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How netflix attacks the movie industry

After television series and documentaries, the video-on-demand giant is attacking the cinema. Netflix will produce and broadcast seven films by the first quarter of 2016, some of which will be released the same day at the cinema and on its platform. The approach is part of the strategy to produce ever more original content to enhance the service. Above all, it could start the “disruption” of the film industry by challenging the traditional broadcasting model of films. Netflix is an ogre whose appetite is never satiated. After successfully investing the ground of the television series with original productions like Orange is the new black or House of cards , then that of the documentary ( What happened, Nina Simone? ), The leader of the video on demand on Subscription (SVoD) now attacks the cinema.To mark its entry into the seventh art, the streaming giant has announced the release date of seven films. As for his television series, which compete with the most ambitious productions of traditional channels, Netflix feeds no complex and has managed to convince esteemed directors and actors known to go directly through the box streaming.

Brad Pitt, Adam Sandler and Cary Fukunaga

Thus, on October 16, Netflix will launch simultaneously in some cinemas in the United States and on its own platform the film Beasts of Nation , Cary Fukunaga. Adapted from a Nigerian novel, the work follows a kid-soldier kidnapped from his family to fight in a civil war. Beasts of Nation will have the daunting task of building the respectability of Netflix as a movie producer. The stature of Cary Fukunaga, winner of an Emmy Award last year for the HBO True Detective series , acclaimed by critics and moviegoers, is a pretty catch for Netflix.

To capitalize on the success of actor Adam Sandler, whose films are among the most watched on its platform, Netflix will broadcast December 11 The Ridiculous Six , the first in a series of four films with the star actor. In the first quarter of 2016, the film Tiger et Dragon will follow , again with Michelle Yeoh in the title role, and a remake of Tim Burton’s Pee-wee’s Big Holiday movie in March 2016.

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Finally, and not least, Netflix has spent 27 million euros to produce and broadcast War Machine , an ambitious project with Brad Pitt in the title role. As for Beasts of Nation, War Machine will also be broadcast in some theaters, which will allow it to compete at awards ceremonies like the Oscars and Golden Globes …

The strategy of the original content

This notable entry by Netflix into film production is part of a branding strategy that focuses on original content. Unlike most other subscription video-on-demand services, which rely on the richness of their catalog, Netflix differentiates itself by offering programs that can not be seen elsewhere. And that sometimes trigger the act of subscription or, at least, the fact that users maintain it.

The service, which has 62 million subscribers worldwide, invests more and more each year in original content (+ 30% in 2014 compared to 2013). A paying strategy according to analysts. In the first quarter of 2015, Netflix gained 2.28 million new users in the United States, much of it thanks to the presence of original content, which can also weigh in the balance when choosing a video-on-demand platform . This strategy is the mainstay of Netflix’s success according to Rich Greenfield, an analyst at BTIG Research:

“Netflix is ​​investing in content that users clearly want to see, and it will continue to produce original content to build its brand and reduce its reliance on broadcast rights”,” Bloomberg told Bloomberg in April.

Towards a questioning of the traditional diffusion of films?

Even if it concerns, for the moment, a very small number of films, the announcement of Netflix contributes to question the traditional model of diffusion, which wants a film to be diffused first at the cinema, then on d other media after 90 days in the United States and 10 to 12 months in France.

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By producing his own films and distributing them in a number – unknown for the time but very small – of theaters at the same time as on his own platform, Netflix has found a way to get rid of traditional broadcasters, and therefore the 90-day rule.

Unsurprisingly, this does not please the film industry, which is already suffering from a decline in ticket sales, piracy competition and declining revenues from DVDs and Blu-Rays, partly related to the boom On-demand video platforms. Although Netflix’s initiative represents a drop in the ocean of film production, it does however make the cinema sector not immune to a disruption of usage.

And for good reason: watching a movie at home in excellent conditions has never been easier. Not only are high-tech tools becoming more accessible to the wallet, but the technical quality of TVs and computers, not to mention video projectors, has improved dramatically. If successful, the perception that a good movie is necessarily discovered in the cinema could evolve. Why not discover movies of “cinema quality” directly on the sofa?

Paramount reverses media chronology

Netflix is ​​not alone in attacking the traditional broadcast model of movies. In the United States, where the broadcasting system is more flexible than in France, isolated initiatives to release a film simultaneously in cinema and in VOD are practiced more and more often. But this Thursday, Paramount Pictures studio kicked the anthill by announcing an unprecedented partnership with the download services of the AMC group and Cineplex in Canada, two big cinematographers.

The studio will this winter test a new form of media chronology with two of his films: the latest installment of the franchise Paranormal Activity , very popular with young audiences, and the fantasy film Scout’s Guide to the Zombie Apocalypse . These films will be released in October but will be available for download only two weeks after their passage in theaters. Which means that Paranormal Activity , for example, could still be shown in theaters when it comes to the Internet.

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The initiative, isolated here again, represents a test whose consequences will be carefully studied. Because the idea is also to cut the grass under the feet of those who would be tempted by piracy. It reveals especially the beginning of a change of state of mind in Hollywood. Clearly, Paramount considers that retaining some movies for 90 days does not make sense anymore.

And in France ?

The films produced and broadcast by Netflix will be available in the 90 countries that offer the service, including France. In France, the financing of cinema depends largely on television channels, and the chronology of the media is even more rigorous than in the United States. Thus, a film can not land on television or on a streaming service until 10 to 12 months after its release in theaters. In this context of cultural exception fiercely defended by the actors of the cinema, initiatives like those of Paramount and Netflix seem highly improbable.

On the other hand, the Netflix model is interesting for some independent producers, like Stéphane Guénin, the president of the French Association of Film and Audiovisual Program Producers (AFPF):

“For some low-budget films that do not have a TV channel in their funding, the Netflix model could be a good way to access the audience.” “If Netflix is ​​involved in both film and television the same energy to develop a new model of diffusion of the films, that can be very positive for the small films, even if it does not like the big producers attached to the French cultural exception “.

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