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Netflix tightens its purse strings

The netflix logo laid out in a pattern.
Photo: Lionel Bonaventure/AFP/Getty Images

Netflix chief content officer Ted Sarandos told several senior executives last month that spending on film and TV projects, particularly big budget movies, needed to be more cost-effective, The Information reports.

Why it matters: Netflix's heavy spending has set the bar for all of the other streamers looking to challenge it. But Sarandos reportedly said that big-budget projects need to bring in lots of viewers, not just drive buzz.

The big picture: In the past, Netflix used "a ratio of their cost to a measure of viewership that gives more weight to new subscribers and those viewed at risk of canceling," The Information's Jessica Toonkel, Tom Dotan and Beejoli Shah write.

Be smart: Matthew Ball, former head of strategy at Amazon Studios, argues that this is not a sign of trouble for Netflix, but rather a sign of maturation.

  • He says Netflix for a long time needed to focus on creating enough scale to add as many users as possible. Now that it's achieved that, Ball argues it can be pickier.

What's next: There's been a lot of talk about whether companies that make content and own streaming services would eventually pull their titles in favor of their own platforms.

  • NBC said last week that 'The Office' would leave Netflix in 2020 to stream exclusively on NBCUniversal's forthcoming streaming service.
  • Yes, but: Over the weekend, news broke that DC Entertainment, which is owned by AT&T's Warner Bros., would license its new series for its hit comic Sandman to Netflix for a pretty price, proving that theory wrong.