Ranch” after Danny Masterson left the show following rape accusations against him; Netflix said production would resume in early 2018 without Masterson.
In its Q4 2017 letter to shareholders, Netflix said only this: “We took a $39m non-cash charge in Q4 for unreleased content we’ve decided not to move forward with. This charge was recognized in content expense in cost of revenues.”
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