Convergence-inspired compromise usually wins. JL
Shalini Ramachandran and Joe Flint report in the Wall Street Journal:
As Netflix plunges deeper into Hollywood production —it is set to release 700 new original shows this year, it is learning to temper its love of data models and cater to the wishes of A-listers and image-conscious talent, even when they may be at odds with the “algorithm.”“The algorithm became this Wizard of Oz. It was all-knowing, all-seeing, ‘Don’t f—with us. (But) people in L.A. don’t believe numbers as much as people in Silicon Valley.” The tech side is “never going to get the reasons for wanting to do anything that is beyond pure metrics.”
Netflix executives were torn. On the one hand they trusted the company’s algorithm. On the other they were worried about ticking off Jane Fonda.
After the streaming-video giant released the second season of the comedy “Grace and Frankie” in 2016, its product team put up an image to promote the show to U.S. subscribers that only included Ms. Fonda’s co-star, Lily Tomlin. Tests showed that more users clicked on the show when the photo didn’t include Ms. Fonda.
The decision set off a high-pitched internal debate. The Los Angeles-based content team was concerned that Netflix risked alienating Ms. Fonda, and that the move could even violate her contract, while the tech group in the Los Gatos, Calif., headquarters argued the company shouldn’t ignore the data, according to people familiar with the discussions.
In the end, Netflix chose to put images that included Ms. Fonda back in the mix.
Analytics is deeply embedded in Netflix’s DNA. The company mines reams of data on its subscribers’ tastes to help determine which shows to bet on and how to promote them. But as Netflix plunges deeper into Hollywood production —it is set to release 700 new original shows and movies this year, including new seasons of older shows—it is learning to temper its love of data models and cater to the wishes of A-listers and image-conscious talent, even when they may be at odds with the “algorithm.”
At times, the efforts to appease stars don’t sit well with the company’s technology and product teams, triggering heated discussions between the Hollywood and Silicon Valley arms of the company, the people say.Some shows at risk of being canceled due to poor performance have gotten a reprieve because Netflix doesn’t want to damage relationships with key producers or actors, people familiar with Netflix’s deliberations say. Stars have inserted language in their contracts giving them approval over everything from the short video that plays when users hover over a photo to the trailers promoting Netflix shows and movies.
There’s a “natural tension” between the two sides, said Bob Heldt, an executive in Netflix’s engineering team who left last year. “People in L.A. don’t believe numbers as much as people in Silicon Valley.”
The tech side is “never going to get the reasons for wanting to do anything that is beyond pure metrics,” a former Netflix content executive said.
Josh Evans, a former Netflix technology executive, said that while the tech team is more “data-driven and analytical” and the Hollywood side more “relationship-oriented” the two sides manage to reach common ground.
In a statement, Netflix spokesman Richard Siklos said “open debate across teams is an important part of trying to do our best for our members at Netflix.”
“It’s all very encouraging to hear that there is a debate,” said Tom Nunan, a veteran television and movie executive. “It reassures the Hollywood community that there is a beating heart in the chest of this great power. There is a limit as to what an algorithm can do in terms of predicting the future.”
‘Moment of Truth’
Netflix has been burning through cash—analysts expect it to spend more than $12 billion this year on movies and shows—and some in its tech operation have raised the question “Are we killing enough shows?” according to one former tech executive who left last year.
Some engineers fear that the sheer volume of programming is overwhelming customers. Their goal is to have customers click on a show in the first 10 seconds on Netflix—called “the moment of truth” inside the company. “If they decide not to watch something, that’s a moment we lost,” one engineer said.
Last year, executives from the tech and content teams hotly debated whether to renew “GLOW,” a show about professional women wrestlers in the 1980s whose co-executive producer is Jenji Kohan, creator of “Orange Is The New Black,” a flagship Netflix show. The tech side argued the show should be canceled because of lackluster viewership, people familiar with the situation said. The Hollywood side felt it was worth continuing the show, given the importance of Ms. Kohan to Netflix and the critical acclaim GLOW had received.
There were serious conversations from the tech side pressuring the Hollywood side not to renew it for a second season,” said one participant in a heated discussion over the show. GLOW ultimately survived.
Ms. Kohan didn’t respond to requests for comment made through her representative. A person close to her said she expressed dissatisfaction with Netflix’s initial marketing plan, which executives said was based on internal data to attract viewers. She felt it catered to males when the show was really geared to women, the person said.
Another tussle involved “Lady Dynamite,” a comedy starring Maria Bamford from “Arrested Development” creator Mitch Hurwitz. It had relatively low viewership for its first season in 2016, but was a favorite with critics as well as Netflix Chief Content Officer Ted Sarandos. After intense internal debate, with some tech-side executives wanting it canceled, the show was given a second season. The content and marketing teams challenged the product side to find ways to boost its performance, according to people familiar with the discussions. Despite those efforts, it wasn’t renewed for a third season.
Some of the issues Netflix faces are old hat to traditional TV networks, who have long given leeway to powerful producers. Ryan Murphy, a prolific producer for Fox and FX, was able to keep the horror drama “Scream Queens” on Fox for two seasons despite anemic ratings. Mr. Murphy recently signed a big deal to create for Netflix.
It’s not uncommon in Hollywood for top talent to object when they think their show isn’t being marketed properly. With Netflix, those differences sometimes aren’t with a human studio executive, but a digital algorithm.
“The algorithm became this Wizard of Oz. It was this all-knowing, all-seeing, ‘Don’t f—with us’ algorithm,” said one Hollywood executive who as an agent has represented key talent in negotiations with Netflix.
The shift in Netflix’s center of gravity toward Hollywood has become clear in some top personnel decisions. Chief Executive Reed Hastings asked his longtime chief product officer, Neil Hunt, to step down last year, installing in his place Greg Peters, an executive who had a little more background in the content business. Messrs. Peters and Sarandos are now both viewed internally as potential successors to Mr. Hastings, people familiar with the matter said.
The surprise resignation of Chief Financial Officer David Wells, announced in August, was partly because Mr. Hastings believed the CFO should be in Hollywood for Netflix’s next phase and Mr. Wells wasn’t interested in moving, people familiar with the matter said.
Netflix’s content and marketing teams have grown vastly, in part by poaching people from the traditional studio and TV network world. High-ranking executives from those teams began to outnumber those from the tech and product teams in the past few years, former executives said. Current executives say the top levels of both teams are about equal in size.
Some current and former employees say people who came to Netflix from traditional studios brought hierarchical approaches that were antithetical to Netflix’s culture, which encourages managers to brief people under them and then trust them to make big day-to-day decisions.
Trust the ‘Algorithm’
As Netflix wades deeper into creating original series, employees have debated whether the algorithm should give those programs higher visibility compared with the reruns Netflix licenses.
Mr. Hunt, the former chief product officer who left Netflix last year, and his team wanted to avoid any bias toward original content, while the Hollywood-side executives argued that the company’s future depended on success with originals.
In the end, the company decided to recommend shows to users based on what they’ve watched, but new titles, most of which are originals, do get prominent placement on viewers' personalized main screens. The company’s algorithm also does select originals more often in queuing up videos for viewers after they finish a series or movie.
A constant tug of war between Netflix’s Hollywood and Silicon Valley arms has been the question of how to market a show. Some on the tech side felt it wasn’t worth spending heaps of money on marketing, including on billboards in Los Angeles, because the streaming service’s algorithm would surface the right content to the people who would want to watch it.
Hollywood executives, influenced in part by producers who felt their shows were getting lost in Netflix’s catalog, felt a marketing push was essential, people familiar with the discussions said.
“The product team would be saying, ‘If your show is good, don’t worry, the algorithm will find the right people for it,’” said one former executive who left the L.A. office last year. Over time, the product side learned that marketing certain shows made sense, the executive said. Now, Netflix ads on billboards in L.A. are ubiquitous.
Mr. Hunt and his product executives argued at one point that it was a waste of money for Netflix to pay for trailers to market original films, people familiar with the discussions said. They said the product team could edit movies themselves to create short clips that might attract more clicks.
Netflix has over time hired professionals from the trailer-making industry. Though when Adam Sandler made his first movie for Netflix in 2015, he was annoyed that the streaming service put up a trailer for “The Ridiculous 6” that he hadn’t approved and that didn’t have the guitar riffs he wanted in the background. After his production company complained, Netflix changed it to suit his tastes, people familiar with the matter said.
“We’ve had many happy collaborations—and trailers—with Adam Sandler all the way from that first film to his new comedy special,” said Mr. Siklos, Netflix’s spokesman.
Promotional images for shows have been a frequent topic of debate. “In some cases, the content team would tell us this particular actor really cares about only showing his face and not the whole cast on the image and it’s in the contract,” said Carlos Gomez-Uribe, a former vice president overseeing algorithms who left in 2016.
Feedback also went the other way, he said. When the product team discovered multiple images of a particular show helped people choose what to watch, the content team had to renegotiate many studio contracts. “You rarely completely agree,” Mr. Gomez-Uribe said, but ultimately the relationship was “incredibly productive.”
Tech staffers themselves concluded that data has limits as a guide. In the case of Ms. Fonda’s show, the product team discovered that a promotional image of a vibrator, part of a “Grace and Frankie” plotline, also did very well in testing to attract clicks, a person familiar with the matter said. But they decided that probably went a step too far.
Netflix executives say they proactively talk to big-name talent, including Seth Rogen, Shonda Rhimes and Hasan Minhaj, to walk them through how the algorithm works.
“Image testing is really novel to them,” a Netflix executive said. “We have to explain to them that we are going to drive 10-20-35% more viewing for our title when we can personalize what the image is going to be.”
Rashida Jones of “Parks and Recreation” fame was upset when Netflix wanted the sequel of “Hot Girls Wanted,” her documentary about sex workers, to have the title of the original as part of its name. She wanted the sequel to be called “Turned On.”
Mr. Sarandos, the chief content officer, told her that the sequel would perform better with the callback to the first documentary. Mr. Siklos characterized the conversation as “a creative discussion.” He said, “We have creative discussions like these with our partners all the time.”
Some former executives said they believed the original film performed well partly because some subscribers clicked on it thinking it was pornography. A person close to Netflix rejected that notion.
Ms. Jones consented to a compromise: The sequel is now called “Hot Girls Wanted: Turned On.”
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