Impressive results for Netflix in the Oscar nominations with its first ever Best Picture nomination for Roma which picked up 10 in all including in the directing, lead actress and screenplay categories. Are we finally seeing the first new rival to the Hollywood studio establishment since Disney’s first feature film, Snow White, debuted in 1937?
It’s only five years since Netflix gained its first Oscar nomination for anything for the documentary The Square in 2014 and the company only began its aggressive move into original production in 2011 when it began acquiring rights for its own original content so these nominations mark an impressive achievement.
The current crop of major Hollywood studios has remained remarkably stable since the Second World War. Occasional mergers (eg MGM and UA, most recently Disney and 20th Century Fox) and multiple changes of ownerships haven’t changed their ranks much. Many have tried, and many independent upstarts have enjoyed runs of successful films, but no one has ever truly managed to disrupt the old order. The only way in for newcomers in the long run has been to buy one of the existing players.
In the end, the attempts at joining the top ranks, from PolyGram to DreamWorks, Orion to New Line, have not succeeded. Like owning a yacht, making films is a very very expensive business. Sustained commercial success comes from the combination of four elements: a broad production slate of films to ensure there are enough hits to pay for the inevitable flops; control of distribution across platforms so that the studio gets as much of the upside of those hits as possible; a global network so they keep as much international revenue from those hits as they can and aren’t forced to sell off too many rights to raise money for these very expensive films; and fourthly a catalogue of older titles that can be relied on to keep earning if the flops exceed the hits at any time. Those who have fallen by the wayside have always done so because of weakness in one or more of those strands.
Now Netflix are standing tall as the latest challenger to the old order. Will they succeed where others have not? Well look at the four strands for success: firstly they certainly have a very broad production slate, they are definitely not putting all their hopes in a succession of one off projects. If anything some worry that their slate is too large and they’re spending too much, but for now, they have a broad enough portfolio of product to ensure they are finding hits.
Secondly, on distribution, Netflix have complete control which is unlike any other previous contender. You have to go back to the golden age of Hollywood pre-World War Two find such a seamless integration production and distribution. Netflix are currently missing out on cinema, TV and potentially other revenue streams, but the Netflix platform is so massive and still growing so strongly that that does’t seem to be any damaging loss.
Thirdly Netflix are now very global in their production and distribution, probably more international production-wise than anyone else, and on the fourth point, catalogue, Netflix clearly have fewer rights and space on their platform for other people’s catalogue. But there’s still enough there and their own catalogue is growing so fast that again this hasn’t hurt them so far. However their rivals are hoping that increasingly keeping their own content on their own proprietary platforms will cause Netflix to if not fall at least stumble a bit. We’ll see.
So the picture for Netflix is certainly more positive than any other contender to date - they have a broad slate, their own distribution and are keeping most if not all international rights wherever possible. It’s too early to say if they will become the first new force Hollywood with true staying power, or whether the gaps in off-platform revenues and classic catalogue will eat into their momentum over time. But for now, they have the wind behind their sails. Advantage Netflix.