Chapter 17
New Media—New Model—As Significant as the Majors
With the evolution of Netflix, Amazon Studios, Hulu, and YouTube into global distribution platforms, with other companies to follow, the streaming services have proved themselves to be significant buyers in the mainstream movie world. The Internet titans now attend film markets and film festivals that have evolved concurrently into film markets, like Sundance, Toronto, and Cannes, and compete with the major and mini-major studios to acquire filmed entertainment content.
In 2016 at the Sundance Film Festival, Amazon expanded the company’s catalogue and outdid Fox Searchlight, Focus Features, and other studios by procuring one of the hottest films at the festival, Manchester by the Sea, and also acquired Whit Stillman’s Love and Friendship, and a documentary about the outrageously legendary writer, J.T. LeRoy.
Even prior to Sundance, Netflix bought the worldwide streaming rights to the films Tallulah, starring Ellen Page; The Fundamentals of Caring, starring Paul Rudd; and an Iranian horror movie called Under the Shadow. Worldwide streaming rights are a substantial revenue stream, and even though theatrical and other media rights remained available, interest in the films were diminished among other interested buyers with streaming rights gone.
Netflix is also allegedly responsible for driving up the bidding on The Birth of a Nation, Nate Parker’s movie about an 1831 Virginia slave uprising, which allegedly is the largest Sundance deal in history. Even though Fox Searchlight ultimately bought the film for less than the final Netflix offer in favor of a more conventional art house theatrical distributor, the streaming service still bid more than anybody ever has on a film at Sundance.
Art house or specialty films are the mainstay of film festival films and in years past, there has been a selectively robust business for these types of films by specialty divisions of major studios, if nurtured and promoted properly and especially if major award nominations result, which can be used in publicity and marketing to generate audience awareness and interest. With the rise of streaming services and the collapse of traditional distribution models and windows, as we discussed in Chapter 5, the audience that these services reach is exponentially greater than those of conventional independent distributors.
Filmmakers, who in years past only wanted a traditional theatrical release, even if a small one, have come to realize that there is a new business model, based on streams not ticket sales, that many patrons in today’s world prefer to watch things via streaming or download at home or on a wireless device, and that the audience of theater-goers has diminished. Amazon’s and Netflix’s big spending has helped filmmakers and festivals like Sundance and the type of pictures that premiere there, but on the negative side are questions about the commercial viability of specialty pictures, many of which are indulgent, non-commercial, and disconnected from popular tastes.
Netflix
Over the past several years of creating original programming and competing with major studios, Netflix has developed the “Netflix Original,” which is content that is produced, co-produced, or distributed by Netflix exclusively on their services. Their standard financial model is to fund the project by entirely providing money upfront, and if it’s a series immediately ordering two seasons of most. With the rapid and resounding success of Netflix award-winning original series,”House of Cards” and “Orange Is the New Black”, Netflix has changed the way people watch television as the media site is no longer limited to streaming post-theatrical studio films, non-theatrical features and network re-runs—it’s creating them. The company has dramatically grown its original content and has released an estimated 126 original series, specials, miniseries, and films as of December 2016, more than any other single network or cable channel. Netflix will be continuing an even larger slate of new original series from historical to docudrama, to sci-fi and superhero, to kids and teen animated and live-action programming, stand-up comedy, reality, foreign language, talk shows, and films of all genres.
Amazon Studios
Amazon Studios is developing feature films and episodic series for worldwide audiences. They are open to ideas from filmmakers around the world and recognize that scripts are critically important and seek feedback from audiences about projects and ideas even in the earliest stages of consideration or development, acknowledging that many scripts are just not accessible to most audiences. This very much supports my paradigm of writing and developing projects that market research tells you that people want to see. Amazon has a large development slate and options rights for material it develops. Its development staff works with writers, but for most projects the company tests various interpretations of the material with Amazon customers and based on the results, they make the determination of which projects will move forward. They have published submission guidelines, which are easily accessible online.
Amazon Prime
Amazon Prime is a service that allows customers to receive free shipping on certain items and now also streams movies and television shows, and following Netflix and Hulu, the service is venturing into original programming. Amazon Prime released fourteen original pilots in 2013 and asked viewers to vote on which ones they would like to see turned into full-length series. Here again is a division of another giant company who solicits feedback from audiences about projects before committing them to series. The amount of original content with good stories and screenplays and top-notch on-camera talent being produced by streaming services is making studios, network, cable, and satellite companies anxious as it seems as though there are unlimited growth prospects as Netflix, Hulu, and Amazon Prime are revolutionizing the television industry.
Hulu and Hulu Plus
Like Netflix, YouTube, and Amazon, Hulu is a subscription online streaming service and Hulu Plus has two levels of monthly fees, a lower price includes ads and a higher price is commercial/advertising free. Like its online rivals, Hulu is aggressively expanding into original programming of all genres as well as its continued acquisition of top-rated network and cable series. The service provides unlimited instant streaming of current episodes and full seasons of hit TV shows, plus a huge library of past seasons of top shows and announced plans to quadruple its investment in original programming over a short period of time. Hulu’s slate of original programs is designed to provide variety to consumers, to attract major industry talent, and to complement its existing catalogue with fresh approaches to popular genres. When Ron Howard’s Beatles documentary, Eight Days a Week, was only scarcely available in limited theatrical special screening venues, I discovered it concurrently on Hulu Plus and streamed it without leaving my house.
YouTube
Google-owned YouTube is currently spending well over $100 million on producers, directors, writers, and filmmakers to fund its largest spending on original content so far. By offering original content as part of the subscription service, leveraging prominent YouTube personalities in combination with professional producers, the company is posed to compete with sites such as Hulu, Amazon, and Netflix. The online video giant is aiming to create twenty-five hours of programming per day with the help of some of the top names in traditional TV. While in recent years, the traditional TV audience has declined, people are watching video on mobile phones, tablets, and computers, especially the coveted eighteen- to thirty-four-year-old age demographic. YouTube’s plan is to create ninety-six additional channels, which are basically homepages for specific artists, where viewers can see existing video clips and click a “subscribe” button to be notified when new content is posted, and content is much edgier than traditional TV platforms. YouTube is betting that a solid stream of good content will attract more revenue from advertisers, bring viewers back more frequently, and augment Google’s web-connected TV platform, Google TV. YouTube has attracted some of TV’s biggest stars as well as major film writers, producers, and directors and allows them a chance to create shows that are completely free from interference in the creative process, unlike the major studios. The site also gives them the opportunity to connect and stay relevant with a younger crowd whose viewing habits are moving increasingly to mobile devices.
YouTube Red
YouTube Red is a paid streaming subscription service exclusively for You-Tube in the United States, Australia, Mexico, and New Zealand. It provides advertising-free streaming of all videos hosted by YouTube, offline and background playback of videos on mobile devices, access to advertising-free music streaming through Google Play Music, and access to “YouTube Red Original” series and films. YouTube videos tend to be under ten minutes, instead of fitting into traditional half-hour or hour-long TV slots. Episodes are streamed ad-free and aside from a few guidelines, ultimate control is given over to the artist, including what is uploaded and when new episodes appear. The service has also participated with major networks and select YouTube celebrities to offer “YouTube Red Originals,” movies and shows to Red subscribers; however, in certain countries where subscriptions are not yet available, individual episodes and movies can be purchased through YouTube or Google Play Movies & TV.