Netflix

Each year, from the beginning of May until the end of August, I write something called the Studio Series. It runs every Wednesday, and is a bit of a deep dive into each of the major film distributors, from studios to indies, including the streaming services, since they’re making as many movies as anyone these days, if not more. On August 23, I covered Netflix and talked about its business model, discussing the fact that one of the leading purveyors of television is trying to become so on the film side, but hasn’t quite broken through yet. One of the ways the streaming service was hoping to do so by the end of 2017 was to release Bright around Christmas, thus creating the exact kind of public conversation that few, if any, of its films have done so far.

Mission accomplished, though not in the way Netflix had probably intended. With the notable exception of Variety, major critics have almost universally eviscerated the movie, with some (like IndieWire’s David Ehrlich) going so far as to call it the worst film of the year. But rather than stay away in droves, as people might had Bright been playing in theaters, they instead dialed it up aplenty from their couches and easy chairs, perhaps out of morbid curiosity. According to Nielsen, at least 11 million people in the U.S. alone watched it over its first three days of release, and that’s just via television sets — not computers or phones. That’s an impressive number no matter how you slice it.

Of course, this led to speculation about what kind of opening weekend the movie would have had if it opened in theaters (something like $100 million, which would be great considering the film’s $90 million price tag), but obviously it’s not that simple, because screening a movie from the comfort of your couch is a lot easier than trekking to the theater and then plunking down more money for tickets and sodas and snacks. But if even half of those 11 million people saw Bright in the theater, that would still be a solid opening, especially since that $90 million includes all residuals and backend for the major players (stars Will Smith and Joel Edgerton, director David Ayer, writer Max Landis, and so on), which means that the road to profitability would be shorter than your normal flick.

So, clearly, it was a no-brainer for Netflix to greenlight a sequel, with everyone who survived the movie coming back for more except, apparently, Landis, with scripting duties now falling to Ayer. However, in doing so, the company has started down the road to becoming exactly the thing it claims not to be. Once positioned as an alternative, Netflix is fast becoming the establishment. We all know the business model — subscriptions only, nothing released except on the service — but this is the first time that the company is developing a sequel to one of its film properties, which suddenly takes it out of the esoteric movie business and into Studio Territory.

I’ve been saying for a while now that Bright is exactly the kind of movie Netflix should be making (and Amazon, too, for that matter), because that’s how they’re ultimately going to compete with the studios in the long run, especially since there is a natural endpoint for the Netflix revenue stream. I mean, there are only so many people in the world, and only so many of them actually pay for their Netflix subscriptions (think of how many people are sharing passwords), and in the not-too-distant future, that saturation point is going to be reached. That’s why the Bright sequel makes so much sense, and is the first step towards the inevitable — Netflix coming to some kind of compromise with the National Association of Theater Owners (NATO) and, I think sooner than later, releasing at least some of their movies into theaters nationwide.

Netflix

Now, it’s true that Netflix has a deal with iPic theaters in New York and LA to have limited distribution for some of its films so as to qualify for Oscar consideration (Mudbound seems to have most benefited from this, or at least, Mary J. Blige’s chances for a Best Supporting Actress nomination have), but that’s hardly a nationwide opportunity to catch the company’s fare on the big screen.

As many new subscribers might have signed up for Netflix to catch the spectacular train wreck that is Bright (Six Word Review: What a bizarre, absurd, fabulous mess), and who might now stick around and become paying customers (simple math: one million new subscribers = $144 million in annual fees), more money would be made by putting said sequel into theaters either as part of a day-and-date release, or by giving the theaters a head start of, say, three weeks, before premiering on the service. That shortens the normal window of three or four months, and would serve as a fair compromise once Netflix and NATO eventually find themselves at the bargaining table.

I say eventually, because it behooves both of them to strike an agreement. I know that this goes against everything that Netflix claims is important to its business model, but CEO Reed Hastings and film division topper Ted Sarandos seem too smart to cling to a failing concept rather than adapt and survive in an increasingly hostile marketplace. Diversification here is key, something any good businessperson would know, and the Netflix guys certainly fall into that category, which, again, means that this move is inevitable. There is literally no good reason not to do it. Likewise, as NATO sees ticket sales falter from one year to the next, it’s going to have to back off its anti-Netflix stance, and accept the fact that everyone is going to survive a lot longer if they work together, rather than at cross purposes.

Along with Bright and its eventual sequel, last summer’s Brad Pitt vehicle War Machine and last fall’s Adam Sandler-Ben Stiller comedy The Meyerowitz Stories (New and Selected) are perfect examples of what should be the new normal at Netflix, because they are not only the kinds of movies the studios are making, they’re also the kinds of movies the studios have stopped making. The best way to compete with the studios (especially now that one of them has purchased another, and two more are badly suffering), is to hit them where they live by not only playing their game, but also by playing a game they no longer have any interest in playing, regardless of the demand. Amazon gets this, which is why they’ve decided to start distributing their own movies. Now, for the first time, I’m starting to think Netflix does, too.

Neil Turitz is a filmmaker and journalist who has spent close to two decades working in and writing about Hollywood. Feel free to send him a tweet at @neilturitz. He’ll more than likely respond.