Mysterious billboards began to pop up in Los Angeles and the Hell's Kitchen neighborhood of New York recently, setting social media abuzz and confusing passersby, commuters, and random pedestrians. The target of the curious crusade was streaming pioneer Netflix, Inc. (NASDAQ:NFLX). The billboards displayed a stark white background featuring large, plain black letters that declared "Netflix is a Joke".
Some posited that it was the work of streaming competitors Amazon.com, Inc. or Hulu, while others couldn't make heads or tails of the occurrence. It was soon revealed that the perpetrator of the prank was none other than Netflix itself, designed to draw attention to recent high-profile deals for comedy programming. Several A-list comedians, including Jerry Seinfeld, Dave Chappelle, and Chris Rock, have announced specials that will appear on the streaming platform. The campaign will be expanding in the near future, featuring short videos of the comedians promoting their upcoming specials. Stars of other Netflix original programs are expected to make cameos.
The joke's on you
Earlier this year, Netflix announced a deal with Seinfeld that would bring his popular web series Comedians in Cars Getting Coffee to the streaming service, along with two stand-up specials. The first special, Jerry Before Seinfeld will debut later this month. Dave Chappelle agreed to release three all-new comedy specials for Netflix, while Chris Rock signed on for two. Earlier this year, it was revealed that Netflix would release a stand-up comedy each week for the rest of the year.
Netflix has been investing in a stable of bankable comedians lately, with Amy Schumer, Sarah Silverman, Ellen DeGeneres, and Tracy Morgan joining the star-studded lineup. This isn't anything new. The company has long been known for stacking its queue with comedy, and has enlisted the talents of well-known comedians Kevin Hart, Louis C.K., Jeff Dunham, Jim Gaffigan, and Gabriel Iglesias.
Netflix also turned heads in 2014 when it signed comedian Adam Sandler to a four-movie deal, leaving many to scratch their heads. The company revealed earlier this year that it was extending that deal, upping the ante to eight Sandler-helmed movies. The Ridiculous 6, the first of the films produced under the agreement, proved to be wildly popular on the streaming service. Netflix revealed that since the debut of the movie, subscribers had watched "more than half a billion hours" of Sandler films.
Laughter is the best medicine
Netflix has a number of incentives to aggressively pursue stand-up comedy deals. The first may be simple economics. While a series can easily run north of $100 million, Netflix has been scooping up top-tier comedians for $10 million to $20 million per special. Stand-up from lesser-known names can be had for as little as $3 million a show. This helps balance out the more pricey programs.
Netflix also likely wants to be known as the premier platform for stand-up comedy. Time Warner's (NYSE:TWX) HBO once dominated the genre, and landing a stand-up special on the network could be a career maker for a young comedian. In an oft quoted interview with GQ, Netflix's chief content officer Ted Sarandos famously quipped "The goal is to become HBO faster than HBO can become us." Dominating a comedy landscape once ruled by its more mature rival is not only smart, but may be a point of pride as well.
Getting the last laugh
Netflix has been spending lavishly on content, which is expected to top $6 billion in 2017. While comedy will only account for a portion of that spending, Netflix has signaled its aspirations in the space by courting some of the top comedians. With over 100 million subscribers worldwide, the streaming giant wants something for everyone, and its recent ambitious foray into comedy may do just that.