Streaming giant pays top price for publicists
At Netflix almost no-one has an office, and job titles don’t follow Hollywood conventions.
Netflix has turned heads in Hollywood by spending billions of dollars to lure filmmakers and viewers from rival television networks.
But it has also frustrated competitors in a less public way – by poaching talent and driving up pay. The United States streaming giant has lured scores of defectors by offering big remuneration increases. Recruits are securing as much as double their pay, including stock and other benefits.
With funds for programming and marketing of US$10 billion
(NZ$13.7 billion) this year – and a stock that’s vying again to lead the S&P 500 index – California-based Netflix is upending the way people get paid in Hollywood.
US television networks and studios are struggling to keep up with a rival who will spend US$300 million (NZ$413 million) on a top producer and pay lavishly further down the food chain.
‘‘With combinations of base, bonus, equity and long-term incentive, new-media companies are figuring out ways to beat traditional studios,’’ said Neal Lenarsky, founder of STI Management, which represents executives in the media industry.
Old Hollywood is trying to respond. Some studios have pulled back from selling shows to the online service.
The Walt Disney Company went so far as to yank its movies from the company and is launching streaming services of its own. 21st Century Fox sued in
2016, claiming the company induced executives to breach their contracts. Netflix countersued, and the case is inching along.
Double the market rate
None of that is stopping Netflix from attracting publicists with as much as US$400,000 (NZ$550,000) in salary and other compensation, or about double their prior pay cheques, sources said.
More senior professionals are seeing similar increases, said one executive who was approached by Netflix.
In making offers, Netflix estimates a candidate’s value based on experience and title, according to employees who asked not to be named. Then it pays the recruit at the top of what the corresponding range might be.
The company also allows candidates to take as much as 50 per cent of their compensation in options, they said. A recent change in California law bars employers from asking applicants about their prior salary.
Job titles at Netflix don’t necessarily correspond with Hollywood convention. For the most part, the company has just three executive roles – director, manager and vice-president – and some represent real promotions for people jumping over.
Netflix also lets some staffers see what co-workers earn via an internal database, sources said.
And while many studios reward employees with amenities like a large personal office and titles that confer prestige, almost no-one at Netflix has an office – not even co-founder and chief executive Reed Hastings.
Netflix employed more than 5400 people at year-end, fewer people than its competitors in media, and sales are projected to reach US$15.8b this year.
By way of comparison, CBS Corp, owner of the CBS and Showtime TV networks, has a payroll of more 12,000 and revenue projected at US$14.5b this year.
Legion of employees
Perhaps nowhere is Netflix more aggressive than in marketing and public relations. The company will spend about US$2b promoting its service and shows this year. The company lists almost 500 openings on its website, with about a third in Los Angeles and more than 50 in marketing and public relations.
Once wholly dependent on older movies and TV shows licensed from other companies, Netflix will release 700 original programmes this year, including 80 movies. A growing share is produced in-house by Netflix Studios, based in the company’s Hollywood offices.
Producing and promoting those shows requires an expanding legion of employees, from colourists to sound engineers to publicists. Netflix is looking to hire dozens of executives for production and post-production jobs, and still more for marketing. Experienced staffers are in short supply, forcing Netflix to raid rivals who also happen to be programming suppliers.
Last year, Netflix hired Bela Bajaria, formerly with Comcast Corp’s Universal Television, to oversee unscripted TV, as well as Scott Stuber, a producer based at Universal Pictures, to run feature films. Julie Fontaine, executive vice-president of movie publicity at Lions Gate Entertainment Corp, jumped to a similar post.
The company has recruited dozens of PR people from agencies and studios including Fox and Disney.
Some analysts have questioned Netflix’s outlays, arguing there’s no way the company can turn a profit while spending at its current pace. But Hastings has satisfied investors by delivering record subscriber growth.
‘‘There are fewer and fewer services a TV studio can provide an artist or producer that Netflix can’t,’’ said Anthony DiClemente, an analyst with Evercore ISI.
‘‘Wall Street investors right now don’t care how much they spend on content and infrastructure as long as subscribers are growing and beating estimates.’’
Hastings was asked about skyhigh talent spending at a recent event at the company’s Hollywood offices. ‘‘Do we worry about overpaying? Always,’’ he told reporters in March.
‘‘We’re trying to be good stewards of the customers’ money.’’ –Washington Post