Breakout British hits can help Netflix navigate its wobble

I was at a dinner in May with maybe a dozen scripted and non-scripted indies, soon after Netflix had done the unthinkable – reported net subscriber losses. After many years of inexorable growth (albeit with commentator warnings about profitability and an inflated share price), it had shed 200,000 customers in the first three months of this year, and immediately predicted another 2 million would depart in the second quarter.

The actual loss reported in July was closer to 1 million, but even back in May, the conversation about the streamer had changed: had Netflix lost its way? Was the all-conquering SVoD giant a spent force?

No one at that dinner ventured that it was. Instead, they talked of intense rivalry in the streaming wars, after a period in which Netflix had had its own way but now faced competition from two of the world’s biggest businesses (Apple and Amazon) and US studio giants plunging headfirst into the SVoD sector. The producers also wondered whether its red-hot programming streak had cooled.

“There is simplicity to its UK strategy that gives Netflix an advantage: no out-of-London quotas, no target demographics, no remit obligations. Just the freedom to take some big swings”

There’s not much Netflix can do about the former – but a lot it can do about the latter. Which is perhaps why its UK commissioning team is so single-minded (they were perfectly aligned across our four interviews this month) about finding outstanding, authentic British stories that can deliver on a global platform.

There is simplicity to its UK strategy – make great shows – that gives it an advantage. No out-of-London quotas, no target demographics, no slots to fill, no fixed volume of hours to deliver, no greenlights from Los Angeles, no remit obligations. Just the freedom and the spending power to take some swings.

The business is taking that opportunity seriously. A few years ago, Netflix was a slightly furtive presence at the Edinburgh TV Festival, its execs ensconced at the Sheraton Hotel around the corner taking secret meetings with a select few producers.

Now it is heading to the festival to talk up its place as an established, additive part of the UK sector, and with its new Berners Street office a regular calling port for a far broader slice of the production community. The discussions in that building, and at Netflix’s local commissioning teams and US headquarters, hold the key to its success.

There’s talk about its crackdown on password sharing after an extended laissez-faire approach, and the planned launch of a lower-cost, ad-supported tier. But while those measures will be important in growing revenues, it is how Netflix spends its cash that really counts. What prevented it from losing even more subs earlier this year wasn’t a shift of corporate strategy, it was Stranger Things.

Every content company in the world is chasing the same thing – shows that people just have to watch – and Anne Mensah and her team say there are no budgetary or spending implications from the company’s fall in share price.

In other words, they have the right environment to push boundaries – not in terms of edginess necessarily, but in the shape of well-funded, expertly crafted programming.

In truth, Netflix is only now finding its feet in the UK, with shows pitched, ordered and produced here starting to appear more regularly on its platform. Over the next two years, there should be a clearer sense of how it is faring – if not with elusive viewing data, then with word-of-mouth, cut-through and cultural impact.

The Crown burned bright in the early stages of Netflix’s growth, now the challenge is for the local UK team to deliver its own Selling Sunset or Lupin, Squid Game or Money Heist, The Sandman or Is it Cake? to help Netflix regain some of its lost lustre. The stakes are high – but who doesn’t love a bit of jeopardy?

• Chris Curtis is the editor-in-chief of Broadcast