Mic Drop #31: Jupiter's Legacy Marks Another Failure for Netflix's Big Bet on Owned IP

Also, a new PARQOR.com for the Five Frameworks

New PARQOR.com is Live

First, some news: a redesigned PARQOR.com went live on Wednesday.

The redesigned site has two objectives:

  1. to be a resource for PARQOR’s Five Frameworks

  2. to be a launchpad for additional services and offerings built upon PARQOR’s Five Frameworks

PARQOR’s brand has always drawn inspiration from “parkour”, the sport which “involves seeing one's environment in a new way, and envisioning the potential for navigating it by movement around, across, through, over and under its features”.1 The Five Frameworks have organically emerged through my writing over the past year to help readers see the streaming marketplace “in a new way”, if not five new ways.

I also like this quote from a paper about the “Parkour eyes” of practitioners of parkour, called “Traceurs”:

Traceurs speak of ‘parkour eyes’, a specific way of looking; gradually, places which have not previously been seen as attractive or appealing start to reveal interesting details and opportunities for inventive practice.

It is a good, implicit explanation of PARQOR’s tagline, “Connecting the dots to unlock your competitive edge". The Five Frameworks offer new ways seeing the moving pieces of the streaming marketplace to unlock and reveal important details and insights. These insights are written from an executive’s perspective often not found in journalists’ reporting or financial research analysts’ reports.

As a resource, the site has launched with the basics:

  1. Overviews of each Framework (with links to past mailings), and

  2. Updated slides showing the marketplace through the lens of each framework2

As a launchpad for additional services and offerings, my objectives for PARQOR.com are more ambitious.

A reader favorably compared PARQOR’s Five Frameworks to the BCG Growth Share Matrix, which is a portfolio management framework that helps companies decide how to prioritize their different businesses (NOTE: the reader is a BCG veteran, himself).

I believe the Five Frameworks have emerged as valuable, BCG Matrix-like frameworks to help executives and investors better identify the disconnects between corporate strategies in OTT streaming and their execution.

Is my ambition with PARQOR.com to build a BCG?

No. I think the dynamics of digital-first businesses demand different services, and back-end services for creators and entrepreneurs like Substack, Google Sheets, Memberful, Stripe, Zoom, or Ben Thompson’s recently-released Passport offer the building blocks of a very different relationship between consultant and executive, or consultant and corporation.

So, a start-up BCG-like business in 2021 begins with fundamentally different customer relationships and resources than one which emerged in 1960s, pre-Internet USA. It also faces fundamentally different marketplace dynamics of supply and demand, which results in disconnects between how executives and investors understand marketplaces, and how marketplaces actually work in 2021.

The Five Frameworks help to identify these connections and disconnects between supply and demand, and strategy and execution. That will be the foundation of PARQOR’s relationship with customers via PARQOR.com.

In sum, the Five Frameworks surface and highlight highly unique perspectives and insights. I believe the new PARQOR.com is an important and exciting step in the direction of making those perspectives and insights more relevant to each of you and your teams. Looking to the longer term, there are exciting opportunities to apply them to more media marketplaces like audio and gaming, and beyond media.

What PARQOR’s business can and will look like begins with you, the reader. So, before this week’s Mic Drop, I would like your response to this question:

What types of resources do you and your teams need from PARQOR for the Five Frameworks to plug these important details and insights into your day-to-day roles and responsibilities?

Please feel free to respond directly to this email or at andrew@parqor.com.

Thank you!

Mic Drop: A Tough Week for Netflix’s Bets on Original IP

I predicted for Netflix in 2021 that “an evolving and growing tension between owning IP versus licensing IP” would “complicate Netflix’s strategy”. This evolving tension increasingly exposes a weakness in Netflix’s strategy: an inability to produce owned and original IP, despite the objective of “becoming” Disney and despite the popularity of Stranger Things.

Observer’s Brandon Katz wrote about this objective of “becoming” Disney back in April:

In September, Netflix co-CEO Reed Hastings told the New York Times that two of the best authors in the entertainment industry were Neal Gabler, who wrote the definitive biography of Walt Disney, and Bob Iger, who literally ran Disney. In February, Hastings told investors that Netflix’s long-term aim is to beat Disney at animation: “We’re very fired up about catching them in family animation, maybe eventually passing them, we’ll see. A long way to go just to catch them.”

Netflix “becomes” Disney by refocusing its content efforts on key verticals that sharpens the efficiency of investment. There’s a reason why Netflix’s content budget devoted to projects in development is nearly triple that of Disney’s. There’s also a reason why their return-on-investment isn’t as impressive. So what does a less unwieldy Netflix even look like?

I was interviewed by Brandon for the piece:

“I’m obviously painting broad brushstrokes here, but the point is, as much as Netflix talks about Disney and animation as business objectives, it is harder to discern where the wins have been for them,” Rosen said.

This week we discerned an unusually big loss for Netflix’s Disney-esque ambitions with the cancellation of Jupiter’s Legacy, announced via an oddly-worded Deadline exclusive:

Netflix is turning Mark Millar’s Jupiter’s Legacy series into a universe spanning an [sic] anthology franchise. The streamer has set a live-action adaptation of Supercrooks, which delves into the story of Millarworld’s super-villains, as the next installment of the Jupiter’s Legacy saga.

Meanwhile, Jupiter’s Legacy will not continue as an ongoing series. With Netflix and Millar going in a different creative direction with the IP and the talent options soon expiring, the streamer has opted to let the high-profile cast — led by Josh Duhamel, Leslie Bibb and Ben Daniels — out of their commitments to the show.

It is a costly failure for Netflix, both as the biggest title to emerge from its $50MM to $100MM acquisition of comic-book publisher Millarworld, and because the production costs for Jupiter’s Legacy were big, according to The Hollywood Reporter’s Borys Kit.

Kit also succinctly sums up why Jupiter’s Legacy is such an extraordinary failure for Netflix:

I like to look at this outcome through the lens of a quote from Co-CEO Ted Sarandos in Co-CEO Reed Hastings’ No Rules Rules).

We should be ready to take bigger risks in high-growth-potential countries like India or Brazil so that we learn more about those markets. Let’s have some wins. But let’s also have some big messy losses where we learn how to succeed better the next time. We should always be asking, “If we purchase this show and it bombs, what will we learn from that?” If there is something big to learn, let’s go ahead and take the bet.

Jupiter’s Legacy is indeed a “big messy” loss, and one lesson they’ve gleaned is an interesting one. Millarworld founder Mark Millar announced they are going to focus on the villains of Millarworld, instead:

To do something exclusively focused on the villains they fight just feels incredibly fresh as we explore what it’s like to be a bad guy in a world crawling with good guys who want to put you in jail.

Supercrooks is a heist comic about eight supervillains written by Millar and drawn by Leinil Francis Yu. An anime version will be released later this year and Millar announced they are now planning a live-action version to replace Jupiter’s Legacy.

In other words, the lesson is that other parts of the Millarworld universe may work better with Netflix subscribers than Jupiter’s Legacy. Another lesson may be that making Millarworld characters more familiar with Netflix audiences, first, may be a better and cheaper first step.

But this is still a “black eye” for Netflix, as The Netflix Film Project writes in a must-read thread:

Netflix continues to navigate an evolving and growing tension owning IP versus licensing IP. I do wonder whether Netflix’s ecosystem is fertile territory for cultivating this IP. Meaning, the question is whether a software service that relies on long-tail consumption can produce Disney-like, fat-tail IP in the long term. Reed Hastings and Ted Sarandos continue to sell investors that they can, but the evidence is still not there.

As I told Brandon, above, it continues to be hard to discern where the wins in original IP for Netflix have been. Jupiter’s Legacy is a particularly painful public reminder that these wins continue to be few and far between with its current strategy.

2

These slides need to be updated after Q1, and will be updated on an ongoing basis.