Theater Owners Are Furious About Netflix’s New Movie

TECHfullyBREWED

Publish date: Sun, 18 Oct 2015, 02:22 PM

NETFLIX HAS MORE than a few enemies. When it launched its DVD service, it threatened brick-and-mortar video rental stores. Now Blockbuster is no more. When it pushed full-force into producing its own original TV shows like House of Cards, it encroached on HBO.

Now Netflix is going into the movie business. Today it’s releasing its first major feature film, Beasts of No Nation. Naturally, this means you’ll now be able to watch the movie on Netflix. But in an interesting twist, Netflix is also releasing Beasts in theaters. Well, at least theaters whose owners aren’t too pissed off at Netflix to show it.

Earlier this year, major movie theater chains AMC, Regal, Cinemark, and Carmike told Variety they would refuse to screen Beasts, which stars Idris Elba. The outcry comes as the movie theater business faces similar pressures to those that torpedoed physical video stores—more and more viewers are shifting their entertainment habits online.

Typically, theaters enjoy at least a 90-day period between the day a film is released on the big screen and the day it reaches audiences at home (though that window is beginning to shrink). But Netflix is not a typical company.

“Netflix is not serious about a theatrical release,” says Patrick Corcoran, vice president of the National Association of Theatre Owners. “There isn’t a real commitment.”

Corcoran says that theater owners commit marketing, time, and theater space to screening movies, which leaves little incentive to show a film that people can already watch for less money at home. In fact, any marketing theaters did to help promote the movie could even lead to more people watching at home.

“It’s not equal space,” says Phil Contrino, chief analyst at BoxOffice.com. “A lot of people subscribe to Netflix and they can watch Beasts of No Nation at home. How many of those subscribers are going to go see it in theaters?”

Theater owners first heard about the company’s plans to release Beasts simultaneously in theaters and on-demand from a press release, Corcoran says. This didn’t go over well. Normally, Corcoran says, distributors will negotiate a release with theater owners ahead of a public announcement. In the case of Beasts, theater owners first heard about it when everyone else did. (Netflix did not respond to WIRED’s repeated requests for comment.)

“The purpose here is PR,” Corcoran says. “They want to qualify for an Academy Award.”

Netflix Wants to Be A Contender

Beasts, a film about a child soldier caught up in fighting in an unnamed African country’s civil war, has already received critical acclaim and attention as a potential Oscar contender. Starring Idris Elba and directed by Cary Fukunaga of True Detective fame, the film may be Netflix’s latest chance to win the most prized award in Hollywood.

And that would be huge for Netflix. Depending how you count, Beasts is Netflix’s first original feature film, though it’s far from its last. It was reportedly produced for $6 million and acquired by Netflix in March for $12 million, a hefty sum for a relatively small indie film. (For perspective, indie flick Me and Earl and the Dying Girl was reportedly offered $12 million to be acquired earlier this year at Sundance in what would have been a “blockbuster” deal, according to Deadline.)

With several popular original TV series like Orange is the New Black on its roster, Netflix is planning to release a slate of so-called original feature films for the first time, including the upcoming sequel to Crouching Tiger, Hidden Dragon and several Adam Sandler films, including the upcoming The Ridiculous 6. Netflix has also already seen award season success, notching 34 Emmy nominations for its original TV shows just this year as well as Oscar nominations for two feature-length documentaries to date.

Netflix seems to be hoping that Beasts will bring the company the kind of cachet (and potentially talent) that comes with esteemed awards. But according to Academy rules, in order to be considered for an Oscar, Beasts needs to screen in theaters on the same day or before the home release. And at least one theater chain is willing to give them an assist: you’ll be able to see Beasts in select Landmark theaters starting today.

“There have been feature films made for the home for years and people view them that way,” Corcoran says. “There’s something else about a theatrical release, the aura of it, the fact you’re going out to see it.” But having a film come out at the same time on the Internet kills some of that aura.

Any movie release gambit that depends on theater owners going against their vested interests by showing a film the same day it comes out online is unlikely to succeed, at least commercially, says Paul Dergarabedian, senior media analyst for Rentrak.

“The Netflix model for theatrical releases can only work on a large scale on the theater level if the large chain exhibitors chose to go along with the plan,” he adds.

But clearly that’s not very important to Netflix, whose business after all is all about giving consumers what they want on Netflix.

“Netflix says, ‘This is about consumer choice,’” says Corcoran. “Well why aren’t they then available on DVD, Blu-ray, pay-per-view? It’s exclusive in the home to Netflix, because exclusivity is important.” Theater owners get it. As with Netflix, exclusivity is how movie theaters make their money, too.

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