Cinema & Netflix : The best of ‘Frenemies’?

With the love-hate relationship between exhibitors and the streaming giant coming to a head in 2018, Patrick von Sychowski examines whether this darkly tragic tale is, in reality, a burgeoning romance.



For someone who once quipped that the biggest innovation in cinemas in the past 30 years is that “the popcorn tastes better”, Netflix CEO Reed Hastings seems awfully keen for his platform’s films to have a star turn on the big screen. “We are not anti-theater,” Hastings explained to reporters last year, “we just want things to come out at the same time.” And therein lies the problem for cinemas.


The day-and-date release of films in theatres and online has been at the heart of the conflict between Netflix and NATO and UNIC — the trade bodies representing the interests of cinemas in North America and Europe — for several years. This discussion predates the days when Netflix was a DVD-by-post company. Yet, with last year’s champion of eliminating the release window (Sean Parker’s The Screening Room) having now vanished, this year the focus is back on the tussle between cinemas and Netflix.


1. Netflix & Cinemas

Are they co-dependent?

Talking to Cinema Technology magazine, UNIC’s CEO Laura Houlgatte begins by acknowledging that a strong and healthy online market for film content is essential for the health of the wider industry. “The cinema industry can exist and thrive alongside streaming providers like Netflix,” she affirms, but also feels that “their — and the audience’s — best interests are served by films receiving proper theatrical releases, including clear and distinct windows.”


In this regard, rival streaming studio “Amazon’s commitment to the theatrical experience sends an important signal to the broader industry that there is a willingness to engage and be proper partners,” she points out. Amazon makes a show of respecting the window and has reaped recognition with prestige films like “Manchester by the Sea”, while Netflix has had to contend with winning in the documentary categories with films such as “Icarus”.


2. A serious case of Awards Envy?

Netflix famously doesn’t reveal its viewing figures, since the company’s metric of success is the number of subscribers and churn. As such it needs high-profile titles, whether TV series or films, to attract and retain customers. This is why it can afford to buy the film titles that Hollywood studios lost their confidence in over a successful theatrical release, titles such as Warner Bros “Mowgli”, Paramount’s “God Particle” and “Annihilation”, and Warner Bros/New Line’s “Shaft” (the latter two for overseas).


Netflix scored its biggest success this year when it acquired Alfonso Cuarón “Roma” before it went on to win the Golden Lion at the Venice Film Festival and became hotly tipped to be nominated for a Best Picture Oscar. Cuarón confirmed that the film will be screened  “in many places on the big screen,” under what Netflix somewhat coyly describes as “a new type of hybrid distribution agreement,” without going into detail.


Netflix earlier caused uproar in Venice, with the head of Italy’s distributors’ association resigning in the wake of  controversy over the day-and-date release of the police-brutality drama “On My Skin” in cinemas and on Netflix days after its premiere. The Venice Film Festival had come under criticism for ‘embracing’ Netflix, with UNIC issuing an open letter which urged “festival competitions” to “only consider for inclusion those films intended for theatrical release.”


No Netflix film had screened in Cannes earlier this year, after French authorities said there would be no exemptions to regulations requiring a strict window between theatrical and SVoD platforms. Having said it was ‘boycotting’ Cannes (technically its films did not qualify for the main competition), CEO Reed was later conciliatory, saying “Sometimes we make mistakes. We got into a bigger situation with Cannes than we meant to.” Controversy continues to stalk Netflix.


3. Ramping up the VOD production values

Netflix doubled down on its awards ambitions this autumn when it announced that BAFTA’s head of film Jim Bradshaw would leave after 11 years to join Netflix’s UK awards team. In addition to “Roma” Netflix has high hopes this year for the Coen brothers’ “The Ballad of Buster Scruggs” and Paul Greengrass’ “22 July”, though Bradshaw won’t join Netflix until after nominations are announced on 9 January, 2019.


Meanwhile, Amazon Studios has recently announced that, not content with spending hundreds of millions developing a television show based on the “Lord of the Rings” books, it is now expanding from arthouse titles such as “Beautiful Boy” into far bigger budget feature film productions ­— it is appointing Julie Rapaport, at Amazon since 2015, to co-head of movies. “We’ll be looking for movies that might expand to a larger audience,” Amazon Studios’ head Jennifer Salke recently explained to Screen International, while hinting that the studio might be adding direct-to-platform original film productions in the future.


If these new Amazon Studio projects reap both box office, critical and awards success, it could put further pressure on Netflix to re-evaluate its insistence on strict day-and-date for all its titles.


4. “Netflix is killing the cinema”


When North America’s box office declined in 2017, the lazy newspaper headline trope that powered many thousands of column inches was that ‘Netflix is killing cinema’. Rather than poor films or changes in release patterns being to blame for year-on-year declines, journalists had decided that people had grown tired of the silver screen and preferred ‘Netflix and chill’ for their entertainment. Yet two studies released in the past year have shown that far from being mutually exclusive, there is a strong overlap in consumers who both go to the cinema and subscribe to Netflix.


Giving its annual keynote at the KINO 2018 conference in Baden-Baden, the German Federal Film Board (FFA) presented its findings “Kinobesucher 2017” that revealed some 23% of cinema goers were also SVoD subscribers, but that 55% of all SVoD subscribers were cinemagoers, buying on average 5.5 tickets and spending €9.44, compared with a market average of 4.7 tickets and €8.90. The study undertaken by GfK also showed that while 55% of German SVoD subscribers had seen at least one film in the cinema in the past year, for the whole population that figure was just 37%. “Users of streaming services are not the enemies of the cinema, but its friends,” affirmed FFA’s Frank Völkert.


Another study by the US cinema advertiser, National CineMedia, found that far from ditching traditional cinema in favour of tablet cinema, Millennials remain passionate about movies. In a study carried out with Omnicom Media Group’s Annalect and CivicScience, it found that Millennials “make up the largest frequent movie-going age group,” and are “highly invested in the overall movie-going process.”


Although they naturally have an interest in promoting themselves as a channel for advertisers and brands to reach the highly desirable demographic, NCM has a valid point in highlighting that, with Millennials making up 49% of movie-going audiences, the cinema [or more specifically NCM-affiliated cinemas] outrank all US broadcast networks (ABC, NBC, etc.), hit TV shows (“The Walking Dead”, “Big Bang Theory”, etc.) and films such as “The Last Jedi” and “Justice League” outperform all sporting events with the exception of the Super Bowl. It could be argued that some Netflix shows might be even more popular, but since Netflix doesn’t carry adverts or release its viewing figures, NCM doesn’t have to concern itself with comparisons to the subscription platform.


With cinema attendance having bounced back in the summer of 2018 in the US (less so for some parts of Europe), talk of Netflix killing cinema has recently died down. Hopefully there will be more research into affinity for films across online platforms and genuine cinema venues before the next lull in cinema-going prompts a further wave of lazy headlines. As one exhibitor at CineEurope mused, “if you like cooking Italian food at home, it doesn’t mean you don’t also like to eat out in Italian restaurants.” 


5. Day-and-UK-date releasing

Day-and-date releasing is already a fact in the UK, albeit not for Hollywood blockbusters. Most notably the boutique cinema chain Curzon launched its Curzon On Demand in 2010, later re-branding it to Curzon Home Cinema in 2013.


In partnership with its sister-distribution company, Curzon Artificial Eye, it makes independent, arthouse and foreign language films available to download at home on the same day as they open in its UK cinemas. The per-title price is £10 for a new releases like Cannes award winner “Cold War” or as little as £3 for older films. Curzon also has a platform called Curzon12 under which Curzon members gain access to 12 carefully curated films per month, typically arthouse classics. Far from being rejected by the cinema industry for the promotion of day-and-date titles on VOD, BAFTA actually bestowed its 2017 Outstanding British Contribution to Cinema award on the Curzon Group, which incorporates Curzon Home Cinema, at the 2017 EE British Academy Film Awards.   


Taking the lead from Netflix, Amazon and Curzon, the UK-based pay-TV platform Sky launched its Sky Cinema Original Films earlier this year. Under this venture with Altitude Films, Sky will finance and distribute original titles that are scheduled to appear both in cinemas and on its satellite platforms at the same time. Sadly, the critical and box office success of this venutre to-date has been somewhat underwhelming, although the operator is still firmly on track to co-finance and release six or seven titles per year.


While Sky Cinema’s “Monster Family” was the widest-ever day-and-date release in the UK, appearing on 134 screens, you would not find it or any other Sky or Rakuten titles in any Cineworld, Odeon or Vue cinemas. The three multiplex majors that operate around 64% of all UK screen maintain a very strict 16-17 theatrical window and refuse to show any title that does not respect it.


This has been the case since Walt Disney tried to shorten the releases window of Tim Burton’s “Alice in Wonderland” from four to just three months back in 2010. That move led to a boycott by the Big Three that was only reversed just hours before the film received a Royal Gala Premiere in London. So, while day-and-date is a reality in the UK, currently that is only true for certain smaller films and cinemas — not the blockbusters or big chains.


Mini major studio or major studio delusion?

By late 2017, Netflix was smarting from its prestige films “Okja”, “Mudbound” and “First They Killed My Father” all being largely shunned by festivals, and cinemas. Meanwhile, its $90million action-fantasy “Bright” got a derisive 26% Rotten Tomatoes score and reviews such as “Bright is when Harry Potter vomits on a cop flick” (Mark Kennedy, AP).


Netflix threw down the gauntlet for exhibitors and studios, announcing  in October last year that it would produce and release 80 or so ‘original films’ in 2018. By way of comparison, the Hollywood ‘Big Six’ released 93 between them in 2017. This would be the year Netflix proved it could create films as appealing as its binge-inducing television shows.


Disney had also announced it would withdraw its films from the platform, once its agreement expired in 2019, to launch its own streaming site. To make up for the loss of “Frozen” and “Avengers”, Netflix could no longer rely on buying blockbuster films from established studios but would have to become a studio itself. This is why it is prepared to spend a staggering $140million on films like Martin Scorsese’s “The Irishman” that unites De Niro, with Al Pacino, Joe Pesci and Harvey Keitel.