Sections

ideals
Business Essentials for Professionals



Netflix Rope Sin ‘Game Of Thrones’ Creators In A $200 Million Deal


08/11/2019


Netflix Rope Sin ‘Game Of Thrones’ Creators In A $200 Million Deal
Netflix has managed to rope in “Game of Thrones” show runners David Benioff and D.B. Weiss from HBO for a deal worth $200 million.
 
This is one of the many deals that Netflix has made in the last year to bring into its fold top talent for making exclusive TV shows and films for its streaming platform so its strategy for greater ammunition for rivaling the likes of Hulu and Amazon Prime in addition to preparing for competition from the up-and-coming video streaming services of Disney+ and one from Comcast that is yet to be named.
 
However, there are doubts among analysts about whether these high end deals would deliver the intended outcome that Netflix is hoping for.
 
Over the last decade, billions have been spent by Netflix to deals to rope in names such as Guillermo del Toro (“Shape of Water”), Ryan Murphy (“Glee”) and Shonda Rhimes (“Grey’s Anatomy”).
 
$12 billion was spent last year by the company for purchasing, licensing and production of exclusive content for its platform. It plans to spend about $15 billion for that purpose and another $2.9 billion for marketing of the shows. According to analysts surveyed by Refinitiv, in 2019, it is expected that Netflix would report revenues of $20.2 billion.
 
Benioff and Weiss have been criticized about their writing on the show in later seasons even though they were the shepherds of the Emmy Award-winning “Game of Thrones”. During the later stages, the pair did not have as source material the writings of author George R. R. Martin’s work.
 
“Either [Benioff and Weiss] are the next Steven Spielberg or they are the next Michael Cimino,” Wedbush analyst Michael Pachter said.
 
While on one hand, Spielberg has remained successful in the industry and survive comfortably, , Cimino’s effort at writing and directing the film “Heaven’s Gate” was a very big flop at the box office, so much so, that the flop resulted  in Transamerica closing down its film production unit and selling off its studio to MGM. That happened just two years after the Academy Award-winning “Deer Hunter” was made by Cimino.
 
“I’d say somewhere in between,” Pachter said. “They might be good enough to justify the price, but they might not be. Remember, they still have to produce something, and if it’s not great, it isn’t worth it.”
 
That has been a problem for Netflix. The company had reportedly paid about $300 million for a five-year contract for Murphy who had said that 10 greenlit projects were being planned and undertaken by him for Netflix which comprised of three documentaries, four TV shows and three movies. However, no release dates for any of the 10 have been announced so far.
 
Added to that is the monetization of the shows which is a big challenge for Netflix. Selling of monthly subscriptions is the method for Netflix to make the majority money. The company also earns a small amount through the sale of merchandising content that it owns. No money is generated in revenues by Netflix from individual views of content or from advertising.
 
But the trouble for Netflix is that it has been cash flow negative since mid-2014. That means that the company is expending more money for its business than it is managing to bring in as revenues. In fact, over the last few years, the efforts of the company to differentiate itself from other streaming services, the company has been spending almost double of what is has been earning.
 
(Source:www.cnbc.com)