Why Streaming is Killing the Video (and Movie) Star
The days of watching a primetime television show on a television set have become increasingly outdated.
The days of watching a primetime television show on a television set have become increasingly outdated in recent years due to the advent of streaming players like Netflix and Amazon.
Netflix blazed this trail in 2011 when it lured A-list movie star Kevin Spacey to its Netflix-only series “House of Cards”. Four seasons and over 30 primetime nominations later for “House of Cards”, the proverbial floodgates have opened for Netflix as subsequent series like “Orange is the New Black”, “Stranger Things”, “Luke Cage”. “Gilmore Girls: A Year in The Life” and most recently “Iron Fist” are finding favor with consumers in droves. Amazon Video has enjoyed a similar wave of success with shows like “Transparent”.
This phenomenon has expanded beyond TV, with Netflix and Amazon recently making an aggressive push with film investments and attracting some serious A-list movie star interest.
Netflix has had notable success of late luring movie stars like Brad Pitt (for satirical comedy “War Machine”), Will Smith (supernatural cop movie “Bright” budgeted at a mere $90 million) and Adam Sandler (Netflix recently committed to finance and develop four more films with the actor). More recently, press reports have suggested that Netflix acquired Martin Scorsese’s film ‘The Irishman’ which reunites the director with star power Robert DeNiro, Joe Pesci and Harvey Keitel along with Al Pacino. Netflix also announced in March 2017 that it had hired film industry veteran Scott Stuber to lead its original film initiative — a clear sign that Netflix’s film ambitions are getting more serious. Stuber was formerly the Vice Chairman of worldwide production at Universal Studios.
Netflix and Amazon have also been active at Sundance and Cannes over the past two years, aggressively acquiring independent films and documentaries. Amazon garnered significant success with its acquisition of “Manchester by the Sea”, purchasing it for just $10 million at Sundance, Amazon then distributed the film via the traditional release window to earn over $70 million in the box office, with Casey Affleck scoring a Best Actor Oscar for his role.
This may explain yet another driver for why film studios are interested in offering movies sooner than the typical three-month window to streaming video on demand (SVOD) as studios will soon be competing with streaming service providers with big name stars that can release a movie in theaters and direct to consumers (DTC) simultaneously. In late 2016, Netflix inked a deal with luxury-theater chain operator iPic Entertainment through which Netflix will release 10 of its films to iPic’s 15 locations across the U.S. Netflix is undertaking limited theater launches as it must do so to qualify for Oscar consideration. In contrast to Amazon, Netflix seems to be favoring a simultaneous digital and limited theater release for some of its feature film fare.
Streaming players could find increasing favor with consumers with their foray into the movie business. Consumers may be drawn by the allure of shedding the expensive movie theater experience (these movie offerings from Netflix and Amazon are included at no additional charge with the OTT monthly subscription fee) and no waiting on excessively long lines to get into a movie theater. Most importantly, potentially may be the elimination of the wait to watch a movie from the comfort of your own home.
Investments from the likes of Netflix and Amazon come as welcome cash infusion in the film industry at a time when it is increasingly difficult to attract viewers to movie theaters and drive home entertainment revenues. However, as films move to streaming, simultaneous release and/or possibly faster digital distribution windows the lines between film and television product offerings are becoming less and less distinct — potentially further pressuring the business model for both film studios and theater exhibition operators going forward.
In any event, Netflix and Amazon are charting a path to disrupt the movie industry that could have a lasting impact on consumer viewing habits in the same way that streaming has impacted the linear television landscape.
Traditional TV Now Mimicking Streaming Model
In fact, streaming media has changed viewers’ preferences on how and when they consume media so much so that traditional media networks are too changing both the way they deliver content and how they deliver it.
There are also signs emerging that binge-watching is not just for streaming networks anymore. A notable example is ABC Television Group’s FreeForm (formerly known as ABC Family). FreeForm launched a new show, ‘Beyond’, in January 2017 where customers with a multichannel video programming distributor (MVPD) subscription could log onto the OTT Freeform app and view all the episodes in one sitting. Beyond reached 13 million viewers across Freeform’s digital platforms, with 87% of binge watchers finishing the series in the first week. The success of this application of streaming and binge viewing resulted in the FreeForm network’s plans to release future series in the same “binge from the start” fashion. The next new series “Famous in Love” is set to premiere in April, when all episodes will become available on digital platforms.
CBS has started to launch original content DTC on its OTT CBS-All-Access platform with notable titles including ‘The Good Fight’, a spin-off of ‘The Good Wife’ and the soon to be released ‘Star Trek: Discovery’. Finally, BBC has become the first major linear network to announce plans to go binge-first with new seasons via streaming.
For traditional content providers to stay relevant, they will need to evolve to meet the ever-changing media ecosystem where consumers are becoming increasingly primed to receive content on demand when and where they want it.