Netflix’s turbulent 2022 is eagerly watched in Hollywood, with a belief that its cinematic strategy must now change.
At the start of the year, Netflix’s biggest PR challenge was which story to celebrate first. Ratings for the streaming service have boomed across its range of shows and movies. dog power It was widely expected to become the first Best Picture winner from one of the streamers, such as red notice And do not search Record millions of eyeballs over Christmas. New season of luxury porn show Bridgeton was in sight. Everything was looking rather rosy.
However, in the past six weeks or so, in the land of Netflix, boobs have gone up. At least you read that way through the headlines you attract. Offers are canceled? Sure, but that’s the norm (getting to that). What’s even more worrying is that the service’s massive subscriber growth is over, and in its recent quarterly results, Netflix lost 200,000 of them. It estimates it will lose another two million lives by the middle of this year. For a company that used to pump nothing but good news to its investors, it came as a shock.
What should have happened of course. Companies can’t grow forever, and whenever they stop making the extra billions on top of the billions they already have, the stock market – sigh – responds as if they just lost their pants in an amusement park. Shock and awe and take their money elsewhere. Netflix’s stock price fell 35% when news emerged of its declining subscriber count. Not to mention that it brought in nearly $8 billion in revenue in just three months: the golden faucet appears to have been discontinued.
The stock market rebounded in the weeks that followed, of course, but the damage was done. Netflix has lost some of its luster as a colossal success story, and costs are starting to cut. Few cases of layoffs, and the cancellation of a select group of projects have been reported. Nothing drastic, but again: When your story is growing non-stop, that’s a very clear change of message.
It would be fair to say that Hollywood has been watching this story in a hawkish fashion. With a small amount of schadenfreude as well, I was fantasizing. Conventional studios that routinely expend a playing field that may tilt slightly in their direction.
After all, ever since Netflix signed their—yes—game-changing deal with Adam Sandler back in 2014, they’ve been the primary disruptive force in modern mainstream cinema. Hollywood studios struggled to catch up.
After all, Sandler may have peaked at the box office a few years ago, but he still managed to draw a crowd for comedy. say what you like Jack and Jill For example – and I’d be happy to give you a tight 20 minute – but it turned in and got a lot of people into movie theaters. Sony, just a year or two ago, was considering offering a $200 million feature with his name attached.
However, when it was still in a position to charge eight figures per movie, Netflix took Sandler out of the market. It significantly outperformed Hollywood, attracting a four-picture deal, which has been extended several times since then. Sandler became a very wealthy man, and Netflix enjoyed regular streams (arf) of hits.
It was a deal that I scorned when it happened. Sandler just signed up for the last big payday! He’s not the star he used to be! Less than a decade later, it’s hard to find a big movie star did not He had a Netflix check, and again, not so small. The sheer purchasing power of traditional stars has taken out of the reach of many traditional studio projects.
To give a glimpse into how much Netflix has affected, it was said to offer twice the price that Lionsgate can afford to snatch Take out the knives sequel to her service. Lionsgate, which bet on the original, never stood a chance.
Netflix wasn’t just paying top bucks. The top dollar has been redefined.
Also in its defense, it’s subsidized movies that otherwise would not have been made. Martin Scorsese struggled eons to get a studio to finance one of his passion projects, Irish. In the end, Netflix was the only place in town willing to spend a whopping nine figures. Meanwhile, Dwayne Johnson, Gal Gadot and Ryan Reynolds are said to have earned at least $20 million apiece — all in the same movie — for red noticea movie that Universal backed when it got too expensive.
However, that’s what Netflix’s growth has partially done in cinema. Studios have been priced out of a slew of projects, and the talent heads in front and behind the camera have shifted to smashing the salary cap. All along, Netflix has been reluctant to share its movies with movie theaters, albeit to varying degrees.
Just in terms of turning off the sirens, Netflix isn’t going anywhere. This seemingly troubled company will continue to bring in nearly $8 billion in three months again. It may be up to another – check notes – 220 million monthly paying subscribers into its coffers, but he will try to cope. It will be a long time before it collapses.
But also, her business model should now change a bit, and Hollywood knows that.
Netflix is known to have been created – unlike Amazon and Apple services – with other people’s money. She has a mountain of debt to service, although she is now making a profit. This debt requires market confidence, and Netflix is moving to the next stage of its business: It has grown, and now it has to merge.
We’re already hearing noises from a crackdown on password sharing and an ad-funded subscription option. But then, the deals have to change, too. Netflix will still likely outperform its competitors, but spending will have to be monetized somewhere along the line. something to give him. Will it be those expensive and risky films that lure Oscar voters? Will it double as mini thrillers, romance, and fruity movies?
The truth is that we don’t quite know the answers, only questions are asked. It’s worth noting that Netflix has what the studios don’t, either: a massive data warehouse, brimming with wit about what each of its subscribers is watching. She can tailor her movies more accurately to these subscribers. Don’t be surprised if we get more of that, and feel less.
After all, it’s long been known that when it comes to series, outside of high-end TV shows, Netflix will give most of their shows two seasons and that’s your lot. Then, what’s the point? Shows that run longer generally don’t attract new subscribers, and Netflix needs to keep people interested. Shiny new things do it. Season six of the medium show doesn’t do that.
That ruthlessness when it comes to TV reboots is likely to be planted more heavily in filming, too. Since Netflix has commissioned most of its films over the next 18 months, it will be a while before we see how things change, but in the same way that studios rely on franchises and big-name properties, don’t be surprised to see more Netflix going the same way.
Which begs the question: Where does this leave the studios? Irreversibly changed, I would suggest. Disney, Paramount, Universal and Warner Bros – four of the remaining major companies – have focused on their streaming services. MGM is completely sold out to Amazon. The other company, Sony, regularly sells its films to broadcasters rather than risking them against the whims of the cinema audience. Notice how the next Sony Matilda The film is a Netflix co-production, with the film getting a full cinematic release only in the UK.
Streaming devices have been a beneficial click of money for studios, especially as box office and physical media revenues have been severely curtailed. And herein lies the threat: If Netflix is spending less on its movies in the future, it will likely spend less on studio fare, too.
The studios chased the cash flowing, had reasonable success, and the old model went into business. Now it feels like a scramble for position, subscription revenue, and the occasional hit at the box office.
For now, the movies will not be affected by the news from Netflix the last two months. Some of the ships have already sailed, the cinema already has challenges of attracting audiences to return, and exclusive windows are shorter. What Netflix’s stance brings, for now, is more uncertainty.
But still: The banners, even if waned a little, remain remotely the biggest players in town. The era of free spending may only be beginning to come to an end, and Adam Sandler may be getting a little bit less for his next deal.
Don’t expect a massive change in the status quo. But don’t be surprised if studios and streaming devices work hand in hand going forward…
Specific Images: BigStock
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