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Distribution

A look through Netflix’s windowing strategy

Is Netflix really disrupting the film distribution model? Vuguru's Larry Tanz and entertainment lawyers David B. Stern and Uri Fleming weigh in.
October 15, 2014

Ted SarandosIn an address to MICPOM delegates in Cannes on Tuesday, Netflix chief content officer Ted Sarandos told industry executives, “I don’t want to kill windowing. I want to restore choice and option.”

But many are thinking otherwise in the wake of Netflix’s recent deals to premiere the Crouching Tiger Hidden Dragon sequel on the streaming platform day-and-date with its debut on IMAX screens, and its pact to be the exclusive global distributor of 4 films from Adam Sandler.

Big theater chains including AMC, Cinemark, Carmike and Regal have said they won’t screen any day-date streaming releases in their Imax theaters.

If exhibitors follow through on this threat in the coming years, it could have a ripple effect on the fall films released in the heart of awards season, according to entertainment attorney David B. Stern, a partner at Jeffer Mangels Butler & Mitchell.

“To the extent that the big exhibitors refuse to book those films on a day-and-date basis, that will be a boon to the more independent cinema chains, like the Landmarks,” says Stern, who has done stints at Fox and Showtime. “In time, I think the big exhibitors will have to get on the ball, because they won’t want to lose some of those pictures that will drive the non-summer box office.”

Another angle to consider is Netflix’s own awards season ambitions. At this year’s Emmys, the streaming giant scored 7 wins from 31 nominations. If Sarandos expects to have a regular spot on the Oscar red carpet alongside Crouching Tiger production partner Harvey Weinstein, Netflix productions will need to have week-long theatrical runs in theaters in Los Angeles and New York, as per Academy rules. There are no plans to take Sandler’s films to theaters — and little chance of awards if they do — but it could become a concern if they cut deals for more Oscar-friendly fare.

“If it’s a small indie, (Netflix) might do a qualifying run with very limited P&A and still advertise it as available only on Netflix, or as premiering on the same day as Netflix,” says Uri Fleming, an entertainment attorney with Kleinberg Lange Cuddy & Carlo who’s worked on multi-platform deals for Chernin Entertainment and Content & Co. “Because what they’re essentially trying to do is follow the cable model and create original content that makes their subscription a must-have.”

Larry Tanz, CEO of multi-platform studio Vuguru, points out that this exhibitor outrage scenario played out on a smaller scale in 2006 with the Steven Soderbergh film Bubble. When Mark Cuban announced that his company 2929 Entertainment would be distributing the film simultaneously on DVD and in theaters, as well as giving it 2 showings on his cable channel HDNet Movies, it was boycotted by many of the country’s largest theater chains.

Seeing as how Bubble didn’t cause the sky to fall on the movie theater business, “exhibitors might look at (the Crouching Tiger sequel) and say, ‘This is one film. It’s not going to change our entire outlook on the future,'” Tanz says. But, then again, “when I started with Vuguru 5 years ago, all the talent and producers would say, ‘I don’t care how well all this stuff works. I’ll never watch a movie on my computer. I’ll never curl up in bed with a laptop and watch The Sopranos.’ Then the iPad came out, and no one ever said that again.”

Photo credit: Rico Torres for Netflix

About The Author
Todd is StreamDaily's U.S. West Coast Correspondent. He has written for a wide range of publications, including The Hollywood Reporter, Variety, the Los Angeles Times, the New York Post, NylonGuys and, yes, even the Weekly World News. Earlier in his career, he served as senior editor for the pioneering alternative movie magazine Film Threat. You can reach him at toddrlongwell[at]gmail.com or on twitter @toddlongwell1

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