Explained: How Netflix plans to find its inner 'Star Wars' to survive

Netflix broke Hollywood's rules to create a $82 billion global streaming colossus that the rest of the entertainment industry rushed to copy. But as growth slows, it is looking backwards for a way forward, borrowing a page from Walt Disney’s playbook.

The company that changed the way we watch television and movies aims to emulate the success of Mickey Mouse and “Star Wars,” by trying to build brands that traverse film, television, games and consumer products, executives told Reuters in recent interviews.

Netflix teams are plotting ways to milk more from Netflix’s bigger shows and movies with universes and characters they can return to again and again. The franchise strategy, details of which are reported here for the first time, is meant to complement Netflix’s efforts to build a vast library of original programming with something for every taste.

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

Netflix’s franchise initiative comes at a critical moment, following two rounds of layoffs amid subscriber losses. It is racing to build a lower-cost, advertising-supported version of the service, which it once vowed never to do. On Tuesday, the company is expected to report losing 2 million more subscribers when it announces quarterly earnings. Its shares have sunk 70 per  this year.

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

“It feels as if you have to fight your way into building a franchise there,” said one studio executive.

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

“At a traditional studio, there are these big walls between the feature team and animation team and series team,” he said.

“Because Netflix is a very young organization, those walls just never had time to be built.”

The film studio, started from scratch 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, action-thriller “Extraction” and zombie tale “Army of the Dead”.  Spy thriller “The Gray Man” debuts Friday. 

Netflix added consumer products staff and hired in-house 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.”