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“That sounds like too high of a budget for [Netflix],” a well-respected film director told TheWrap on what they would consider to be a medium-budget movie.

“Nancy Meyers always has budget issues,” the top talent rep said.

With no residuals or back-end bonuses on the table to offset costs, $80 million of that budget would’ve gone to above-the-line expenses. That’s a conundrum in the streaming age and one reason why some big-budget Netflix actioners sometimes seem to look and feel less cinematic than much cheaper studio theatricals.

Netflix declined to comment.

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The shocking move comes as streamers are under ever-greater scrutiny to cut costs and rein in content-for-content’s-sake spending splurges. Wall Street no longer rewards growing subscriber counts, nor does it treat billions of dollars in content spending as an automatic sign of streaming strength. The investor class, at least since early 2022, is now demanding profits and revenue. The incentive that Netflix once had to spend $200 million on the Russos’ “The Gray Man” or $450 million for Rian Johnson’s “Knives Out” sequels as a show of force is no longer in play.

When Meyers’ “It’s Complicated” starring Meryl Streep and Alec Baldwin could earn $225 million at the worldwide box office, followed by the expected post-theatrical revenue streams, spending $110 million on an adult-skewing, R-rated, star-driven romantic comedy wasn’t the biggest risk in the world. A move from theatrical to streaming by many general and casual audiences for their casual entertainment consumption altered the formula for non-franchise films. Meanwhile, even streaming platforms like Netflix and HBO Max still came to depend on theatrical-first titles for much of their casual viewership.

Netflix would previously take “Red Notice” — a package that Universal put into turnaround — and shower all three of its big stars (Dwayne Johnson, Gal Gadot and Ryan Reynolds) with top-dollar salaries as a show of force. While “Red Notice,” “The Gray Man” and the Leonardo DiCaprio/Jennifer Lawrence disaster comedy “Don’t Look Up” pulled massive viewership in those key first 28 days, that didn’t stop Netflix’s stock from plunging from a high of $343 per share in mid-March of last year to below $170 by May of 2022.

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It recovered over the next year and closed Tuesday at $295, but the sharp tumble and eventual recovery had little to do with individual movies and television shows being offered in any given quarter. There’s still franchise-friendly value in spending $30 million per episode — lots of stars and no backend to cushion the blow — on the previous season of “Stranger Things.” But there’s much less payoff in spending $100-$200 million on a one-off feature film like David Ayer’s “Bright” or Michael Bay’s “6 Underground” that probably won’t spawn a franchise.

“If it’s over $100 million, they want it to be a big tentpole possible franchise,” the film director said. “I can’t imagine that [Meyers] was doing a big VFX or franchise film.”

Ironically, Netflix has had more franchise success with rom-coms like “The Kissing Booth,” but the “To All the Boys I Loved Before” trilogy cost a lot less than $130 million.

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It’s not enough if the online media bubble was obsessed with Sam Levinson’s “Malcolm & Marie,” for which Netflix shelled out $30 million since the John David Washington/Zendaya showbiz comedy barely registered among general Netflix subscribers.  

“There’s no one-to-one comparison,” a high-ranking studio executive told TheWrap, “in terms of streaming availability for a given [streaming-centric movie] and a boost in subscriptions.”

Moreover, as shown by last year’s most-watched streaming movies list provided by Nielsen, audiences generally flock to streaming services to either catch up on theatrical movies they missed, movies they want to see again, films that were supposed to be in theaters or films that, admittedly like many Netflix biggies, are meant to approximate the genuine article.  

Netflix is dealing with a problem facing all streaming platforms — namely that audiences on most streaming platforms seem fine with watching or rewatching previous theatrical films. Why spend $150 million, or even $130 million on “Paris Paramount,” with no presumption of a revenue-generating theatrical release, when audiences seem just as happy to watch James L. Brooks’ $110 million rom-com “How Do You Know?” or a cult favorite such as Meyers’ own “The Holiday” for the first or 20th time?

While rival streaming platforms like HBO Max and Disney+ have the option of their parent company shifting back to theatrical, and Sony can get big bucks via a first pay-TV window with Netflix, current Netflix co-CEO Ted Sarandos has repeatedly refused to milk even surefire hits like the “Knives Out” sequel for maximum box office revenue.

While an adult-skewing rom-com like “Paris Paramount” likely wouldn’t have made enough in global theatrical release to qualify as an outright theatrical hit, its streaming-only existence means a budget closer to “It’s Complicated” than the $35 million-budgeted “The Intern.” And sans additional revenue, “Paris Paramount” would’ve been just a $130 million content widget on a massive streaming site. And in 2023, that’s not enough to justify its existence.

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