Over the last few days, Netflix has announced a couple of deals that will bring a series of films to its streaming video platform over the coming years. The partnerships represent a new form of “exclusive” content for Netflix, and what could be seen as a new outlet for film production studios. But they probably won’t change the industry as a whole, at least not in the short term.
The first of the two deals, which was announced with the Weinstein Company, will land the sequel to Crouching Tiger, Hidden Dragon on Netflix at the same time the film hits theaters. And the second will bring four films from Adam Sandler’s production company exclusively to its service.
For the studios, those deals will remove some of the risks associated with producing and marketing a film. In an age where theaters are seeing a gradual decrease in the number of attendees, hedging their bets through non-traditional licensing deals, video-on-demand sales, and international ticket sales is becoming increasingly important.
In the case of Crouching Tiger, the Weinsteins get a guaranteed paycheck no matter how well — or poorly — the film does in theaters. That’s important for a film with an uncertain audience. While the original was critically acclaimed and did incredibly well at the box office, both in the U.S. and abroad, that was nearly 15 years ago. There’s no guarantee a new generation of viewers even remembers that film, let alone will flock to a sequel lacking the original cast or director Ang Lee.
As for Adam Sandler’s Happy Madison Productions, the production house won’t have to worry about creating any more money-losing films. Sandler’s movies are some of the most popular on Netflix, but at the box office they can be hit-or-miss. For every hit like Grown Ups, there seems to be one or two films in its filmography that doesn’t make up its budget at the box office.
It’s probably worth noting that the big hits are becoming less frequent, while recent box office flops seem to be increasing. Whether that’s because today’s viewers find Sandler’s particular brand of comedy less funny than they did a decade ago, or simply that comedy films are less appealing in general is unclear.
The fact is, Sandler’s comedy continues to do well in DVD and video-on-demand suggests that more viewers are skipping the movie-theater experience and deciding to watch comedies at home. And that plays very well with Netflix’s core demographic.
Netflix is essentially de-risking the cost of making and marketing a film — paying the production studio upfront for the budget of whatever Sandler ends up making. For a studio that has bombed on the big screen but still has a rabid small-screen audience, that’s good news.
For Netflix, these films will end up as a kind of brand-building marketing collateral. Just as it did with House Of Cards, Orange Is The New Black, and Arrested Development, being the only place where viewers can watch a certain piece of content could lead to new subscribers. Or at the very least lead existing subscribers to stay on the service.
No doubt Netflix will keep tabs on its viewership and has some internal metrics that will decide whether a certain film was worth purchasing or not — and it will likely use those metrics to improve licensing decisions in the future. But really, the only metric that matters is subscribers, and whether or not Sandler and Crouching Tiger will result in that metric rising up and to the right.
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