Is the Small Screen a Director’s New Gold Mine?

How Streaming Services like Netflix and Hulu are Reviving the Opportunity for Creatives By Eliminating Box Office Pressures

Anyone who has stepped foot in Los Angeles during the last few years can sense a change in the air. The entertainment industry has shifted and those who dreamt of stardom on the silver screen have realigned their vision to include a smaller screen with more available scale. Now, more than ever, directors have a myriad of mediums at their fingertips — and streaming services have redefined the distribution economy, especially for original content and documentary work.

Director Oliver Stone.

A quick look at the stats and it’s obvious why doc and independent filmmakers are drawn to the security of the streaming business model. From 2015 to 2016 film box office sales dropped by over $36 million and now mid-way through 2017 sales are more than $450 million lower than they were last year. These statistics show why films with a low production budgets and high revenue payouts such as “Paranormal Activity” and “Magic Mike” are becoming anomalies.

And Netflix, Amazon and Hulu are turning those economics upside down by removing pressures on theatrical box office performance. By offering above-market upfront payouts, these streaming services are giving artists the stability to create content with confidence and hope for reaching a large and broad audience. Of course, the flip side to this is that filmmakers risk a much more lucrative payout on the backend if the film is an exceedingly rare box office hit.

While discussing her latest documentary hit “Casting JonBenet” on The Business with Kim Masters, director Kitty Green discussed why she chose a Netflix release over that of a larger theatre after Sundance.

“Maybe it’s my generation. I watch everything on little screens, so I’m not one of those people who thinks it needs to be in a theatre,” said Green, “I’m more excited about the reach it will have with Netflix, people watch documentaries on Netflix.”

Following “Casting JonBenet”,Netflix has also released Spike Lee’s “Rodney King” and “Get Me Roger Stone”. Netflix isn’t the only company pursuing documentary focused features. Hulu has released two original documentaries after their successful festival runs:“Becoming Bond” and “Dumb: The Story of Big Brother Magazine” are enjoying a Hulu-wide release just within the last two months.

And the trend expands out of theatrical and into network television as well. Over the last few years, with cord cutting rates climbing, Hollywood’s most cherished networks have felt the heat from major streaming services over the past several years. The number of paid television households in the United States is set to hit an all-time low at 95 million by 2020. This is happening concurrently with online streaming services such as Netflix, Hulu and Amazon Prime membership expected to increase over the next few months. Netflix is expecting 128 million viewers by the end of 2017. Amazon Prime’s membership is expecting 85.3 million viewers compared to their previous 58 million at the end of their 2016 Q1. And Hulu is making slow but steady progress with 35.8 million. Several mainstream network channels have jumped onboard the streaming trend as seen with HBO-Go and Sling. However, the numbers suggest television based companies are losing when it comes to original content.

In 2017 alone, Netflix will release 1,000 hours of original programming, spending $6 billion. Amazon Prime is attempting to rival it, spending $4.5 billion and tripling its programming. Even Youtube, the dominating streaming service with 186 million users is securing a spot in this new age of media with Youtube Red which is promising over 40 new originals shows in its first year alone. In comparison, HBO spent around $2 billion in 2016 and according to Time Warner CEO Jeff Bewkes, the 2017 budget would only see a slight rise. This cutthroat competition is old hat for those on the television front, but now streaming services are becoming the number one public release choice for creatives.

One can only hope that with the endless choices given to a viewer on any given day, companies will begin to strive for quality over quantity. But even while audiences wait for that time to arrive, there is no doubt that renowned directors will be finding themselves at home in the streaming universe very, very soon.