The streaming platform Netflix has established itself as an unavoidable giant in the world of cinema, and has a strategy to counter the arrival of Hollywood studios in the increasingly contested video streaming market.
Netflix has played its cards right in the world of the Seventh Art. The world number one streaming platform invested 175 million dollars in The Irishman, the most recent film by Martin Scorsese. By way of comparison, in 2015, the blockbuster Jurassic World had cost Universal Pictures 150 million dollars. By choosing three heavyweights of the American box office – Robert De Niro, Al Pacino and Joe Pesci – Netflix confirms, with no ambiguity, its desire to compete with the large American film production studios, which had otherwise been immovable in the industry.
The platform has already competed with some big names. During the 91st Oscars ceremony, it pocketed three awards for Alfonso Cuaron’s art film Roma. The arrival of Netflix has irreversibly altered the traditional economic model of cinema, as the platform is able to sustain skyrocketing production budgets, thanks to recurring revenue from its 150 million subscribers.
However, the streaming site struggles to adapt to the European model, which is characterised by public financial support for creation of cinema.
“The goal of Netflix is to make money, not art. As a production house, it signals the death of local economy. The revenue from a film is no longer shared between producers and distributors,” comments Raluca Calin, a sociologist specialising in European cinema.
Especially in the Hollywood market, the strategy of Netflix is to nuance their output. It has not yet reached the lavish budget possibilities of Hollywood films; in 2018, Avengers: Infinity War was estimated to cost between 320 and 400 million dollars.
Attracting the great directors
Netflix owes much of its success to its original series such as Black Mirror, Stranger Things and La Casa de Papel. In three years, its budget for these productions has tripled, rising from 5 billion dollars in 2016 to 15 million dollars in 2020. Rivals Disney, Warner Media and NBC Universal are determined to make their own impact by breaking into the video streaming market in recent weeks. From Netflix’s perspective, want to play Hollywood at their own game by producing blockbuster films; they have already attracted major directors like Martin Scorsese, Steven Soderbergh and Guillermo del Toro.
This is a vital move for the platform which will soon lose its rights of exploitation for some of the series which engendered its popularity. According to a study by data analysts 7 Park Data, 80% of programmes streamed by Netflix are not their own programmes. These shows have been produced by its competitors, and there is the continued threat of their withdrawal from the platform. This looming reduction of its catalogue is shown most notably in the departure of cult series such as Friends and The Office, which will return to NBC Universal in 2021, and Grey’s Anatomy, which belongs to Disney.
However, nature abhors a vacuum: Netflix will compensate for this loss of content with an upcoming blockbuster. Six Underground, approved by Michael Bay and allocated 150 million dollars of Netflix’s budget, will be online on 13th December.
Translated by Jenny Frost