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Inside Netflix’s Plans to Conquer Family Entertainment

Jorge R. Gutiérrez knew he couldn’t turn down the invitation.

In January, the “Book of Life” director was one of a select group of animators asked to attend a special presentation at Netflix’s Hollywood offices. Even though the event coincided with Gutiérrez’s 43rd birthday, the filmmaker felt he had to make the time.

“My wife kept asking if I was sure I wanted to go and miss having a family dinner, but the allure of Netflix — the freedom it promised — was too great,” he says.

Gutiérrez gathered with other creators on the Netflix roof, where over pizza and beer he listened as Melissa Cobb, the newly minted head of the company’s kids and family division, had a simple request: Bring us your best ideas.

Almost a year later, Netflix’s vast ambitions to become a player in the family entertainment space are beginning to take shape. The streaming giant has begun developing and producing more than a dozen shows, limited series and feature films, while giving A-list filmmakers such as Guillermo del Toro and Glen Keane the chance to make their dream projects. In the process, Netflix hopes to popularize the concept of “must-binge” entertainment among the pre-
adolescent set, much as it previously encouraged their parents to consume whole seasons of “The Crown” and “House of Cards” in a single sitting.

“We’re trying to take the Netflix philosophy of empowering creators and bring that into the animation space,” Cobb tells Variety in a recent interview. “We’re not focused on creating a singular brand identity. We want to produce a broad range of content that appeals to kids and families all over the world.”

Netflix isn’t being altruistic in supporting top-tier creators. There are competitive reasons that the company is spending hundreds of millions of dollars to create shows and movies. Disney, which previously licensed its films and series to Netflix, is poised to launch its own streaming service in 2019, and other entertainment companies are expected to follow suit. The Magic Kingdom represents a formidable challenger.

“Nobody has a better brand when it comes to kid content than Disney and Pixar,” says Michael Pachter, a media analyst with Wedbush. “But Netflix has to do something. All the Disney content is going away as soon as it comes up for renewal, and they still need to offer something to subscribers with kids.”

Cobb plays down any rivalry with Disney even as she acknowledges the company’s appeal.

“There’s a ton of different streaming services being created all over the world,” she says. “Disney’s an incredibly powerful and beloved family brand. … The specific impact of what they’re doing isn’t really driving our content decisions. I feel like they’ll have a fantastic streaming service, and I imagine that families that are able to do it will want to have Netflix and potentially another service as well.”

With more companies launching direct-to-consumer services, there will be less content for Netflix to license. To control its own destiny, the new media titan has been spending more of its money producing shows and films — content that it can own in perpetuity.

So far that mandate has translated into a range of projects that defy easy categorization and might have trouble getting approved at more conventional studios. They include such already announced movies as del Toro’s stop-motion version of “Pinocchio,” set against the backdrop of fascist Italy, and Keane’s “Over the Moon,” a fantasy about a girl who boards a rocket ship to find a lunar goddess. That’s not all. There are a number of splashy films and shows that Netflix is revealing for the first time, including “The Willoughbys,” an adaptation of a Lois Lowry novel that will be directed by Kris Pearn (“Cloudy With a Chance of Meatballs 2”) and features a cast that includes Martin Short and Ricky Gervais; “Kid Cosmic,” an animated series about a 9-year-old boy with superpowers from “The Powerpuff Girls” creator Craig McCracken; and “My Father’s Dragon,” an animated feature from Nora Twomey (“The Secret of Kells”) that centers on a young boy’s quest to find a fire-breathing friend.

And skipping his birthday dinner paid off for Gutiérrez.

He’s producing a nine-episode limited series titled “Maya and the Three” that draws on Mesoamerican mythology to tell the story of the warrior princess. It will debut in 2021. Gutiérrez has been one of several filmmakers holed up at Netflix’s headquarters in recent months, and he says the experience of working next door to so many major animators can be a heady one.

“I’ve worked in a lot of places,” he says. “Every time I went to a studio they’d talk about the legacy they’d established during a golden era some 30 or 50 years ago. The appeal of Netflix is there is no legacy. This is the golden era, and I get to be a part of building this foundation.”

Cobb, who was hired in 2017 after spending more than a decade at DreamWorks Animation, says that animated content is an important component of the viewing appetites of Netflix consumers. The company doesn’t release ratings for its shows, but it says that nearly 60% of its customers, or roughly 83 million households, watch kids and family content.

“This is a huge area for Netflix, but it wasn’t an area where Netflix had invested a lot of energy or money toward original content,” says Cobb. “My brief was to expand that slate.”

Netflix’s fortunes rise or fall with the number of subscribers it can attract to its service. Domestically, the company has 58.4 million users, and the conventional wisdom is that there are only so many more U.S. households it can sign up. Instead, growth will be fueled by international markets, such as India, where there are opportunities to reach new consumers. Animation is critical to these ambitions. These films and series can be dubbed into local languages and often tell fantastical stories that transcend geographic barriers.

“Animation is universal,” says Alan Wolk, co-founder and lead analyst at the TV consulting firm TV[R]EV. “There’s nothing culturally specific about it. It’s a genre that lets Netflix reach as many different audiences as possible.”

Netflix makes nearly all of its money from the $7.99 to $13.99 it charges subscribers monthly. If the company were ever looking to diversify that revenue stream, family entertainment could be critical. Cobb says that Netflix is dipping its toe into the consumer products realm, launching a line of toys and Halloween costumes tied to its show “Super Monsters,” for instance. Despite the tentative steps, it’s easy to see the upside. After all, as Disney, Illumination and other companies have learned, animated fare can inspire everything from T-shirts to theme park rides.

“We’re just at the very beginning of that process, but I’m sure we will continue to find new ways for kids to interact with the characters they love from Netflix shows,” says Cobb.

Most of the animators flocking to Netflix come from traditional media backgrounds. The streaming company’s approach requires some recalibration. There is, for example, no greenlight committee. Team leaders such as Cobb are empowered to make decisions about what shows and films they want to bankroll; thus the process of getting a deal in place is greatly accelerated.

Creators admit to being stunned by how fast they got an answer in the affirmative. It took McCracken five years to get “The Powerpuff Girls” on cable. At Netflix, he came in with a pitch for “Kid Cosmic,” and in less than a week he had a 10-episode commitment. The company’s more laid-back approach extends to the way it offers feedback, he says. On other shows, he received a slew of notes and frequently had to haggle over various plot points.

“I’m so used to having to fight for permission to be creative,” says McCracken. He notes that a show such as “Kid Cosmic,” which follows a grade-schooler who is struggling, and frequently failing, to harness his superhuman abilities, would have faced a lot of second-guessing at traditional networks. “They would have asked to have the kid be more aspirational and cooler,” says McCracken. “That may be more commercial, but that’s not the way kids are. They get confused by things, they get frustrated and they have emotional outbursts.”

The company’s commitment to transparency is well known. Netflix, for instance, once allowed all employees at a director level or higher to see their colleagues’ current salaries and pay history. Some of that approach is reflected in its production style. Elizabeth Ito, who has been tapped to make a show about urban ghosts, marvels at how open Netflix has been about all aspects of the process.

“From the beginning I’ve been allowed to help figure out stuff about the production schedule, and I’ve been kept in the loop about budgeting,” explains Ito. “At other places these things are more of a mystery.”

“This is a huge area for Netflix, but it wasn’t an area where Netflix had invested a lot of energy or money toward original content. My brief was to expand that slate.”
Melissa Cobb

The projects Cobb has backed have ranged from two stop-motion movies to CG animated fare. She’s experimenting with creating limited series that will tell a story from beginning to end over several installments. And she’s allowing filmmakers such as Ito, whose movie combines animation with documentary interludes, to incorporate other filmmaking styles into the movies they make. Some projects will be indie in nature; others are expected to have budgets that rival the $100 million that major studios typically spend on their family productions. In certain cases, Netflix will work with established animation companies such as Sergio Pablos Animation and Cartoon Saloon, and in others the work will be done largely in-house, with teams selected by the director or showrunner. There’s no single governing principle beyond a commitment to curating a diverse array of projects.

The animated films that Netflix releases will premiere on its service, an approach it has used with live-action offerings such as the Will Smith action film “Bright” and the Oscar-nominated historical drama “Mudbound.” However, those movies also received a simultaneous theatrical release. Cobb says a decision has yet to be made on whether the same will hold true for projects such as “Pinocchio” and “Over the Moon.”

Keane would love to see his movie in theaters but adds, “I don’t feel like I’m accepting second best. People watch Netflix in their living room, so in some ways you’re connecting with them in a much more personal space.”

When Netflix forged its way into original content with “House of Cards,” the company said it used data to make its calls about what shows to back. For example, it discovered that its customers enjoyed movies with series star Kevin Spacey, as well as the films of David Fincher, the show’s producer. Cobb isn’t relying on a similar algorithmic approach. She makes choices based on her response and her team’s reactions to the previous work of a creator and his or her pitch.
“Where the algorithm is really powerful is finding the audience for a show once it’s been created,” says Cobb. “Say we’re launching ‘Over the Moon’ from Glen Keane. [The algorithm] will look for people who love animated musicals or movies about China, because it is based on a Chinese myth. We try to make sure that the shows that end up in front of you are the ones you’ll love.”

Gutiérrez and McCracken say that the atmosphere in Netflix’s state-of-the-art headquarters, with its airy, glass-encased offices and free lunch, is unlike anything they’ve experienced at studios. Because they’re not fighting for release dates, as they would with a movie, or haggling over time slots, a recurring problem with cable and network television, the competitiveness that mars other work environments has been removed. Instead, colleagues pick each other’s brains and share updates on their projects.

“I feel like I did when I was a student at Cal Arts, only I’m making my student film with a really big budget,” says McCracken.

Yet, plenty of studios have been lured by the promise of animation and attracted by its potential to appeal to audiences on a global scale, only to be scared off by its cost and the headaches of making movies that delight kids and their parents. The sheer number of projects being backed by Netflix presents logistical challenges and makes it difficult for the company to ensure quality control. Some of Netflix’s family series have begun to air, but its films won’t debut until late 2019. That’s when the streamer will know if it’s become a true force in the animation space or if it has been plagued by the same pitfalls and setbacks suffered by other would-be family entertainment titans.

“It’s too soon to know if we’ve avoided their mistakes,” says Cobb. “Let’s take it one step at a time. We have to make the movies first.”

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