There was a recent article in the Hollywood Reporter about how Netflix could screw filmmakers as they always hope their film will be the next Kings Speech or The Imitation Game but the odds of that happening as so big.
Netflix could screw filmmakers but it will also allow them to get their films to a much wider audience than they would likely do. Break out indie box office successes are rare for every Kings Speech and The Imitation Game there are dozens of indie films that rarely get a chance to find an audience in cinemas. In years gone by these smaller films would be given a chance to rind audiences but nowadays exhibitors are quick to dump them.
Oscar winner Whiplash only took $12m, Best Picture winner Birdman $42m with a budget of $16.5m, marketing campaign including Oscar campaign of $20m+ would mean that its unlikely to see a profit from its theatrical run.
American Sniper made more money at the box office than all the other Oscar Best Picture nominations put together. After the champagne has been drunk and the accountants look over the books of these films will they be happy with what they got back?
You look past the top 50 films of last year on Boxofficemojo very few will see a profit from their theatrical release with many that received critical praise. Netflix gives the chance to allow millions of people to get to see these films that would otherwise be seen to far smaller audiences. I’m sure most filmmakers want their films to be seen by as many people as possible and cinemagoers should be given the opportunity to see films day and date in the comfort of their own home or if they want to pay to see it in the cinema they can do that too. But as cinema screens get smaller home TV screens get bigger.
VOD day and date releasing is the future of film releasing the studios want to do it audiences want it as many are tired of being ripped off by exhibitors who have dramatically raised prices in recent years and likely to get more expensive when the Virtual Print Fee that distributors pay exhibitors to pay for the installation of Digital Cinema ends. Many of the cinemas have 2K projection but will need upgrading to 4k but that cost will more likely be passed to customers with even higher ticket prices.
Netflix is now worth of $28 billion they spend over $2 billion a year on film and TV programs and acquisitions which is on the same level as most major studios.
Cinema attendance is dropping and has been for many years; it has been artificially inflated in the last 5 years by 3D surcharges and dramatic cinema price increases. Audiences might come out for the mega-movies but the smaller films are suffering as the smaller films are suffering as audiences become far more picky on the films they choose to pay to see.
25 years ago today Pretty Woman was released it opened with $11m and went on to stay in cinemas for 26 weeks taking $178m (opening was 6% of box office) This was repeated in July and November with Ghost and Home Alone. Would any of those films be made today doubtful by a studio and if they did its doubtful exhibitors would allow them a chance to find an audience.
Deadline charted the top 20 most profitable films of last year for all the hundreds of millions of dollars the films took in box office worldwide the profit on them is very small. Transformers Age of Extinction took $1 billion worldwide but will see a profit of $250m which is close to what American Sniper will make but would of taken half the amount of box office.
A film released through Netflix will still get a home video release as has shows like House of Cards. Exhibitors have to wake up and realise the current film distribution format doesn’t work as many feel ripped off by the cost of going to the cinema if they had the option to see the film VOD day and date many would take up the option but still many would go to the cinema.
The studios are all owned by mega-corporations which avoids a Heaven’s Gate style box office disaster swallowing up the studio. There have been many massive flops in recent years like John Carter, Battleship, The Lone Ranger that would previously engulf the studio but instead the corporation rights it off the executives who green-lighted the films get fired (and get production deals at the studio or rivals) and the whole thing starts again with a new head on the studio.
To many of these mega-corporations having a studio is glamorous and a couple billion dollars a year is like playing a game of monopoly. But with studios reliant on these $200m mega-movies how long will it be if several o these mega-movies fail. Last year The Amazing Spider-Man 2 was seen as a failure while X-Men Days of Future Past was seen as a hit but they both took the same at worldwide box office. Next year Independence Day 2 opens 20 years after the first film opened and took $817m worldwide if the sequel took less than that it will be seen as a failure. But with so many other mega-movies being released how can they all do the box office that studios are expecting. Sooner or later the studios will have to realise what they are doing can not be sustained and what Netflix is doing is the future of film distribution.
Blockbusters learnt the hard way when they were begged by Netflix owners to invest $50m into the company they refused and years later Blockbuster is no more which could be the same for movie theatres if they don’t learn from Blockbuster in 25+ years time?