Topline
Netflix said Wednesday it plans to invest $850 million into an East Coast production hub in Fort Monmouth, New Jersey, the Hollywood Reporter reported, even as it struggles to maintain its lead in the streaming wars with other platforms.
General views of the Netflix Hollywood campus on Vine on April 19, 2022 in Hollywood, California.
Key Facts
The company bid $55 million for the nearly 300-acre former military base, which the New York Times reported in October.
With the additional $850 million investment, Netflix plans to build 12 sound stages, production support and a backlot, according to the Hollywood Reporter, making it the streaming service’s second-largest production hub in the U.S., second to one in Albuquerque, New Mexico, according to Deadline.
Rajiv Dalal, Netflix’s director of content and studio affairs, told the Hollywood Reporter the New Jersey property was chosen to be the company’s East Coast production hub for reasons including the “great scenic backdrops, the proximity to major metropolitan areas and the fact that we were able to get a large swath of land close to 300 acres.”
Dalal said the production hub will be completed in 2027, and the company estimates it would support at least 1,4000 jobs and could generate between $7.4 billion and $8.9 billion in output over 20 years.
The Fort Monmouth Economic Revitalization Authority is expected to approve the plan at a meeting on Wednesday night, Deadline reported.
Key Background
Earlier this year, Netflix lost subscribers for the first time in a decade, sending its stock price down. This summer, it took several cost-cutting measures, including laying off 400 employees. In October, the company announced it had gained subscribers and estimated it would continue to do so in the fourth quarter of this year. But this fall, the Wall Street Journal reported the company was still eying cost cuts. Sources told the outlet steps including limiting corporate swag, reducing its real estate footprint, hiring more junior staffers. Still, the company said it would maintain its new movie and TV programming.
Tangent
Earlier this week, shares of Netflix fell slightly after the Journal reported the company’s newly launched ad-supported tier only represented 9% of subscribers who signed up last month. Digiday reported last week that Netflix was giving money back to some advertising clients, after it failed to meet viewership expectations. A Netflix spokesperson told Forbes the company is “pleased with the successful launch and the member engagement on the Basic with Ads plan, as well as the eagerness of advertisers to partner at the outset.”
Further Reading
Netflix Shares Dip As First Month Of Ad-Supported Subscription Reportedly Disappoints (Forbes)
Netflix Reportedly Isn’t Meeting Viewership Expectations For Some Advertisers (Forbes)
Source: https://www.forbes.com/sites/marisadellatto/2022/12/21/netflix-plans-850-million-new-jersey-production-facility-amid-streaming-wars/