Netflix Film Chief Scott Stuber on Talent Deals: "We Pay in Success"

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Scott Stuber and Ron Howard

The executive pulled back the curtain a bit on how the streamer does business in a discussion with Ron Howard at the Producers Guild of America's annual Produced By: New York conference.

Netflix film chief Scott Stuber opened up about how the streaming service chooses which movies to make and compensates talent, and he weighed in on the ongoing conflict between Netflix and major theater chains over the streamer's shortened theatrical window in a discussion with Ron Howard that kicked off the Producers Guild of America's annual Produced By: New York conference Saturday.

In terms of ways to pay beyond the initial deal with talent, Stuber said, "You just want to be fair.… I believe in fair and righteous behavior."

"When we make deals, we're slightly different," he added. "We have a model. If we make a film, we pay in success."

In putting together a deal for a project, Stuber said they look at someone's typical backend agreement and "we try to articulate with what we together, with their attorneys, assume will be the great success ratio of that film. So if we make a movie for $60 million, and it made $200 million, we pay people under the auspices that that's what your deal would be. And what we never want to be is a place where people feel they got taken advantage of.”

As for Netflix's ongoing conflict with exhibitors over its shortened theatrical window, which the company this year extended, giving releases like The Irishman and Marriage Story, both of which recently hit theaters, roughly a month in cinemas before they hit the streaming service, Stuber said it's a "complex issue" that isn't exclusive to Netflix but something the entire film business is grappling with.

"As a business, the theatrical film business, it's become very tight. It's become about giant IP, animation, horror. There are certain kinds of genres that have been squeezed out because they're more challenging. If you make a drama and it's not quite what it is and you're up against a $200 million movie with a bigger marketing campaign, you can suffer very badly. So instead of the rhetoric of 'us vs. them' or all of these things, we all have to get together and talk about how we widen the funnel. That's the most important thing, to give different voices and storytellers a chance," he said.

Expressing his support for the theatrical window and how Netflix extended it this year, Stuber said, "We want to do it; we just have to figure out how to do it right."

Stuber also alluded to Netflix's upstart status in releasing original films, evolving from a subscription streaming and DVD company, in the company's approach to theatrical releases.

"The trick is when you're starting from scratch, which we really were, it really is almost impossible to start a theatrical film business from scratch and put 12 or 14 original films into the market against all of these titans," he said. "It really is not a business model that we can sustain. So we say, 'How can we build our business model and then evolve it and be smart about it?' If everyone would just be calm and talk through it, in the next few years as an industry, we'll be able to find the right answer for everyone."

Stuber also offered some insight into how the Netflix film division is set up, comparing it to a studio with different labels.

"We have an animation group that is…building up to hopefully four to six animated feature films a year," he began. "We've got what we call an indie team…with a bunch of different groupings in it. So their, spiritually, probably 75 percent, 80 percent of their slate is like New Line, genre-based things with an efficiency of economics, knowing an audience, horror, African American stories, comedy…and then about 25 percent…pedigreed art films with really high-end filmmakers. We're making a film with Charlie Kaufman. We had a great film last year, Private Life with Tamara Jenkins, so those kind of films. Within that there's even more subgroups. There's a family group, that's real PG family movies.… We do a lot of Christmas movies.… [There's also a] studio group, that would be like big Warner Bros., big Universal, Hillbilly Elegy [which Howard is making for Netflix], The Irishman, Michael Bay's 6 Underground, Noah Baumbach's Marriage Story. [And there's a documentary group.]"

"There's a lot of access points. One of the things I had to realize when I got there was there was a bunch of confusion in the marketplace because people didn't know how to access us," Stuber said. "So we've tried to spend a lot of time overcommunicating that so you can find the right person."

And each of these teams, Stuber said, has buying power, with Netflix taking the anti-development slate path of "buy to make."

"I don't want a line of 20 people out my door saying, 'Can we do this? Can we do that?'," he said. "I don't want the development system where you have five slots, 30 producers, you buy 250 projects for five slots, because then…there's not really a path. When you come in, I need a better path than normal. Pitches I don't really believe in, frankly, except for comedy. I've been doing this for a long time. The success rate from pitch to movie is pretty small. But in comedy, if you have a comedian attached — Will Ferrell tends to do the ideas that he loves, Melissa McCarthy tends to do the ideas she loves, Kevin Hart tends to do the ideas he loves — so that helps. If it's a generic comedy thing, if it's the greatest idea, maybe, but for the most part, probably no. A drama or a thriller, no on a pitch, because it's execution based. Go do the work. Because we want to buy it to make it. I don't want to buy it to develop it."