October 30, 2013

Netflix Expanding into Original Movies? Here's How it Could Affect Independent Filmmakers

netflix-originalsIt's safe to say that Netflix took the world by storm with its first original series, House of Cards. Not only was the show immaculately produced, shot, and acted, but it also may have planted the seeds for an entertainment revolution in that it signaled the beginning of a shift away from traditional media outlets towards online streaming services. Today we got word that original series might just be the tip of the iceberg for Netflix, whose content boss said that original movies could be a reality for the company very soon. If this is the case, and Netflix starts taking on a studio-like role in the film world, what would the implications be for independent filmmakers? Let's take a look:

First, here is Netlix's Chief Content Officer, Ted Sarandos' keynote address at the 2013 Film Independent Forum:

And here's the little tidbit that has film folks excited:

What we’re trying to do for TV, the model should extend pretty nicely to movies. Meaning, why not premiere movies on Netflix, the same day they’re opening in theaters? And not little movies — there’s a lot of ways, and lot of people to do that [already]. Why not big movies? Why not follow the consumers’ desire to watch things when they want?

If Netflix does decide to make the foray into original films, they would likely start large-scale, something with notable directors and A-list talent. If this strategy is profitable with big-budget filmmaking (and it almost certainly would be), the company, with its spot-on statistical analysis and built-in audience, would be in an incredibly unique position to become not only a leading distributor of independent films, but also a notable funder of these films.

The fact is that Netflix knows exactly what you like, when you like to watch it, how many times you get up to pee while watching it, and probably some other really weird statistics. With the same prudent statistical analysis that told them it was a good idea to make House of Cards, they have the power to determine the exact numbers of people who would ideally watch certain kinds of films. With that information, they could fund various scripts in proportion to the built-in audience that Netflix's statistics tell them these films would inherently have.

This kind of funding model, one based on legitimate viewer statistics, would significantly reduce the risks Netflix would be taking with its capital when funding independent films. Of course, scripts would likely have to meet an exacting set of criteria in order to qualify for funding of any sort. However, considering Netflix's seeming devotion to providing its viewers with smart and engaging original content, I wouldn't be particularly worried about filmmakers with original stories and ideas being shunned like they often are in the current studio system.

This whole shift could very well leave theaters, both large and small, in the dust, but that's a discussion for another day. At this point we should get excited for the tremendous opportunity that Netflix could possibly present to independent filmmakers with an original film funding and distribution system. Now however, it's time to sit back and see how this all shakes out.

What do you guys think? Would a Netflix system of producing and distributing feature films be beneficial to independent filmmakers? Let us know in the comments!

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25 Comments

On the surface this is a good thing.

But we have already seen studio execs fall into the trap of thinking they could come up with a formula for success (a + b + c + d = $$$) and it often leads to lowest-common-denominator crap. I would hate for Netflix to fall into this. They toed this line already with how they came up with House of Cards, and they turned out to be right in that case.

But I worry about the day someone with the purse strings starts insisting on the shoehorning in of elements (or stars) into a project in a way that is harmful to the integrity of the story, simply because some statistician things it will make more money. If Netflix can help filmmakers maintain their vision and credibility while making profit for everyone involved, I'm all for it. But if they start trying to conform everything into a money machine, regardless of the original intent of the story, we will all be the worse for it.

In a way, every niche cable channel has already fallen into this trap. Channels that were created to cater to a particular audience have slowly but steadily abandoned those original viewers because they make more money putting dreck on the screen. Remember the last time you saw anything remotely related to music on MTV? Or historical shows on the History Channel? Bravo used to be full of high-brow content, now it is the culprit responsible for unleashing the Real Housewives pestilence on America. These channels used to just be a content exhibitors, but once they became content providers it led to a downward spiral of quality.

I don't want profitability to distort and pervert Netflix in the same way.

October 30, 2013 at 12:36PM, Edited September 4, 11:21AM

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Damon

eventually, it will.

When you're the new kid, the underdog, fighting for marketed share and even your business' very existence, you are creative, risk taking and innovative. You push the envelop.

If your business achieves market saturation, what it perceives to be it's maximum marketshare/customer base/sales potential, your business model shifts to lowering cost in order to raise profits. Ride that out as long as possible before the market demands or competition forces you to update/invent/explore new products.

Netflix is pushing the distribution envelop. I love what they're doing, but business is business. At some point the work they're doing will need to be profitable.

October 30, 2013 at 2:40PM, Edited September 4, 11:21AM

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sean

What's to stop Netflix from distributing films digitally to theatres say a week early? On top of that, because Netflix is spending wisely based on its own statistical analyses (presumably incurring less overhead in the process) its movies could potentially come with lower ticket prices than those distributed by rival studios.

Or better yet, Netflix could eventually open their own brick-and-mortar theaters that exclusively showcase their films before being released for streaming audiences. Obviously this is an extremely long-term kind of goal, but it's not outside the realm of possibility of Netflix finds success funding its own studio productions. I think we are vastly underestimating the potential here when it comes to this model of film distribution. It's about so much more than simply putting new and original content on streaming media devices.

October 30, 2013 at 12:50PM, Edited September 4, 11:21AM

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Joe Lewis

What's interesting to me is that Netflix hasn't even broached the second possible side of their business...being a content distributor for smaller users. Like Vimeo is doing with VOD. Right now they are paying for content to serve to users; they could easily pull in revenue the other way, allowing indie movie people to pay to be hosted and reach a wider audience. And charge for premium content.

There's honestly a million ways they can go; and their ability to target customers positions them to do for video what Amazon has done for eBooks. It's just a matter of them deciding when and how they want to do it

October 30, 2013 at 6:23PM, Edited September 4, 11:21AM

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Chris

I've been wondering this for some time... would also start giving itunes a run for its money (not that it isn't already doing that).

October 31, 2013 at 12:56PM, Edited September 4, 11:21AM

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David Stewart

Brick-and-mortar is too inefficient of a delivery method. Faster internet and a more efficient compression codec avails anyone with a broadband to a home movie experience. (the so-called "Bel Air Circuit" and "Prima Digital Cinema" are already doing this .. Prima's first run films run $500/viewing ... nice to be an early adopter).
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My guess is that Neflix will eventually be outmuscled as a chief online movie streamer by the likes of Microsoft, Apple, Intel or Google or even an existing cable provider like TW or Comcast. One of them may even acquire Netflix once the share prices drop a little (Netflix has something like $6B of off-the-book liabilities, which will have to be paid off). Once the bulk of the entertainment migrates online - any film/song at any time - the market will fragment into smaller and smaller niches.
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PS. Sony and Time Warner already have their own streaming services too.

October 30, 2013 at 8:40PM, Edited September 4, 11:21AM

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DLD

Eventually Netflix will reach it's limit. For now it's pretty cool, but can the entire Film and Television industry live off $7.99 a month? I don't think there will ever be a point when Netflix can offer "big budget movies" on their theater release to every subscriber. I thought that a service that costed more than theater tickets that allowed you to watch theater movies through streaming might work, but Netflix subscriptions?

October 30, 2013 at 12:51PM, Edited September 4, 11:21AM

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Maybe al la carte prices for premier content? I agree that 8 bucks a month isn't enough to justify big budget films. But HBO is the biggest film studio in the world, and charges just 18.00/mo. But then again, they have 30 million subscribers...

But the model definitely works, just have to work the numbers.

October 30, 2013 at 3:27PM, Edited September 4, 11:21AM

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darbpw

O if I only had 1 million customers at $7.99 a month!

October 30, 2013 at 7:31PM, Edited September 4, 11:21AM

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Gene

Netflix has 40 million subscribers.

http://en.wikipedia.org/wiki/Netflix#Overview

October 30, 2013 at 7:35PM, Edited September 4, 11:21AM

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Gene

I hope this does become a reality. It gives hope to new filmmakers like myself who are just starting to get interested in distributing ideas.

October 30, 2013 at 1:00PM, Edited September 4, 11:21AM

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I believe that Netflix will be the main outlet for Independent film in the immediate future. Once it becomes successful (which I believe it will) studios will take notice. The films that become successful online will be bought from Netflix by the studios and released to theaters. Then the studios will develop their own websites designed on the Netflix model.

October 30, 2013 at 1:20PM, Edited September 4, 11:21AM

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Andrew

Amazon Studios has been pushing hard for 3 years now on this. And they are now a WGA signatory! They are a real bona-fide movie studio and aggressive. Amazonstudios.com

Yep, the new world is here, and it's knocking at the door, loudly.

October 30, 2013 at 3:11PM, Edited September 4, 11:21AM

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darbpw

Netfix and Amazon should get involved with being Gigabit internet providers also. Google Gigabit internet is taking way to long get going. I will want to watch movies and tv shows in 4K over the internet. Gigabit internet will easily be able to carry 4K. 4K will take some time over traditional tv being that 720p is still what most HD is on tv, very little is even in 1080p yet.

October 30, 2013 at 7:13PM, Edited September 4, 11:21AM

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Gene

Before wishing to watch 4k content on tv you should wish for better compression first. I feel amazed when I switch from Itunes/netflix to a good bluray.

October 30, 2013 at 10:13PM, Edited September 4, 11:21AM

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Marcus

Please, get NETFLIX in EUROPE As Soon As Possible!!

October 30, 2013 at 5:24PM, Edited September 4, 11:21AM

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João Moutinho

Sorry for this off-topic question, but where do people go to recruit a crew in LA? Craigslist is all I have so far, but any other info would be appreciated, thanks all. Sorry again.

P.S. is there a forum coming to NFS anytime soon? A recruiting page would be amazing (with portfolios etc...)

October 30, 2013 at 5:53PM, Edited September 4, 11:21AM

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nate

Try staffmeup.com. Its decent.

October 31, 2013 at 12:42PM, Edited September 4, 11:21AM

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Jorge Cayon

"This whole shift could very well leave theaters, both large and small, in the dust, but that’s a discussion for another day. "

I will still want to see productions like Avatar and Thor on the big screen in 3D.

October 30, 2013 at 7:08PM, Edited September 4, 11:21AM

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Gene

Got to respect what Netflix are doing, they really are becoming a disruptive force! I don't think them getting into film production will affect indie filmmakers at all.

October 31, 2013 at 11:47AM, Edited September 4, 11:21AM

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Extra! Extra! Extra! Hot off the printing presses - Amazon vs. Netflix in the Battle Royal.
http://www.cnbc.com/id/101160491?__source=yahoonews&par=yahoonews

October 31, 2013 at 5:16PM, Edited September 4, 11:21AM

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DLD

Considering indie films can already get distribution through Netflix... and get paid next-to-nothing in doing so... I can't say I'm particularly optimistic that Netflix is really going to do anything that's going to benefit anyone other than Netflix. As a viewer I love them, but the licensing fees they pay are so low you might as well consider it a 'suggested donation'.

November 3, 2013 at 12:00AM, Edited September 4, 11:21AM

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Kris

Cool post. Thanks for sharing and I will be back to see what else you have to share soon.

November 10, 2013 at 4:29PM, Edited September 4, 11:21AM

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Well is good idea and great opportunity for independent filmmaker just like me but one more thing if guys can be honest with what you saying then greater future awaits everyone.

November 24, 2013 at 2:28AM, Edited September 4, 11:21AM

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adjaskie

Great article. I do not think that Netflix will help original filmmakers, just help them selves, but they could draw some attention to projects that might not have gotten any exposure and I think that is a good thing.

January 12, 2014 at 12:33PM, Edited September 4, 11:45AM

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