Netflix, Which Made ‘Kimmy Schmidt’ in Brooklyn, to Expand Production Studios There
Netflix, the video-streaming company, said on Thursday that it would spend up to $100 million to expand its presence in New York City by creating a production hub in Brooklyn that would include six soundstages.
The company already has been producing some of its most popular shows, including “Orange Is the New Black” and “Unbreakable Kimmy Schmidt,” in Queens and Brooklyn.
The proposed expansion would build on New York’s growing role in the booming business of film and television production. Soundstages have opened up in previously industrial sections of Brooklyn and Queens, and even on Staten Island, fueled in part by the state’s program of production credits, which offers savings on production costs incurred in New York.
“New York has created a film-friendly environment that’s home to some of the best creative and executive talent in the world, and we’re excited to provide a place for them at Netflix with our production hub,” said Jason Hariton, the company’s director of worldwide studio operations and real estate.
Gov. Andrew M. Cuomo, in a statement, said Netflix, which has 32 employees in Manhattan, planned to add “127 high-paying executive content, marketing and production development jobs” to that count over the next five years in an expanded executive production office in the Flatiron district of Manhattan. If Netflix creates those jobs and retains them through 2029, it could receive $4 million in Excelsior Jobs Program tax credits through the Empire State Development agency.
The tax incentives offered to Netflix are under the same program that was used to lure Amazon to build a campus in Long Island City, Queens. Amazon, which would have saved roughly $3 billion compared to the $4 million in credits Netflix is eligible to receive, pulled out of the plan earlier this year.
Netflix’s proposed soundstages, which it would lease after they are built in a former warehouse in the Bushwick section of Brooklyn, could hold “thousands of production crew jobs,” Mr. Cuomo said. The site is a 165,500-square-foot warehouse that was once a printing plant, which will be converted into soundstages and operated by Gold Coast Studios.
Netflix, which got its start by delivering movies on DVDs by mail, has become a major player in video production. Based in Los Gatos, Calif., it is known for spending billions to fund new productions and to license original content. But it is still a newcomer to studio operations.
Unlike HBO, Netflix has had to rely on other production companies to create its originals. That changed in October 2018 when the company acquired its first studio, a New Mexico facility that was used to make big-budget films like the blockbuster “The Avengers.”
Last year, the streaming giant spent more than $8 billion on content, and it plans to spend more than $10 billion this year. A few years ago, Netflix made no original movies. As of 2019, it will make at least 55 original films annually — about twice as many as the most prolific of the traditional studios — including some with budgets as high as $200 million.
Exclusive films and TV series have become critical to fending off new competitors. AT&T, the Walt Disney Company, Apple, Amazon and even Facebook are spending more on digital video, the new battleground for audiences and advertising.
Netflix has historically relied on outside suppliers. For example, Lionsgate produces “Orange Is the New Black.” But now Netflix has shifted to making more of its own content, which requires stages. With all the streaming production, a shortage of soundstages exists in Los Angeles, and an under-tapped pool of creative people in New York are happy to fill the gap.
Economics are behind the shift — a lot of big studios are embedded within conglomerates that are ending relationships with Netflix as they funnel shows to their own streaming services. Netflix is also working to source more content from overseas studios.
“We’re proud Netflix chose New York to grow its business and we look forward to the jobs, economic activity and world-class productions this project will bring,” Mr. Cuomo said.