Netflix and Amazon aren’t just streaming platforms — they’re also entertainment powerhouses whose wide offering of original content and success with films like “Mudbound” and “Manchester by the Sea” have much of Hollywood shaken.
“Studio executives, I’ve never seen them in off-the-record conversations seem so scared and uncertain as they do right now, because they can’t possibly compete with Netflix in that way, and by most traditional measures, Netflix is winning,” said Ben Fritz, author of “The Big Picture: The Fight for the Future of Movies.” “Look at how many subscribers they’re getting, look at how fast they’re growing, look at how much money they can spend. Even the big studios like Warner and Disney know they can’t compete with that.”
Fritz, whose new book about the movie business debuted on March 6, said tech companies’ foray into original content is prompting “an interesting new heyday for film.” He broke down the shifting entertainment landscape for Brian Stelter for this week’s Reliable Sources podcast.
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It’s not uncommon these days for projects from streaming services to go head-to-head with those of major studios at awards shows. Amazon’s “The Big Sick,” for instance, was nominated for best original screenplay at this year’s Oscars. But while big studios are increasingly focused on being “brand managers” — maintaining franchises and appealing to global audiences to drive profits — Netflix and Amazon are finding success with a different end game, Fritz said.
“They don’t care if a film in and of itself makes a profit,” he said. “They care if it engages you and you love it and you stay a subscriber.” In other words, it’s about keeping users in their ecosystem.
Amazon and Netflix started out by acquiring movies at Sundance, Cannes, and the Toronto Film Festival. But now, Amazon has come to dominate the indie film business — the category of movies that “Searchlight and Miramax used to own” — and Netflix is giving filmmakers better offers than other studios, Fritz said.
“I hear stories from people in Hollywood all the time,” he said. “They go out pitching a film and, you know, they’ll take it to Universal and Warner and they’ll say, ‘Okay, we’ll buy it. We’ll pay you your asking price.’ And then Netflix says, ‘We want it. We’ll pay you double your asking price.’ Done. And it’s hard to say no to Netflix.”
Netflix can offer more money, Fritz said, because its business model is different. With Netflix, there aren’t any profits attributable to any individual film since users pay a flat rate per month for a subscription to access its content. Because there are no profits to share, Netflix can write bigger checks up front, as opposed to cutting back-end deals like traditional studios. The guaranteed money is increasingly attractive to filmmakers.
Streaming services like Netflix are increasingly attractive to consumers, too. As soon as a movie is out, “it’s there to stream. You can add it to your queue, and you can find it and you can push a button, and you’re watching it immediately,” Fritz said. To see big-budget studio films like “The Shape of Water” that are in limited release, audiences in certain regions may have to wait months.
“The studios know they are not in touch, they’re not caught up with the way people — especially younger people — consume their media today,” Fritz said. “And they all talk about how they want to catch up, but they’ve got these old business practices that they’re trying to get out of, that are hard.”