Revisting the Blog: The Rise of Amazon and Netflix in the Movie Business is Great While It Lasts

(CS: I decided to change-up the reposting by revisiting a piece that I wrote several years ago on this site. This was written when Netflix and Amazon were just getting into the filmmaking game, and they both were promising their target would be the mid-budget and adult-geared pictures that the major studios were no longer interested in with their obsession on tentpoles and recognizable movie series. There also was the promise that they'd focus on genres that no longer were getting made for cinemas like romantic comedies and period dramas. At the time of this writing, I was wearing a pair rose-coloured glasses when it came to the future of movies being distributed by Netflix and Amazon. It'll be fun to see how well my thoughts hold up now.) 

Amazon is continuing its push into the movie industry by purchasing the rights to distribute the Kevin Spacey and Michael Shannon starring Elvis & Nixon. (I barely remember this being a movie, and it was so important, I've never bothered watching it.) Both Amazon and Netflix have turned into the equivalent of mid-sized film studios by making aggressive purchases of potential award challengers and financing movies that the big studios no longer back outside of Oscar time. If you ignore Netflix's four picture deal with Adam Sandler, the streaming services' upcoming slate of original movies will fall under mid-budget adult-focused fare that has largely been missing from the multiplexes now that every major studio is obsessed with their own version of The Avengers. (CS: Little did I know at the time that Netflix's strategy was more about stuffing their streaming service with entertainment that could be called movies rather than trying to make something of high-quality every time out. Netflix and Amazon Studios both tried their own big tentpoles, but have largely proven that it isn't as easy to succeed as Disney would have you believe.)

There are many reasons to get excited about the emergence of Amazon and Netflix as players in the movie industry, but the biggest is just the promise of some actual variety at the mainstream level. Likely most of their pictures aren't entering the multiplexes, but the streaming services are legitimate powerhouse in the entertainment business and their pictures will likely get more mainstream attention than if they were being distributed by a smaller group like A24 or Magnolia (great companies with solid movies but rarely do they have something that catches the masses attention). (CS: Alas, I was wrong here. A24 has created several buzzworthy and talked about movies like Moonlight, The Florida Project, Lady Bird, Hereditary, Midsommar, Uncut Gems, Everything Everywhere All at Once and many more. Meanwhile, Netflix has been more about quantity and has made countless movies that even movie critics have never heard about, and Amazon Studios movies have mostly gone by with minimal buzz.)

It reminds me of the 1970s and 1980s when there were several smaller film studios like Cannon or Orion that specialized in mid to low budget pictures that still had the backing and finances for wide release. They weren't in the league of the big six and they didn't knock out the big summer event spectacles (though Orion birthed the original RoboCop) but they made popular movies that were able to reach all the cinemas with healthy TV advertising and trailers before the big budget tentpoles. They were smaller studios whose pictures that weren't doomed to the arthouses and videos like today. (CS: Of the many differences, one of the biggest with Netflix compared to Orion or Cannon is those movie studios actually marketed and promoted their movies, while Netflix mostly just relies on their front page splash or someone stumbling their way to them. Though, Amazon Studios has advertised at theatres, so they seem to understand the marketing game a bit better.) 

Netflix and Amazon follows these studios' philosophy as they want to make commercial and popular features but give the filmmaker a large degree of creative control and assure the vision be fulfilled by not following the cookie cutter formula expected from most big budget movies. (CS: What we ended up getting was a lot of formula movies that also lacked any 'studio interference', which translated to meandering two and half hour dullfests or shorter movies that still could have used some editing and reworking.) It is an exciting prospect to see some of the more creative filmmakers like Terry Gilliam, Cary Fukunaga, Jim Jarmusch and the Duplass brothers given a chance to make the movies their passionate about and have a budget to carry it out. Gilliam's deal with Amazon will finally make the long anticipated and never believed would happen passion project, The Man Who Killed Don Quixote, finally become a thing we can watch rather than just hear it be moaned about over how big studios are unwilling to finance it. (CS: Another movie that ended up barely making a blip, and maybe there was a reason no big studio wanted to finance it.) 

Those smaller studios that made wide release mid-budget pictures are no longer around for a reason. The movie culture changed and it was too hard to compete with the big guns and their pictures eventually just didn't earn enough to keep the companies alive. This is where I wonder if Netflix and Amazon trying to become legitimate film studios will become a short term bit of euphoria. The plans are great and great movies will come out of this but do they have a business model to actually sustain film production? (CS: It took awhile, but it is clear Netflix does not have the funds to sustain. While they have made movies like Roma and The Irishman, the golden period I expected never came, due to them seemingly greenlighting anything that wasn't Holmes & Watson.) 

I'm still baffled how this new movie strategy is actually going to make them money. (CS: If anything, the strategy in the long run caused Netflix to lose subscribers,) I know Amazon has plans to release their pictures in the cinemas and then after four to eight weeks put it up on their Amazon Prime streaming service. (CS: I saw The Big Sick, Gringo, and Life Itself in theatres, but it appears Amazon Studios has largely abandoned their theatrical plans and release straight to Amazon Prime now. Though now that they own MGM and James Bond, it likely means they will have a few theatrical releases a year.) While Netflix is avoiding movie theatres by putting it straight up on their service. (CS: There are rumours that Netflix may start releasing a few of their bigger movies to theatres each year like the upcoming Knives Out sequels.) 

Both strategies may not end up being that different as the major movie theatres have proven to throw hissy fits when a distributor doesn't follow the traditional model of putting a movie in the theatre and then waiting three months before going on video. (CS: This has now changed, with not only the release window for video rentals decreasing, but a movie like The Batman was on HBO Max in the US and on Crave in Canada in a little over a month after its theatrical release.) It may be a challenge for Amazon to get any kind of wide release, but with Netflix set on coinciding release dates, it will definitely kill any chance of their movies being screened in any theatre chain of significant size. (CS: Amazon Studios ended up playing ball for the aforementioned movies to get wide release, but the release window has drastically changed now with Covid.) 

The reason this is a problem is that movies make back a budget on theatrical release and in a much smaller degree VOD. The theatrical release isn't going to be substantial unless major theatre chains suddenly feel the pressure to relent on their stringent release windows (which will only happen if they fear losing money by missing out on a big hit). Yet Netflix and Amazon are dropping millions and millions of dollars to buy movies and also have some rather expensive production deals in place. In the case of the Sandler deal it has been reported to be close to what he had with the big studios, which is around $60 million. (CS: Once again, this eventually, after several years, came back to haunt Netflix. Amazon has much deeper pockets, and also doesn't produce near the same amount of movies, and most of them have been relatively small and low-budget releases.) 

I'm baffled in how this is a profitable strategy for the streaming services. (CS; It wasn't.) Do they think that the promise of a potential Oscar nominated Best Picture or brand new Sandler fart jokes or a new indy darling will trigger a massive jump in subscribers? (CS: It appears now that Netflix seemed to believe they would always increase in subscribers, despite evidence there is a limited amount of people on Earth unless the strategy was to eventually branch out to primate, fish, and dogs.) I'm not sure with Prime but I know with Netflix that there aren't any visible sponsors or advertisers. As I mentioned, there will likely be minimal money recouped at the movie theatres. I'm not master of economy or business, but it seems to me that the only way these movies are going to make money and justify their higher price tag is increased subscriptions. Or maybe this is why Sandler has a deal in place, as he can mentor all filmmakers on how to cram a movie with product placements. (CS: I actually think Sandler Netflix movies have less product placements than the theatrical releases.)

The foray into the movie business seems to be creatively driven. (CS: Alas, it wasn't.) Netflix and Amazon want to give talented directors and writers a chance to make fresh and innovative movies. (CS: Kind of, but then they rarely promoted the movies, so viewers didn't track the pictures down and create any major discussion around them.) A chance to give opportunity for creative folks that aren't getting a chance at the big studio level, I love that and it will likely make great movies. (CS: The Irishman was great.) I just don't know how long this party can last in the current movie environment. (CS: The biggest legacy from Netflix and Amazon Studios going into the movie business will be how it motivated movie studios and networks to create their own streaming services, and eventually, alter how movies would be released, but in the end, the importance and longevity of the movie theatre was proven once again.)