Is Netflix Undermining Cinema?

by Edouard Roux

This year’s Cannes film festival is once more the centre of an ongoing battle between SVoD (subscription video on demand) provider Netflix and the organisers of the event.

The conflict began during last year’s festival; two Netflix-produced movies (Okja and The Meyerowtiz Stories) that were in competition to win the Palme d’Or were not shown in cinemas, as the platform refused to change its SVoD economic model.

Fact Box (2)

Now, at the 71st festival,  Director Thierry Fremaux has decided to withdraw the two Netflix movies (Roma and Hold the Dark) from the competition.

The decision has stirred criticism from the video platform, with Netflix’s CEO Reed Hastings claiming:  “The establishment is closing ranks against us.” In an interview with Variety, Netflix’s chief content officer Ted Sarandos said: “We want our films to be on fair ground with every other filmmaker.”

Netflix has since decided to boycott the festival.

Netflix_Cannes - Edourd Roux
Jeremy Saulnier and Alfonso Cuarón (by Nicolas Genin and Gage Skidmore /  Wikimedia Commons)

In order for films to be selected for festivals, they must be released in theatres. Cannes is about being shown publicly, not online streaming, even if the two are not inherently incompatible. With Netflix, the rise of new distribution models has become an important debate in the film industry.

“The actual distribution process is obsolete and outdated,” explains Theo Veremis, Broadcast Sales Executive for Scripps Networks International, with a background in independent movies. He said the main issue is that content is increasingly consumed online, rather than in theatres.

Netflix does not have a specific geographical zone and distributes movies using the OTT (over-the-top) model, based on delivering content directly to the consumer and bypassing cable television services. In some cases, local film distributors can be forced out by streaming platforms.

Looking at this year’s Cannes selection, Alfonso Cuaron’s Roma – signaling his big return to independent cinema – was cut short because of the row. The Mexican filmmaker, known for his Academy Award-winning film Gravity, will therefore no longer be part of the competition.

Theo Veremis explains: “SVoD and AVoD (Advertising Video on Demand) are driving market revenue growth.” For the sales executive, it is important to rethink how distribution works and not demonise Netflix for acquiring movie rights.

Preferring to focus on its original strategy, the platform’s interest in buying movies is waning, resulting in the production of series such as Narcos or Stranger Things, for example.

Fact Box

Unfortunately for Netflix, it is impossible to bypass theatrical release, as it is an essential component of movie marketing. Theatrical release is also essential for the movie ’s long-term market worth.

Figures in the British film industry recently criticised the unequal theatrical window gap with the US and the need to safeguard independent films.

VOD platforms such as MUBI, which gives subscribers a selection of 30 independent films for £5.99 a month, help sustain an ‘indie SVoD’ audience. Partnered with the prestigious Criterion Collection, MUBI has eight million subscribers including a large UK audience.

Original strategy means a shift away from exclusive acquisition

The ‘theatrical window’, or the period of time between theatrical and SVoD release, normally takes months.

To get a new film on DVD, UK viewers must wait 17 weeks, compared to 12 weeks in the US. In countries like France, the theatrical window is 36 months, whereas in Italy it is 120 days.

The French Minister of Culture François Nyssen recently announced that the current government will try to decrease this period to 34 months.

Theatrical windows are part of a legislative framework that protects film production and ensures a strong film-financing system, backed by public television investment and tax levies on box offices. Moving forward will mean revising this legal system.

This delay in European countries is mainly due to logistical constraints, which make distribution obsolete. Veremis added: “We need to protect investors and creators. We should not discourage Amazon or Netflix from investing.”

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