Hollywood is Broken, Does Netflix Have the Answer?
It’s seemed to me for a long time that the model of going to the movie theatre is broken. With the advent of our DVR-infused, binge watching, watch anywhere culture — the idea of going to a theatre to watch a movie for several hours seems antiquated, it just doesn’t appeal to me, and I’m sure I’m not alone. The question at hand then is, how does Hollywood tackle adjusting its business model to fit within the current culture.
Regardless of the cultural shifts and the ability to access content from pretty much any corner of the globe, Hollywood has had a pretty tight grip on the distribution of new movies and the structure of the screening window (the system of when a movie is in theaters, available for purchase, rental, and then via cable and streaming) because there is a lot of revenue at stake. Despite that, from a consumption point of view, the current Hollywood system is broken; and I would argue that with these new technologies the reality is there is an entirely new world of revenue potential for these studios if they can find the right methodology to reach consumers.
In order for Hollywood to catch-up with these shifts the answer lies in finding a path to the revenue to supplement the traditional Box Office. To that end, earlier this week, Netflix and the Weinstein Company announced a partnership. This relationship will debut the sequel to Crouching Tiger Hidden Dragon simultaneously on both IMAX screens across the country, as well directly to the consumer via Netflix. Now, while the number of IMAX theaters is smaller than general distribution screens, this move toward same-day availability is promising, and perhaps in time will stand as a model for the industry at-large.
The current system reigns supreme because it means big dollars for the theatre chains, as well as for the studios. However, to meet the needs of today’s audiences, and those like myself who don’t necessarily feel compelled to go to the theatre, perhaps Netflix with over 50 million subscribers is on to something. With the development of a two-pronged distribution model, Netflix, the self-described “Internet television network” may help Hollywood develop an approach that can help the ailing distribution system. One thing’s for sure, the number of mobile devices and connected televisions greatly out number traditioanl theatre screens, which means virtually endless possibilities to capitalize on for the studios.