Apple Acquires First Movie at Tribeca Film Festival (Apr 20, 2017)
Netflix is seriously ramping up its original content investment, something it’s been talking about for some time. And recent flops notwithstanding, it’s had some really good content over the past couple of years. Now it’s shifting its focus to commissioning and acquiring more and bigger budget movies, and plans to release around 30 in 2017 including some starring big names like Will Smith, Brad Pitt, and Tilda Swinton. That number is impressive – none of the major traditional studios or distributors had more than 24 movies in market in 2016 and Disney, for example, will have only eight movies on its slate in 2017. Now, Netflix’s productions are generally smaller budget affairs – it’s acquired movies at Sundance and other film festivals, where the average acquisition price has risen from $2 to $5 million over the past few years but it’s also commissioning some bigger budget films, though nothing in the multi-hundred million range just yet. But this is yet another way for Netflix to set itself apart from Amazon, HBO, and other big names in the subscription video business. As of right now, Netflix has 119 originals slated for future release listed on its website, and 28 of those are films, so its main focus is still on series (each of which will obviously provide far greater total viewing time than a single feature), but movies are going to be increasingly important going forward as part of that mix.
Historic Oscar victories for ESPN, Netflix and Amazon – CNN (Feb 27, 2017)
Amazon and Netflix both won their first Oscars this year, though Amazon seems to have got most of the attention because its awards were for features, whereas the sole award Netflix received was for a short documentary. Interestingly, though, as far as I can tell the two Amazon wins were for properties it had nothing to do with until it acquired the distribution rights, whereas Netflix backed its short The White Helmets as one of several production companies behind the film (and was also the main backer of The 13th, Ava DuVernay’s feature-length doc, which lost out in that category). That’s an important difference – Netflix can claim that it was behind a winner from the beginning, whereas Amazon only acquired its two movies when they were finished and showing at festivals to strong positive responses. Still, it’s great validation for both platforms and a further indication that they’re increasingly important powers in the movie and TV worlds.
This effort has been underway for some time, but mostly among smaller players at the periphery, not the big studios. But it now appears that major movie studios are becoming more open to the idea of at-home rentals within weeks of theatrical openings for at least some of their movies. The thinking is apparently that the studios have to give consumers what they want or they’ll find it illegally, though I’m not sure that $50 at-home rentals two and a half weeks after opening is exactly “what consumers want”. Unless you have a large group, that’s going to be significantly more than you’re paying for movie tickets, and you’ll still have to wait 17 days. Of course, theater owners make far higher margins on concessions than they do on showing movies, and that revenue goes away entirely under this scenario, so the studios are having to promise to compensate cinema chains for any lost revenue, which is partly why the cost is so high. Lots of evidence here that, though the industry understands the need for change, it’s still resistant to really giving people what they want, largely because the existing value chain is so entrenched, which is very similar to the dynamic in the closely related TV industry.
Amazon has become the first streaming service to have a movie it owns nominated for best picture at the Oscars. This follows years of Netflix and Amazon content receiving nominations for TV awards, and Netflix has previously earned nominations in other categories. The catch here is that Amazon released Manchester by the Sea in theaters, so it feels much more like a traditional release than most of Netflix’s movies (The Little Prince, a Netflix-owned movie that didn’t debut in theaters, was not nominated in the best animated feature category despite being well received). So although there’s some symbolism here, it’s mitigated a little by the fact that the movie still received a traditional theatrical distribution (and did well there). It is ever clearer, however, that Amazon and Netflix (and potentially others) will continue to grow as a force in movie acquisition – the Sundance Film Festival is underway at the moment and we’re likely to see several more big buys there as the streaming companies beef up their libraries with exclusive content.