The Number 1 Reason Netflix is A Giant Killer

Hollywood studio executives may be patting themselves on the back for Jurassic World, which had the second largest North American opening ever, just narrowly behind The Avengers, and worldwide opened with an impressive $511 million box office.

But despite this recent success, studio executives should be worried that this model of releasing films is dying.

Netflixs has just announced it’s releasing the next Brad Pitt movie in select theaters and simultaneously online.

This has, of course, angered some theatre chains because they made money off the old model, which is to wait at least 90 days before a film is released digitally or on DVD. This artificial manipulation of the marketplace used to work when consumers had no other choice, but now the digital space is competing fiercely for the same viewers, not to mention it’s becoming easier to pirate a film.

The Lessons Of History

It seems the film industry hasn’t learned from companies like Apple and Amazon which upended the music and publishing industry respectively. The battles Apple and Amazon had with industry giants mimics the battle Netflix is now having with the large theater chains.

It’s a shame that theaters are too short sighted to see technology is going to win out because it does every time.

Consumers want the product when and where they want it. If they want to go to the theaters then they can, but if they want to watch it at home with a bunch of friends, or curled up in bed on their laptop then the studios should be able to provide that experience.

Netflix is giving people the ultimate user experience and it’s putting the squeeze on the studios and theaters which refuse to give the consumer choices.

Distribution Not Product

The root of the problem is Hollywood executives don’t see this as a distribution problem, rather a product problem.

Instead of figuring out how they can deliver their films cheaper, they make their films bigger and more expensive which only serves to drive up the price or both product and distribution.

Originality Is Risky

I used to enjoy going to the movies. I went every weekend in fact. My family knows how much I love film and so then gave me a bunch of gift cards for Christmas—most of which I have yet to redeem.

Why?

I don’t care for the roboots, the remakes, or the sequels that Hollywood is constantly putting out. There hasn’t been a film I’ve been interested in seeing in a long time. I know I’m not alone.

In fact Hollywood is becoming a bloated balloon and is just waiting to pop. The film business cannot survive on remakes and sequels alone. They need fresh content but they are unwilling to invest in it because it proves to be too costly. Eventually people will become disenchanted with Marvel.

The Wrong Experiment

Disney poured a lot of money into Tomorrowland and many critics praised the studio for taking a chance, but ultimately it proved a financial failure.

You fix the distribution and you no longer have to spend hundreds of millions and at least that amount again on marketing.

The Theaters of Tomorrow

Ultimately theaters will survive because a sort portion of the population will always want that big-screen, big-sound experience, especially for action-adventure films like Jurassic Park, but soon a film’s success won’t be measured by opening weekend – which is a crazy way to measure success anyways.

There’s this independent theater in my city called the Rio; I believe it’s the only independent one left in the city. It works because they found a niche that the other theaters don’t provide. It doesn’t make its money with big blockbuster films but shows old films, some classics, some cult favourites. There are costume nights where people can dress up as their favourite characters. It caters to the very dedicated film lovers.

This is the future of theaters. The multiplexes will all shut down as films move to digital downloads. The blockbuster will still be around but not every film will have to swing for a homerun. Once again film can start producing quality instead of largeness

Joel Mark Harris is a writer, film producer and marketer. (@joelmarkharris) He is the founder of Story Laboratory which helps artists market their work. To get a free ebook on How to Make Money Blogging and a Content Marketing Tool Kit sign up HERE