Netflix, still reeling, bets big on The Gray Man


Netflix, still reeling, bets big on The Gray Man

Anthony and Joe Russo like to go big.

In 2018’s Avengers: Infinity War, the director brothers shocked fans when they wiped out half the world’s population and failed their Marvel superheroes. The next year, they upped the ante with the three-hour Avengers: Endgame, a film that grossed $2.79 billion at the global box office, the second-highest total of all time.

And now there’s The Gray Man, a Netflix film they wrote, directed and produced. The streaming service gave them nearly $200 million to trundle around the world portraying Ryan Gosling and Chris Evans as shadowy CIA operatives trying to kill each other.

“It almost killed us,” Joe Russo said of the shoot.

One action sequence took a month to produce. They involved big guns, a tram car hurtling through Prague’s Old Town, and Mr. Gosling fending off an army of assassins while handcuffed to a stone bench. It’s one of those showstoppers that gets the audience cheering. The moment cost approximately $40 million to produce.

“It’s a movie within a movie,” said Anthony Russo.

The Gray Man, which opens in select theaters this weekend and will be available on Netflix on Friday, is the streaming service’s most expensive film and perhaps its biggest gamble as it attempts to launch a spy franchise in the mold of James Bond or “Mission Impossible.” If it works, the Russians have plans to expand the Gray Man universe into more films and TV series, like Disney has done with its Marvel and Star Wars franchises.

But while streaming-charged and integral to Disney+’s ambitions, these franchises are first and foremost theatrical businesses. “The Gray Man” will be released in 450 cinemas. That’s a far cry from the 2,000 or so that a typical big-budget release would see on its opening weekend. And the film’s near-simultaneous availability on Netflix ensures that most viewers will be watching it on the service. Movies that Netflix releases in theaters typically leave theaters much faster than movies from traditional studios.

“If you’re trying to build a franchise, why would you start it on a streaming service?” asked Anthony Palomba, a professor at the University of Virginia’s Darden School of Business who studies media and entertainment trends, particularly how consumer habits are changing.

The film comes at a critical time for Netflix, which is set to announce its second-quarter earnings on Tuesday. Many in the industry are expecting the results to be even grimmer than the loss of two million subscribers the company forecast in April. The company’s first-quarter gains sent its stock price down sharply, and it has since laid off hundreds of employees, announced it will create a cheaper subscription tier with commercials, and said it plans to crack down on password-sharing among friends and family.

Despite the current difficult times, Netflix, with its deep pockets and uncomplicated approach to creative decisions, was the only studio able to cater to Russians’ ambitions and quest for autonomy.

“It would have been a dramatically different movie,” said Joe Russo, referring to the possibility of shooting The Gray Man at a different studio from Sony, where it was originally going to be produced. The brothers said that if they had gone elsewhere they would have cut a third of their budget and downgraded the film’s plot.

A person with knowledge of the Sony deal said the studio was willing to pay $70 million to produce the film. Instead, the Russians sold it to Netflix in an agreement that allowed Sony to recoup its development costs and receive a fee for the time it was produced. Sony declined to comment.

The film contains nine major action sequences, including a mid-air fight with emergency flares, fire extinguishers and Mr. Gosling’s fight with a parachuted enemy as they both fall from a bombed-out plane, Anthony Russo said.

“Ambition is expensive,” said Joe Russo. “And it’s risky.”

Even at this humiliating moment, Netflix can pay more up front if it’s not burdened with the costs that come with much bigger theatrical releases. And for Scott Stuber, Head of Global Film at Netflix, who greenlit the Bourne Identity franchise while at Universal Pictures, films like The Gray Man are what he’s wanted to do since he was before joined the company five years ago.

“We weren’t really in that genre yet,” Mr. Stuber said in an interview. “When you do that, you want to work with filmmakers who have created some of the biggest franchises and some of the biggest action films in our business over the past decade.”

The Russos are also producing the Netflix sequel Extraction, starring Chris Hemsworth, and just announced that Netflix would fund and release their next directorial venture, a $200 million sci-fi action film, The Electric State Millie Bobby Brown and Chris Pratt.

Mr. Stuber pointed to the Extraction sequel and a Gal Gadot spy movie, Heart of Stone, both slated for release next year, as proof the company is still making big strides despite its struggles. However, he acknowledged that recent business realities have forced the company to think harder about the projects it has selected.

“We’re not reducing our spending like crazy, but we’re reducing volume,” he said. “We’re trying to be more thoughtful.”

He added: “We were a company that was a volume business for a long time. And now we’re very specific about targeting.”

Niija Kuykendall was hired by Warner Bros. late last year to head up a new division that will focus on producing mid-budget films in the $40-50 million range that traditional studios have all but abandoned have because their box office potential is less certain. And Mr. Stuber pointed to two upcoming films — Pain Hustlers, a $50 million thriller starring Emily Blunt, and an untitled romantic comedy starring Nicole Kidman and Zac Efron — as examples of the company’s commitment to films of this magnitude.

In recent months, Netflix has also been criticized by some in the industry for how much — or how little — it spends to market individual films. Its marketing budget has stayed essentially the same for three years, despite a significant increase in competition from services like Disney+ and HBO Max. YouTubers often wonder if they’re getting the full Netflix marketing muscle or just a few billboards on Sunset Boulevard.

For The Gray Man, Netflix sent the Russians and their cast to Berlin, London and Mumbai in India. Other promotional efforts included national television advertisements during National Basketball Association and Indianapolis 500 games, as well as 3-D billboards in locations such as Las Vegas and Krakow, Poland.

“It’s very big,” Joe Russo said of the Netflix commercial for The Gray Man. “We’re doing a world tour to promote it. The actors go with us. It feels a lot like the work we’ve done promoting the Marvel movies.”

For the smaller theatrical release, Netflix will show The Gray Man in some of the few theaters it owns — like the Paris Theater in New York and the Bay Theater in Los Angeles — and at chains like Cinemark and Marcus Theaters. And although Joe Russo calls “The Gray Man” “a forget-popcorn movie,” Netflix won’t disclose its box office numbers.

The theatrical side of the movie business is a mystery to Netflix. Studios are often more willing to take risks than traditional studios because they don’t spend as much money getting movies into theaters and don’t have to worry about box office numbers. On the other hand, the lack of large-scale theatrical releases has long been a sticking point for filmmakers who want to show their creativity on as big a screen as possible and hope to spark audience excitement.

And the strength of the box office in recent months for films as diverse as Top Gun: Maverick, Minions: The Rise of Gru, and Everything Everywhere All at Once (which the Russians produced) has caused many to rethink the influence of Cinemas severely handicapped by the pandemic.

Mr. Stuber acknowledged that greater theatrical exposure is a goal, but one that requires a consistent lineup of films that can appeal to global audiences.

“That’s what we’re trying to achieve: Do we have enough of these films consistently across the board where we can be in this market?” he said.

Also, Netflix would have to calculate how long its movies run exclusively in theaters before they appear on its service. While the theatrical window for The Gray Man is very short, Russians are hoping the film will show that Netflix can be a home for the kind of big-budget crowd-pleasers the brothers are known for.

“Knowing that you ultimately have a distribution platform that can pull in 100 million viewers, as Extraction did, but also the potential for a big theatrical window with a promotional campaign to match,” said Joe Russo, “You have a very strong studio.”

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