Already a trailblazer in television production, Netflix is now turning its attention to the film industry, disrupting long-established distribution and production-funding models.
The traditional distribution lifecycle of a film involves release across different media in staggered phases, known as ‘windows’. Typically, films are shown exclusively in cinemas during a theatrical window of approximately 120 days, after which they are made available through less profitable channels such as DVD and video-on–demand (VOD).
Netflix will pioneer a new trend by releasing Beasts of No Nation straight onto its VOD platform, expected to be on 16 October. Netflix further plans to release The Weinstein Company (TWC)-produced Crouching Tiger, Hidden Dragon II: The Green Legend in the first-quarter of 2016, simultaneously in IMAX theatres and online.
By merging the theatrical and streaming windows through a so-called ‘day-and-date’ release, Netflix and TWC are pioneering a new trend that could turn the traditional model on its head. The move has not been without resistance; it is reported that four of America’s largest cinema chains (AMC, Cinemark, Regal and Carmike) and the UK’s second largest cinema operator (Cineworld) are refusing to screen Crouching Tiger, Hidden Dragon II. John Fithian, head of the US National Association of Theatre Owners branded the move nonsensical and asked: “Why should the best product be released early on the lowest value chain?”
Netflix sees things differently. CEO Ted Sarandos believes the strategy is a progressive departure from a model that is “antiquated for the on-demand audiences we are looking to serve”. Having been among the first in the TV world to acknowledge the popularity of ‘all-you-can-eat’ content, the company has a proven track record for identifying and adapting to changes in viewing habits.
Building on its successes with original television content, the company continues to make waves with its expansion into the market of original film content. Recent acquisitions include the Oscar-tipped child soldier drama ‘Beasts of No Nation’, and Jamie Dornan-led ‘Jadotville’. It is reported that the films were acquired for 200% and 140% of their respective budgets. Rather than following the long-established acquisition model, whereby producers take a share of box office proceeds, Netflix has offered producers substantial upfront fees on the condition that they receive no further remuneration. Like Crouching Tiger, Hidden Dragon II and Beasts of No Nation, Jadotville is expected to premiere online.
It is unclear whether this new approach to acquisition and funding will attract or put off potential Netflix partners. Against an increasingly risky landscape for independent production, Netflix may be positioning itself as a patron of art house cinema. Beasts of No Nation producer Amy Kaufman acknowledged that “this movie will have the muscle of Netflix behind it”. According to Alan Moloney, a producer of Jadotville, a deal with Netflix avoided a complicated multi-party financing structure: “this way, we have one source of financing and a very supportive creative partner. What’s not to love?”
However, the streaming giant’s sights are not set exclusively on art-house and independent productions. At this year’s Cannes Film Festival, Netflix announced the acquisition of worldwide distribution rights for the Kevin James comedy The True Memoirs of an International Assassin, with plans for a 2016 online-only debut. The California-based company subsequently revealed that it acquired the rights to the upcoming military satire War Machine starring and produced by Brad Pitt, committing an estimated budget of $60 million. The announcement saw Netflix shares rise to an all-time high.
Netflix’s competitors are following closely behind the push towards feature film content. Amazon is bidding to bring original films to its 40 to 50 million Amazon Prime Video users, announcing in July 2015 that its first original film would be the Spike Lee-directed Chi-Raq. Unlike Netflix, Amazon will debut its movies in cinemas and then offer an exclusive, early streaming window four to eight weeks later, supposedly giving filmmakers the best of both worlds.
Whether viewed as a progressive or disruptive force, it is clear that Netflix continues to reshape the entertainment industry.
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