Netflix is in the midst of some trouble – and it also risks losing the movie viewership that has been crucial to its growth: some thoughts.
Appreciating that there’s already been a fair amount of ink and space devoted to the challenges Netflix faces now that its subscriber bubble appears to be bursting, there’s an important test it faces in addition to its others. problems keeping moviegoers invested in its service.
Why? Well, against a well-reported backdrop of declining subscribers, price increases, the cancellation of many of its TV shows after one or two seasons, there’s a growing sense that Netflix isn’t It’s more of a particularly ideal home for movie buffs.
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Consider the evidence. Now head over to the Netflix menu page and try to find – aside from (coming soon) Netflix Originals – more than a dozen movies you haven’t seen there that you would consider adding to your watch list. A year ago it was much easier, and in fairness to Netflix, many of us devoured its catalog during various lockdowns.
Now, however, he faces a race against time to make many of his own films, while clinging to the catalog of titles he already has access to. It turns out that only one of these challenges is difficult. Netflix is now facing them both on time, and time is running out.
So what Netflix needs to do – and it realized this pretty early on – is build its own compelling catalog of movies. The problem he faces in doing so is that almost everyone has a huge head start.
The catalog is a major problem for streamers, and where already we feel that Netflix is starting to suffer in the face of its growing competition.
Look at the opposition. Disney, of course, is Disney, a company that’s been making movies for nearly a century and with a movie library to match. Universal, with its Peacock service, can dive into over 100 years of cinema. Paramount and Warner Bros the same. The streaming company that couldn’t match that bought MGM, with Amazon racking up billions to ensure a huge catalog of movies and a slew of franchises to grow in the future.
The sands shifted under Netflix’s feet in much the same way they did under those of traditional studios. Six months ago, few would have predicted that such a radical game-changer as Netflix would look at the headlines about losing subscribers, falling stock prices, cutbacks and business difficulties. And yet here we are.
Netflix has long been able to tap into those massive catalogs of movie studios that didn’t have a streaming release for them. For a studio, it was metaphorically obvious. Thousands of movies that had stopped selling on DVD were duly licensed primarily to Netflix, and more money poured into the coffers.
The point is that Netflix was making too much money and of course the distribution of movies was changing. It is said that the reason Rupert Murdoch pulled out of the entertainment business and sold Fox to Disney was because he saw how things were going and realized he was behind the times. Better to cash in some $70 billion or so in the bank than to watch things decline.
Other studios were more nimble and wanted the revenue Netflix got from selling their hardware. Disney has, of course, restructured its entire business around a pivot to streaming. Universal, Paramount and Warner Bros have all invested in their own services, which they are rolling out around the world. Sony is the latest studio not to have a service planned, and Netflix was quick to strike deals with it (the pair share the next Matilda cinema, for example). But Sony is in a different position of strength (although it would probably prefer a platform that brings in billions): all other streaming platforms are buyers for its movies, and Netflix will have to dig deep.
This is not a viable long-term strategy. If Netflix had bought MGM, for example, its future would have been a little easier. Still, Netflix couldn’t. First, its activity is based on a debt, which we will have to start repaying. Second, its competition is cash-rich. Amazon and Apple have cash reserves and could comfortably outspend Netflix on a major acquisition. In this case, that’s exactly what Amazon did. Every catalog of movies that Netflix might be interested in buying will face fierce competition from the others.
By the way, Sky Cinema faces a similar challenge. It has long-term deals with Hollywood studios, but at the end of 2025 its deal with Warner Bros and HBO comes to an end. At this point, Warner Bros’ HBO Max service will launch in the UK and Sky will have plenty of gaps to fill. You can already see the substantial investment he puts into his own productions. Netflix is doing the same – but even that strategy isn’t quite going to plan.
The Irishman
Netflix’s longer-term sustainability will surely depend on what it does itself. His willingness to quickly undo things when the algorithms don’t like them notwithstanding, his television side has succeeded. Cinema side? Unequal.
Netflix movies fall — documentaries aside (that’s for another article) — into three main categories.
First there’s the Oscar bait, and that’s where I think Netflix excelled. While I think it’s sometimes sport to rain fire on big corporations, for whatever reason it did, Netflix has backed movies that obviously wouldn’t have been made otherwise. The most publicized was Martin Scorsese’s very expensive The Irishman (ironically, his new project – Moonflower Slayers – turned out to be too expensive even for Netflix, and went to Apple instead), but also check out films by Alfonso Cuaron, Jane Campion and David Fincher. Movies that may not have snagged the Best Picture Oscar that Netflix clearly dreams of, but exist nonetheless because of it.
Then there are the blockbusters, which work on similar ideas. Bring in big commercial filmmakers – Michael Bay, Dwayne Johnson, Ryan Reynolds, Adam Sandler, the Russo Brothers – and let them spend. Sure, the movies have been variable, but Netflix has managed to create “event” movies out of some of them, even persuading the odd cinema to show them.
It’s the middle piece that’s the problem. On the one hand, Netflix’s business model resurrected the mid-budget film that was ubiquitous in the 1990s and early 2000s. This opened up a series of films that, again, would struggle to find a path. Yet the problem is that many of them are, well, forgettable. In many cases, quality control is felt on the store. It was in the early 1990s that Disney had a strategy of aiming for a new movie in theaters roughly every week. It stumbled and the studio spun. Too many movies came and went, and eventually he realized his future was less smarter bets.
Netflix doesn’t really have that luxury though. She needs her own movies, the kind you can’t find anywhere else. He therefore does a lot, but few are those who break through. Even some of those big blockbusters are struggling. For each Don’t look up – the rare beast that combines critical acclaim with blockbuster reach – there’s something like red notice, which finds wide reach but, after its release, barely a queue of people talk about it. Compare that with one of her previous hits, the Sandra Bullock title bird box. When it happened, it not only got a lot of attention, it got people talking. Exactly the kind of hit Netflix needed. With red noticewhat I would suggest is that three movie stars have more fun than the audience.
In his mid-range films, I will go further: quality control is omnipresent. As important as it is for Netflix to build a library of movies quickly, they still have to be good. As it stands, as of this writing, it has already released 60 movies globally in 2022. Some of them are country specific, but again: how many can you name? ? How many stayed with you? The worldwide investment in production is a real bargain, but Netflix’s top-tier package in the UK now costs £15.99 per month. If you’re here for the movies, not the TV, that seems pretty stretched, especially when niche services like Mubi or BFI Player seem to offer a wider range of movies for less.
An aside here: during the confinements, the studios were content to sell films to Netflix. Heck, Sony has sold arguably the best blockbuster of 2021 – The Mitchells vs. the Machines – in the service. Now? They don’t need it. Cinemas are open and mitigating the loss of a theatrical release is not as significant. There may be a few sales along the way, but far less.
This effectively brings us back to the same point: Netflix needs to control its own pipeline.
Right now it is. Yet it also faces a perfect storm. It’s losing access to third-party movie catalogs, it’s in a race against time to build a collection of movies to compete with its growing competitors, and it’s trying to halt subscriber loss while maintaining increases. of price.
Something must give there. Currently? Looks like that’s the lineup of interesting movies – and more are waiting to mop up the business. Maybe for less than £15.99 a month too…
Some images: BigStock
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