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IPG Media Lab

Apple’s Big Oscar Win & Hollywood’s Anti-Streaming Bias

Why Netflix wants a Best Picture win, and how Apple got there first

Photo by Venti Views on Unsplash

At the 94th Academy Awards on Sunday, Hollywood’s yearslong journey to crown a streaming movie as the Best Picture winner came to an end. CODA, a small indie movie that Apple purchased at the 2021 Sundance FIlm Festival for 25 million dollars, beat out the presumed frontrunner The Power of the Dog, Netflix’s main Oscar contender of the year. This win makes Apple TV+ the first streaming service to win the much-coveted Oscar for Best Picture, the highest honor in the U.S. film industry that Netflix has repeatedly spent millions of campaign dollars on courting over the past few years.

Of course, most people likely won’t even remember Apple’s historical win on Sunday night, given the exhaustive hot take cycle following what went down between WIll Smith and Chris Rock. And even without that internet-breaking incident sucking up all the oxygen, the general public has shown diminishing interest in who wins Best Picture in recent years, as movies yield their center stage position in global pop culture to digital-native media like video games and TikTok videos.

This is, of course, once again reflected in the ratings of the Oscar ceremony: although it was up 58% in total viewership from last year’s dismal numbers, it still ranks the second lowest-rated Oscar telecast ever, with only around 16.6 million live viewers on average throughout the night. For comparison, the ratings for the 18 to 49 demo were down 29% compared to the 2020 Oscars, which took place just before the COVID-19 pandemic hit the U.S. The Oscar viewers are gone, and they are unlikely to come back, not just because of the general decline of live TV viewing, but also because movies, especially the type of movies that the Academy tends to reward, have stopped being something that most people care about.

That said, as an industry award voted on by the members of the Academy, the Oscars stands as a strong indicator of the sentiment of Hollywood talent. And the fact that Netflix keeps losing out the top prize despite its annual all-out campaign efforts (from Roma in 2018, to The Irshman in 2020, and The Trial of the Chicago 7 last year) is a strong indication that the so-called “anti-Netflix bias” is alive and well in Hollywood.

Hollywood’s Anti-Netflix Bias

Before we dive into this further, it is important to note that the anti-Netflix bias in question is an issue of industry sentiment, which is separate from consumer sentiment. Although Netflix has drawn some ire for repeatedly raising its subscription prices and, most recently, starting to crack down on password sharing, consumers in general have not turned on Netflix. Some would even argue that Hollywood’s anti-Netflix bias stems from Netflx’s popularity with consumers, which granted the streaming service the market power to disrupt Hollywood in the first place.

Yet, like any business issue, how your industry peers view you will have an impact on your business. Winning awards may have minimal direct impact on subscriber numbers, but they do have an outsized role in attracting and retaining top-tier talent to work for you. Plus, the bragging rights of winning Oscars are great for adding some sparkles to ad copies and marketing campaigns. For every producer and director in Tinseltown, Netflix’s inability to nab the industry’s top prize would be a matter of concern that deters some from bringing their high-profile projects to the streaming giant.

Netflix’s ever-growing catalog of original movies and TV series shows that it is in no shortage of acquiring content, but the side effect of that abundance is that most Netflix content tends to get lost in the shuffle. Sure, outputs from established auteurs are usually deemed awards-worthy and granted big budgets for marketing campaigns, but smaller films, even the critically-praised ones, often debut on streaming services without much fanfare and are immediately forgotten. Netflix’s version of blockbusters starring A-List stars — movies like Red Notice and The Adam Project — may get big viewing numbers (according to Netflix’s self-reports), but their impact on pop culture at large is practically negligible.

Perhaps it is not so much an anti-Netflix bias that Hollywood holds, but rather a broader anti-streaming sentiment that pervades the entertainment industry. While that stance may be a natural response to a disruptive challenger for the movie studios, now it just seems quaint when nearly every major Hollywood studio has launched their own streaming service. That’s why it is called a “bias” on Hollywood’s part. Nevertheless, streaming movies are still seen as “lesser-than” compared to movies that have a traditional theatrical run, like the digital equivalent of the direct-to-DVD movies, and in show business, perceptions can go a long way.

Netflix came in as an outside challenger that thinks the rules of the industry don’t apply to them (see: Netflix’s longstanding feud with the Cannes film festival), and that’s bound to ruffle some feathers. For years, lavish spendings by streaming services in original content has raced down the market and produced more content than ever. As the leading streaming service with the highest global subscriber count, Netflix naturally becomes the main target that bears the brunt of such animosity from a begrudged Hollywood.

Creative talent is to Netflix what drivers are to Uber: contract labor that fulfills the demand with which the platforms algorithmically match. And if Netflix starts losing out on top-tier talent due to reputational issues, the outcome may be akin to Uber losing drivers to rival ride-sharing services during the #DeleteUber movement in 2017. And unlike choosing a ride, name recognitions do matter in content selection.

Creative talent is to Netflix what drivers are to Uber

Moving forward, it will be interesting to see how long Netflix can keep up this costly chase of that elusive Best Picture Oscar. In terms of its bottom line, the streaming giant has no practical need for an Oscar statue, and it may very well forgo its dreams of Oscar glory and lean into blockbusters and non-scripted content to keep its subscribers happy. Still, the sunk cost fallacy exists, and it may be too late for Netflix to give up on winning a Best Picture now, if only to prove its status as the leading streaming service.

What Entertainment Brands Can Learn from Apple’s Big Win

While Apple should probably thank Netflix for acting as a shield for anti-streaming sentiment for years and allowing CODA to sneak through, the Cupertino company also has its own unique advantages to making inroads in Hollywood.

Building Bridges

Despite its brief period of contentious relationships with the music industry (primarily the record labels) over the launch of the iTunes music store in the early 2000s, Apple has always had an amicable relationship with the media industry overall. The late Steve Jobs’ connection to Disney via Pixar (of which Jobs was a founding member) has produced many delightful product collaborations over the years, and the two companies were reportedly at one time on the path to a potential merger.

While that hypothetical mega-merger never came to reality, Hollywood has never seen Apple as an intruder or a challenger, even after the launch of Apple TV+. Apple products are widely used among Hollywood people, as the Mac maker has a long tradition of making products (both hardware and software) aimed at creative professionals. It is telling that most awards screening apps would go to the length of creating a native app for Apple TV, despite it accounting for only 15% market share of the U.S. streaming devices. The anti-streaming bias was neutralized by Apple’s historical ties with, and the enduring popularity of its products within, the entertainment industry.

The anti-streaming bias was neutralized by Apple’s historical ties with the entertainment industry.

Of course, it also helps that Apple TV+ is nowhere near the domninating scale of Netflix in terms of subscribers, despite being one of the few streaming services available globally. The creators of CODA cited the near-global distribution as key to securing their deal with Apple, although even that is not without controversy and compromises (Apple ultimately did not secure the distribution rights to CODA in certain key markets like Mexico, Italy, and Japan.) Still, most content creators prefer Apple’s approach, because it means they can sell foreign rights through pre-sales but not be locked out of a better global deal later if a streamer wants it. Overall, Hollywood sees Apple as an agreeable distribution partner rather than an aggressive disruptor that seeks to take over the industry.

Quality over Quantity

Apple’s content strategy also played a big part in neutralizing Hollywood’s anti-streaming bias. The company came relatively late to the streaming wars, and it has taken a quite different approach to building out its video streaming services. Instead of buying up licensed content to boost its library, Apple decided to stick to a highly curated selection of content, usually under a family-friendly banner, like CODA or the Tom Hanks-starring Finch, but not necessarily kids-oriented content, like most Disney outputs. Apple seems to prefer prestige content without the typical sex and violence seen on other prestige content channels. Playing nice with theatrical exhibitors, Apple has also announced it will re-release CODA in over 600 U.S. theaters following the historical win.

This quality over quantity approach stands in stark contrast to Netflix’s general strategy today, which seems to be throwing everything at the audiences, and every once in a while, a show like Queen’s Gambit or Squid Game would stick and grow into a genuine phenomenon. Of course, Apple can afford to invest in only a curated selection of content instead of going after a wide array of content because the company does not necessarily need to profit off of its streaming service, which is primarily a value-add customer retention tool for its hardware business. This is a luxury that a content-only company like Netflix does not have, but one that is shared by Amazon and Disney, whose ecommerce and theme park businesses, respectively, far outpace their streaming services in their contribution to the company’s bottom line.

In this regard, Apple’s differentiated content strategy has paid off handsomely, but it is a unique result of the company’s objectives behind getting into original content that most companies cannot replicate.

Eyes on the Prize

According to the Wall Street Journal, Apple reportedly spent more than $10 million on its awards campaign for CODA, which is pocket change for a company with a $2.8 trillion valuation. Still, winning a Best Picture Oscar for a total sum of $35 million is a great deal that any Hollywood studio would gladly jump on. The halo effect of this win will no doubt help Apple attract more talent and awards-hopeful projects, and it should further boost the profile of Apple TV+ for streaming audience’s consideration.

For entertainment brands and media owners, however, Apple’s big win on Sunday does mark a new era for Hollywood. Circle back to the Uber analogy: Uber now plans to integrate yellow cabs into their services in NYC after nearly decimating the taxi industry. If Hollywood studios do not wish to find their output being merely an option among many offered by an aggregator platform, then it is time to stop hating on streaming services, and work with amicable partners to find a way forward to save movies from losing more attention and cultural cachet to video games and other forms of digital content.



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