Why Old Hollywood Dreads Netflix
Going into the 91st Academy Awards, Old Hollywood is casting an uneasy eye on the streaming companies that have disrupted the film industry. But the disruptors aren’t looking back.
Steven Spielberg Speaks
On February 18, during the Cinema Audio Society’s CAS Awards, Steven Spielberg said, “I hope all of us really continue to believe that the greatest contributions we can make as filmmakers is to give audiences the motion picture theatrical experience. I’m a firm believer that movie theaters need to be around forever. I love television . . . but there is nothing like going to a big, dark theater with people you’ve never met before and having the experience wash over you. ”
The comment was interpreted to be a swipe at streaming services such as Hulu and Netflix – and especially at Netflix, whose Roma is up for a Netflix first-ever Academy Award Best Picture nomination. Roma was distributed largely through at-home streaming but also appeared in movie theaters to meet the Academy of Motion Picture Arts and Sciences rules to qualify for Best Picture.
As Spielberg told ITV News in 2018, “Once you commit to a television format, you’re a TV movie. You certainly, if it’s a good show, deserve an Emmy, but not an Oscar. I don’t believe films that are just given token qualifications in a couple of theaters for less than a week should qualify for the Academy Award nomination.”
Barry Diller: “Hollywood Is Now Irrelevant”
In a Recode podcast aired February 18, Barry Diller, the former CEO of Paramount and Fox, said, “Hollywood is now irrelevant . . . Netflix has won this game. I mean, short of some existential event, it is Netflix’s. No one can get, I believe, to their level of subscribers, which gives them real dominance.”
In an edited version of the podcast, he mentioned Netflix 16 times, Amazon 14 times (referring to the Amazon Video streaming service), and Hollywood eight times.
There’s a crucial distinction to be made here: Diller didn’t say Hollywood content is irrelevant. After all, the old-guard studios are raking in billions each year. What he meant was the Hollywood distribution system is irrelevant. As he told Recode:
So it was these six movie companies essentially were able to extend their hegemony into everything else. It didn’t matter that they started it. When it got big enough, they got to buy it. For the first time, they ain’t buying anything. Meaning they’re not buying Netflix. They are not buying Amazon.
And consequently, their relevance in the world . . . In other words, it used to be if you could get your hands on a movie studio, you were sitting at a table with only five other people. And so that table dominated media worldwide. That’s over. So when you ask about Hollywood, what connotes “Hollywood,” which is that that era is over and finished.
In other words, Hollywood studios simply cannot extend their distribution model by gobbling up an Amazon Video, Hulu, or Netflix. They have to set up their own streaming services if they want to adapt, which is what Disney is trying to do buy launching the Disney+ streaming platform in 2019. But, in Diller’s opinion, Netflix is winning, going away.
Even more galling for Old Hollywood: Netflix was founded by someone with technology roots, Reed Hastings, not an entertainment mogul. Hastings showed how an entrepreneur with vision could muscle his way into entertainment — and not mediocre entertainment, but award-winning content, as in multiple Emmys and Golden Globes. In fact, Netflix has already won two Oscars, for Best Documentary Feature and Best Documentary Short Subject.
What’s Next?
What’s next for Old Hollywood? Well, Old Hollywood is far from dead. Disney, for one, represents a bona fide threat to the streaming services. This is the company that gave us Black Panther, Guardians of the Galaxy, The Avengers, and The Last Jedi. In fact, Disney has distributed the highest grossing movies of the year since 2012. And Disney+ is going to create original content building on the success of its lucrative Marvel and Star Wars titles. If anyone from Old Hollywood can crack into a crowded streaming market, it’s Disney.
Meanwhile, the big three of streaming — Amazon Studios, Hulu, and Netflix — are in a costly battle to win critical acclaim and a shrinking share of available U.S. viewers. Hulu remains focused mostly on developing TV-content such The Handmaid’s Tale and generating revenue via live events — and is up for two Oscars in 2019. Amazon Studios is bidding for a monster TV blockbuster to rule them all with the forthcoming Lord of the Rings series (which may cost as much as $1 billion) while investing in movies such as Cold War, which was nominated for three Oscars. Netflix is fighting with Amazon Studios to expand into India (and the fight is said to be more of a struggle) while experimenting with interactive content such as the choose-your-own plotline format of Black Mirror: Bandersnatch. And Netflix is up for 14 Oscars.
A Netflix Theater Chain?
The most intriguing (and ironic) possibility for the streaming giants is actually expanding into physical movie houses. In 2018, Netflix was rumored to be a potential buyer for Landmark Theaters but reportedly backed out due to the cost. Nevertheless, speculation remains that Netflix may crack into theaters in 2019. Rationale:
- Theaters give Netflix a way to distribute more movies eligible for the Oscars (Netflix aired Roma in theaters so that it would qualify for an Oscar, but its relationship with theater chains is uneasy.)
- Theaters also give Netflix another revenue stream for branded merchandise and concessions. Netflix already licenses Stranger Things merchandise through retailers. Theaters would give Netflix a channel to sell merch by itself.
But if Netflix backed down from buying a theater chain in 2018, I’m not sure why 2019 would be different given Netflix’s content development costs, which remain a concern to investors. Perhaps Netflix will expand on a more limited, regional basis to test the waters.
But the more likely scenario for Netflix? A move that no one will see coming.
