Netflix dips its toe into theatres – but it doesn’t want you to know
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

Netflix dips its toe into theatres – but it doesn’t want you to know

Streaming video on demand (SVOD) giant Netflix thinks it might be in for an Oscar this year. If it’s right, then it will continue a trend towards the big-budget pictures of the streaming world colonising award shows previously dominated by traditional programmers. But the Oscars aren’t just one more award show – they come with certain stipulations. And, for the first time ever, Netflix is abiding by them: the company’s new title Roma was shown in theatres last week – before debuting on Netflix’s own streaming platform.

Netflix’s share price has appreciated by 13% over the last five days!

 graph 04 netflix

Source: Yahoo Finance

Putting movies in theatres before putting them online is anathema to Netflix – it’s literally the ‘traditional model’ that Netflix was created to disrupt. But the company is not naïve when it comes to the movie-making business: receiving the cinematic world’s biggest plaudits will be yet another convincing factor when it comes to persuading top writers, actors, and directors, to jump ship and commit to the company.

If you weren’t aware that Netflix had shown Roma – a family drama set in New Mexico – in theatres, don’t be surprised. The company has been keeping it on the downlow, even asking Comscore Inc. (the company that monitors box office data) to ignore the film. Paul Dergarabedian, a senior media analyst at Comscore, said: “Netflix has made the decision to not participate in the sharing of their theatrical box-office data. Comscore will, of course, abide by their wishes.”

That’s unusual. Most of the time, studios want the data made as public as possible to increase hype around a movie. But Netflix has never played by those rules, and doesn’t release viewership numbers for any of its shows.

While that’s unusual, it gives Netflix greater latitude to make bold creative choices. Cancelling shows with healthy viewership numbers likely wouldn’t impress investors (many of the recently cancelled Marvel series would almost certainly fit this bill). Nor would renewing highly acclaimed, but probably not commercially viable, series that have been cancelled elsewhere (smart comedy Arrested Development is a great example).

Netflix execs are capable of taking a longer and more specialised view. In the case of Arrested Development, for example, allocating some of the company’s huge content budget to reviving it resulted in three important facts. First, the company will have added almost every member of the show’s viewership to its subscriber network. Second, it will have received critical acclaim – important for drawing in top talent. And third, it will have been in a position to forge new relationships with the talent involved in the show (including at least two Hollywood A-listers and an acclaimed writer).

Anyway, Netflix is quite sensibly keeping a lot of info to itself. But the signs are clear – it’s embracing more and more of the world beyond its own streaming service. For subscribers and subscriber growth, that’s probably a good thing.

Disclosure
Dominion holds Netflix in its Global Trends Ecommerce Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.