Netflix is cutting back, but not on L.A. productions

At Sunset Bronson Studios in Hollywood, teenager Reyn Doi was rehearsing lines for new sitcom That ’90s Show one recent afternoon. He sat at a table in a carefully designed set that consisted of a wallpapered kitchen, shelves full of teacups and Bundt pans hanging on the wall.

His friend’s grandparents, Kitty and Red, interrogate Doi’s character Ozzie to find out the whereabouts of their granddaughter. What would make him talk?

“Get me a Capri Sun and I’ll tell you everything,” he said dryly, referring to the sugary, fruity beverage that came in pouches and was hugely popular with kids growing up in the ’90s.

The new series, a spin-off of Fox sitcom That ’70s Show, is one of more than 70 Netflix productions to be filmed in the Los Angeles area this year — at roughly the same level of production as before Pandemic.

Netflix recently laid off 150 employees after reporting its first drop in subscribers in more than a decade. But the cuts haven’t slowed the pace of manufacturing activity in Los Angeles, where the Los Gatos-based company is doubling and expanding its footprint.

“We just think it’s really important that we lean into Los Angeles for the talent base,” Amy Reinhard, vice president of studio operations, said in an interview.

Netflix productions filmed in LA include season four of Never Have I Ever, a show about an Indian-American high school student growing up in Sherman Oaks; the limited love series From Scratch, starring Zoe Saldana; and courtroom drama Lincoln Lawyer, the second most popular series on Netflix last week, which features scenes filmed in downtown LA and in front of famous locations like Pink’s Hot Dogs. Several Netflix films have also been filmed on-site, including the sci-fi film Rebel Moon, directed by Zack Snyder, and the thriller The Gray Man.

To accommodate the growing pipeline of local productions, Netflix has significantly increased its studio footprint in Hollywood since 2016, securing long-term leases for more than 30 sound stages, Reinhard said. Manufacturing space was a big issue in LA, leading to some projects going elsewhere.

In December, Netflix extended the Raleigh Studios lease for the next 10 years. In total, the company has more than 800,000 square meters of production space.

“This presence is perfect for what we want to achieve and how many productions we have here,” said Reinhard.

Netflix has also expanded its live events in the region. Last month, the company hosted its first major comedy festival, Netflix Is a Joke, featuring 288 shows in more than 35 LA-area venues over 11 days. More than 260,000 tickets were sold.

The company said it produced 13 of the festival’s comedy specials, with 5,000 people working at the event, including around 200 employees.

“The festival was kind of a signal that we’re still in the middle of this pandemic, but we can come back and be dynamic again, which is all very exciting,” said Robbie Praw, Netflix’s vice president of stand-up and comedy formats and adds that the company is also expanding its comedy presence in areas like improv with shows like Murderville.

“We have a very busy schedule throughout the year,” he said.

Netflix is ​​expected to spend around $18 billion on content this year, up from $17 billion in 2021.

The company has production centers around the world, including Toronto, Madrid, Tokyo and London, as well as Albuquerque, NM and Brooklyn, NY, but LA remains the busiest US film location for the streaming giant. Like other states, California offers film tax credits to attract studios and their crews.

“Netflix’s investment in the production of original content in the greater Los Angeles area is a real economic benefit for the region,” said Philip Sokoloski, spokesman for FilmLA, the nonprofit organization that manages film licensing in the region. “The so-called ‘streaming wars’ have been most beneficial for large production hubs, where the depth of talent and resources required to welcome new projects is concentrated and there are strong incentive programs to attract interested producers.”

Gregg Mettler, showrunner and executive producer of That ’90s Show, says allowing people to spend time with loved ones “goes a long way toward creating an upbeat and positive set.” Its production supports 150 families.

“I find my home shower to be a much more creative environment than any hotel shower,” Mettler said in a statement. “Big benefit of staying local.”

Los Angeles is also home to Netflix’s largest employee base. The company’s local footprint is larger than that of streaming competitors like Amazon Studios or Apple TV+. Netflix employed around 11,300 people worldwide as of December, with just under half in LA

Netflix has nearly 1.6 million square feet of office space in Los Angeles and Burbank, compared to Amazon Studios’ roughly 915,100 square feet of office and studio space, according to estimates by CoStar Group, which tracks real estate data.

Apple, which also plans to expand its local presence, had an estimated 500,000 square feet of office space in the Culver City area as of October, according to Raise Commercial Real Estate.

“Just the sheer expansion over the last few years has been truly extraordinary and surpassed anything we’ve seen from the other streamers,” said Ryan Patap, senior director of market analytics at CoStar, of Netflix.

Patap said Netflix’s past growth has helped more developers market their properties to streamers during the pandemic, especially as there has been hesitation in traditional office space during the pandemic. Areas that have benefited from the growth of video streaming include Culver City and Playa Vista.

Some industry observers are wondering how long Netflix can keep up its pace while the company cuts costs and lays off employees. Netflix lost 200,000 subscribers in the first quarter and is expected to lose another 2 million this quarter.

At least three people who do business with Netflix and were not authorized to speak publicly say development has slowed.

“There wasn’t the same rapid pace of activity that they’ve always been known for,” said a person who does business with Netflix. “I think there’s a little break.”

Since April, the company has laid off dozens of contractors in marketing or social media-related jobs, as well as 70 part-time animation workers and 150 employees worldwide.

Netflix Chief Talent Officer Sergio Ezama cabled last week at a company city hall calling for more layoffs in the coming months, according to a Netflix employee who declined to be named because he wasn’t authorized to speak on the issue.

To counteract the loss of subscribers, Netflix is ​​testing ways to monetize password sharing, increasing its presence in mobile games, and exploring a lower-cost, ad-supported subscription plan. New content could potentially include live-streamed stand-up comedy specials.

Times Associate Editor Matt Brennan and staff writer Roger Vincent contributed to this report.

https://www.latimes.com/entertainment-arts/business/story/2022-06-03/lat-et-ct-netflix-production-los-angeles Netflix is cutting back, but not on L.A. productions

Sarah Ridley

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