THB #10: Netflix, Chappelle & Constituencies
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THB #10: Netflix, Chappelle & Constituencies
The 2013 Ted Sarandos utterance, “The goal is to become HBO faster than HBO can become us,” is a classic. There should be merchandise in the new Netflix/Walmart outlets with this sentence knitted, printed, and on temporary tattoos for all to remember.
Of course, the sentiment became untrue pretty quickly. Netflix was spending $300 million a year on original programming at the time he said it. It jumped to $1.15 billion in 2014. Then $1.8b, $2.9b - global expansion - $8b in 2017, $10b, $12.4b, and $15.3b in 2020.
Netflix’s ambition went from being HBO to being a replacement for multiple segments of what was being delivered into homes by cable and satellite. HBO+ComedyCentral+TheCW+Discovery+Lifetime+CourtTV+TheONetwork, etc, etc, etc.
(Note: This is all a little simplified… so please focus on the conceptual more than picking at the absolute detail. Happy to hear your variations.)
With this much broader portfolio, dwarfing HBO’s 20something series-a-year output, Netflix set out to be a home for almost every group. This is not a claim of political intention. This is about creating a lot of content, a small amount of which was built to overlap many of the groups, and the most extreme of which was not expected to - and mostly, has not - overlapped.
The massive network, which is really what it is, has never shied away from controversial content. But at the same time, they have always been extremely careful about not setting fire to any one of their constituencies.
What is the crossover audience between Orange Is The New Black and The Ranch, the two longest running scripted series in Netflix history? I would guess fairly small compared to their total audiences. One is considered a feminist television landmark and the other is considered right-leaning if not right wing.
But neither show tweeked the “other side” enough to cause them to rant and rave. Both embrace the Netflix formula for not getting into trouble. They are political in their existence, but not political in their actual content. Grace & Frankie has a bit more aggression at times, but mostly, it too is a gentle sitcom about getting old and maintaining relevance and the gay husband subplot is from the land of Fred & Ricky vs Ethel & Lucy.
Even House of Cards played its politics pretty much down the middle. Evil was not represented by party, but by the action of individuals.
Overall, Netflix has produced a ton of content that is, like all content, political in its existence, but unlike some content, is quite apolitical for the viewer. They have navigated away from explosions, no matter how much violence, sex, drug use, and rage is on display in their programming.
But subscribers - Constituency 1 - represent just 1 level of the 4-dimensional chess in play.
Constituency 2 is politically-minded groups that are not a majority, but can make a great deal of noise.
Even as some audiences were wide open to Orange is the New Black, some were titillated by lesbians, trans, and prison sex (oh my!), and some felt empowered and seen. Netflix got enormous cred from the LGBTQ+ community for delivering a show that wasn’t afraid of the subject, cast openly gay and trans actors, and mostly avoided the stereotypes that have offended LGTBQ+ people for many years on TV.
That credibility… that relationship is important to Netflix. I don’t want to judge it. But putting aside all the whys, Netflix has engaged and embraced the LGTBQ+ community, not just for the sake of the show, but in-house and in hiring and in mindset within the organization. For real.
Constituency 2 is not, however, just LGBTQ+. Netflix has spread the love and build relationships to religions, age groups, nations, cis genders, and fans of many stripes. Netflix has made it a part of its business model to engage and embrace a wide swath of its subscriber base, which with over 200 million subs, is almost every group. They don’t just want to be a platform, they want their subscribers to feel understood.
The 3rd Constituency is the industry perspective. Netflix is taken seriously like any high roller who comes into a Vegas casino with a billion dollar credit limit. But they want to be taken seriously as a pillar of the community. Again, I am not going to question the sincerity. But they have spent many millions on appearances that mostly matter to the industry… not the public and not the advocates.
The big budgets spent on awards is about the company’s place in the industry, not (just) about ego. They know a 3+-hour Scorsese film about getting old or a black-and-white Spanish language film about Alfonso Cuaron’s youth are not going to be as popular as Sandler’s pals farting on each other, much less a blandly interracial period soap opera. But the high-end content tells the industry that the company is open to every level of artistry. And fighting to get those films and shows awards tells the industry that the talent will be supported the way they want (which is ALL about ego).
The 4th Constituency in the Wall Street dimension. This is, by some distance, the most important dimension to Netflix. Don’t mess with the money, honey. The truth is, Netflix could shoot someone dead on 5th Avenue and Wall Street wouldn’t turn their head, much less hit their stock price by 2%. But every company, none more than a high-flier like Netflix that is way, way, way out in front of its skis in terms of valuation, worries about some moment that turns them around the wrong corner. Wall Street makes no sense in many cases… so what works for you one day can flip for no good reason as well.
When any one constituency suffers a seismic moment, a solid company, like Netflix, can recover pretty easily and quickly. And the controversy around Chappelle remains mired mostly in the 2nd Constituency, the politicized groups.
But this morning, with the Netflix-created comedy star Hannah Gadsby coming out and attacking Ted Sarandos for trying to use her as proof of Netflix’s good works, there is a real chance that The 3rd Constituency, the industry, could end up in play.
Of course, when I brought this up on Twitter this morning, I got the “Hannah Gadsby doesn’t mean anything” response from some people. They are right that she is not a superstar of AOC-ian levels who is going to bring a parade backing her up.
But that is really not the point. Her speaking out boxes Sarandos & Co in on responses to Constituency 2 and Constituency 3, because how the company proceeds in dealing with one of “their own” is not just about the politics, but about how the company will deal with talent that isn’t as valued as Dave Chappelle or Adam Sandler or a giant little girl who targets people who move for death.
It’s not (just) a joke.
She hits 2 serious notes in her post that will get people who weren’t thinking this matters to them thinking. First, she brings up the pay scale again. I personally think that a content buyer can pay whatever the market will bear. But the issue of how much of a premium Netflix pays for some talent and what it means (or doesn’t) has come up before. Second, Gadsby points out that she feels that she personally has been attacked based on prior Chappelle outings on the network and will be every time he speaks out on LGBTQ+. One scion of the network endangering another. This could become sticky.
Next Tuesday, Netflix announces its 3rd quarter earnings, which comes with an “interview” in which Wall St analysts get to ask questions. At this point, I don’t expect more than one, if that, question about the Chappelle controversy. Netflix, of course, wants none.
I don’t actually see what angle, aside from gossiping, a question about the Chappelle controversy would fit a call about Netflix’s stock price. At least where things currently stand. Constituency 1 has not been significantly affected. In fact, all the talk has probably led to an increased number of views of the show. And we are at the end of Chappelle’s contract. If there is a new contract, maybe there is a legitimate business issue.
Sarandos’ responses about this controversy have been problematic because they haven’t just addressed the constituency that has a problem with Chappelle, but they have opened the door to trouble with the other constituencies, also having the additional bad effect of isolating and inflaming the constituency already riled up.
Telling an aggrieved group - whether you agree with them or not - that the rest of the kids don’t care what they think and that their fears of that group that doesn’t care isn’t legitimate is not a good choice. Ever. Not for Netflix, not in a fight with your significant other.
People who see Chappelle as a villain here are not moving off their position. And to be fair, no argument has been offered to suggest they should change their position. You disagree? Doesn’t matter. You agree. Doesn’t matter.
You can have a discussion with people about the details. There may be some middle ground. I listened to a friend argue both sides with absolute and passionate conviction today. Put a little salt on him and you could have sold him as a 6’ tall pretzel.
I have seen no Ted Sarandos response to the Hannah Gadsby slam today.
He learned.
It won’t solve the problem. It won’t make it go away. But it will keep him from this…
Until Monday…