Legacy Studios are in the boutique business. And Netflix is in the big box business.

There are benefits and limitations involved with both models of the business.

But let’s not put the cart before the horse.

On Sunday, Nicole Sperling wrote about Netflix, Netflix’s New Film Strategy: More About the Audience, Less About Auteurs. Standard issue quality reported story with no one officially going on the record and every positioning themselves off the record.

The central thesis is one of the the most often uttered lines of deeply comic Hollywood absurdity in the last 60 years of motion picture history. “Let’s make better movies for less money that are more popular!”

It is not as often said as, “The check is in the mail” or “No… we really aren’t in profit, even though we have grossed 5x the cost of the movie and marketing,” but it’s a major player.

But I didn’t take a break from my 3 episode CinemaCon opus to just mock Dan Lin and Bela Bajaria… and Ted Sarandos, who is at the core of the failure of Netflix as a movie business, but somehow, someway, manages to go unnamed in this article about Netflix and their “movie” business. Nicole Sperling is a pro, but that is some straight-up bullshit.

What I felt demanded a newsletter piece is how all of this fits into the big picture of how the movie industry works (and often doesn’t).

Netflix is a company that has made 2 giant leaps into the future before the future was 100% clear. First, with subscription DVD rentals, which brilliantly understood that 3 movies a week was more than enough to fulfill the Home Entertainment needs of most people. After 15+ years of Blockbuster Video, the urge to have all those shelves of titles we never rented was played out, DVD sell-thru became price competitive with a rental and a 2-day late charge, and Netflix masterfully filled the void before people realized it was a void.

Then, as the company maxed out on DVD delivery and faced real problems with international expansion and a more chaotic set of worldwide mailing systems - with a market cap that was considered terrific, but still under $50 billion - they figured out the next step. (Reed Hastings will tell you it was always his vision… sigh…) Streaming!

Hulu existed… but that was a TV rerun thing. Netflix was a movie delivery thing… until it also became a TV thing… and soon thereafter, an original content thing.

Hooray! Success! Insane Success!

The complications that all of the Legacy companies are wrestling with right now and ovet the last 4 years kept them from competing as Netflix stormed the beach. Yes, some of them said stupid things about the future never coming while they were waiting. But the core reason not to chase that streaming success Netflix was having right before their eyes was that it was (and is) dangerous. Netflix hit $50b in market cap in 2015… $100 billion in 2018, $200 billion in 2020, and is back up over $280 billion today.

One key was doing what no one ever did before what no one will ever do again - until someone insane comes along and is truly desperate - which is spend more on content than they could earn… until a few years ago, really forced into “the choice” by COVID.

Oh… the Legacy companies were finally forced into the Streaming field 4 years and change ago… and most of them believed the Wall Street-focused idiots who screamed endlessly that the only way to compete was to spend like Netflix. Worse, most of these companies were so excited by the opportunity to have Wall St love them like it loves Netflix, that they overemphasized Streaming as part of their portfolios to their detriment… and Wall St only loves Netflix like it loves Netflix. There were a few hot moments, but they were illusions.

So what about Netflix movies?

With all love to the good people of Netflix who really, really want to believe otherwise… Netflix doesn’t make movies. They make TV movies. Netflix is the greatest TV network ever created. Massive amounts of content, original and licensed, on-demand, with as much nudity and cursing as you might light just short of hardcore porn, with no commercials… all for $10 a month.

Netflix has a symbiotic relationship with Wall Street. It started by being “a tech stock,” which it is not and really, never was. Netflix used technology brilliantly and before the mainstream of this industry. But they were never really in the tech business. Still, Wall Street held and holds them there. As long as they could maintain the image of being a fast-growth company, Wall Street would keep overpaying massively for the stock, excited about the future. This was an advantage no Legacy company has or has had for more than a few months at different pressure points.

Meanwhile, the media fell in love with the story of the end of Linear Television, which was and continues to be insanely overstated. A 30% to 40% slice lost by any segment of any industry is very, very important. But the dirty secret that none of the media seems to want to acknowledge is that for Legacy companies, Linear Television is still the most profitable segment of half of these companies and #2 to very strong non-content businesses for the other half.

Sorry… getting to the movies…

When you are spending upwards of $15 billion a year on content - which is double what any other company had ever spent on content before Netflix, even with sports rights and other high ticket price items, like $300 million Marvel and Star Wars movies and Sunday Night Football - dropping a couple hundred million on a movie that is never going to generate a dollar directly from sales of any kind doesn’t seem like that bad an idea. Make the biggest action films. Give the greatest filmmakers the kind of budgets they have never seen and will never see again.

Like Charles Foster Kane said, “You're right, I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars next year. You know, Mr. Thatcher, at the rate of a million dollars a year, I'll have to close this place in... 60 years.”

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2023 Oscars Nominations: See the Full List

Jan 24, 2023

Best Picture

All Quiet on the Western Front (Netflix)

Avatar: The Way of Water (20th Century Studios)

The Banshees of Inisherin (Searchlight Pictures)

Elvis (Warner Bros)

Everything Everywhere All at Once (A24)

The Fabelmans (Universal Pictures)

Tár (Focus Features)

Top Gun: Maverick (Paramount Pictures)

Triangle of Sadness (NEON)

Women Talking (United Artists Releasing/Orion Pictures)

Actor in a Leading Role

Austin Butler in Elvis

Colin Farrell in The Banshees of Inisherin

Brendan Fraser in The Whale

Paul Mescal in Aftersun

Bill Nighy in Living

Actor in a Supporting Role

Brendan Gleeson in The Banshees of Inisherin

Brian Tyree Henry in Causeway

Judd Hirsch in The Fabelmans

Barry Keoghan in The Banshees of Inisherin

Ke Huy Quan in Everything Everywhere All at Once

Actress in a Leading Role

Cate Blanchett in Tár

Ana de Armas in Blonde

Andrea Riseborough in To Leslie

Michelle Williams in The Fabelmans

Michelle Yeoh in Everything Everywhere All at Once

Actress in…

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We have been in a drought, created by the studios, since Bullet Train opened in the first week of August, so I get the urge to finally get to have some enthusiasm for the 3 movies of any real potential size that have opened in October: Halloween Ends, Ticket to Paradise, and Black Adam. There is a family movie, Lyle, Lyle Crocodile. Smile, the one title that really encourages enthusiasm, opened September 30.

Last October was blessed with the unique event of having a Bond movie in the mix. So let’s put that aside, out of fairness.

Black Adam is 27% behind Venom: Let There Be Carnage after 2 weekends.

Hal…

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Wish I had an editor to tell people I was great and brilliant and more important than oxygen… maybe I should make someone up. Hmmm…

My project this week is to write stories about the numbers in the industry in a ,ore concise, easily understood way for those who have requested it (and it is the #1 request I get). I’d love to hear any opinions of the topic.

Until tomorrow…

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THB #236: How Should You Feel About Halloween Ends' Opening?

More likely, the endless marketing of “if you don’t go to the movies, it will be on your TY in a few weeks,” that is de-motivating some percentage of the more consistent moviegoers. That and a general sense that “there’s nothing to go see.” Why isn’t there anything to go see? Because every studio now either has a streamer or has a set relationship with a streamer and some of the smartest, most talented, serious-about-the-…

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So I clicked on the clickbait.

1. Three Thousand Years of Longing

2. Bros

3. Nightmare Alley

4. West Side Story

5. In the Heights

6. The Last Duel

7. The Many Saints of Newark

8. The Suicide Squad

9. The Rhythm Section

10. Ad Astra

11. Doctor Sleep

12. Annihilation

13. Destroyer

14. Blade Runner 2049

15. The Assassination of Jesse James by the Coward Robert Ford

16. Children of Men

17. Fight Club

18. Grindhouse

19. Hugo

20. The Master

21. Inherent Vice

22. The Iron Giant

23. Mother!

24. Under the Skin

25. Warrior

26. Steve Jobs

27. Ali

First… why is this numbered? I have to stick with the idea that this was a random list and some enterprising layout person put numbers on it… because anything else suggests mind-altering drugs in use.

To my eye, about half of the movies qualify as being better than “good.” Some are quite bad. Seven of them are movies I actually love. Bros is the 2nd most egregious flop of the last 23 years? No… ca…

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Suckers!

Netflix got us again. All the talk about an ad tier for The Streaming King seemed like they were going to really change the face of streaming. But the devil, as always, is in the details.

“You want ads?! We’ll give you ads!” But they’ll only make the tier of interest to you if you are on their lowest customer tier. Before this, Netflix discouraged subscription at their lowest priced plan, $9.99 a month, by making it a 480p stream, which is not considered Hi-Definition. Also, the “Basic” level allows only one viewer at a time. The next level up. “Standard,” is $15.49 and offers 1080p and 2 streams at once. Lots of people are comfortable with that boundary, not much of the library is in 4k, even if you had it (and TV people will tell you that the streaming 4K isn’t really 4K anyway). The “Premium” tier is 4k and up to 4 streams at any one time… $19.99 a month.

Here comes the “Basic with Ads” tier at $6.99. 1 stream and 780p,…

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by Greg Marcus

I think @DavidPoland used the right word, “ecosystem.” There is the broad ecosystem of all the sales channels (theatrical, PVOD, VOD, streaming, etc). Viewed as an ecosystem, not a zero-sum game, there are many ways to benefit a piece of IP that goes beyond the box office itself, but it starts with simply adding revenue/box office to the overall income stream a movie generates across the sales channels.

However, there are more value creation opportunities. For example, the ability for theatrical to create awareness and distinguish filmed product can add value to that product as it move…

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This is a very sensitive issue for Netflix. My apologies to them in advance.

They have wanted, for years now, to make the claim that their awards films are theatrically released. And to some degree they are… but not in anything resembling the traditional way.

They basically 4-wall as many as 600 screens, including the theaters that they control in Los Angeles and New York. A few years back, they dramatically rented a Broadway theater and made it into a cinema for a few weeks for The Irishman. Very clever. A show of respect to Scorsese. And pricey for them.

Netflix announced their plans for this year’s line-up of fall/winter titles at the end of August. Did you know that Blonde has a 12-day theatrical before it was released onto the service last month? It did!

So today they announced that Glass Onion, the sequel to Knives Out, would get a 600-screen theatrical from Nov 23 - 29. They even added AMC to the list of chains that would show the film.

In other words… same old, same old.

As with T…

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The New York Times and its remarkably unknowledgeable and uninterested lead reporter on the industry did a story today laying out what The Academy has already been saying about The Museum’s popularity in recent weeks.

I am going to stop offering any opinion now and just count the revenues as identified in this piece and let you make whatever inferences you choose.

Museum Tickets - 700,000 visitors at $20 a ticket = $14 million
Memberships - 24,000 at $300 apiece - $4.8 million
Corporate Memberships - 100 @ $10,000 - $1 million
Gift Shop - $6 million
Philanthropic Contributions - $11 million
Geffen Theater Rental - 100 @ $30,000 apiece - $3 million
Event Space Rental -
50 at $50,000 apiece - $2.5 million
50 @ $25,000 apiece - $1.25 million
Fanny’s Restaurant - 150,000 people @ $20 apiece - $3 million

Notes

• I estimated $20 a t…

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2023 Sundance Film Festival Reveals Ticketing Details, On-Sale Dates, Venues, and the Festival Platform 

Mark your calendars! Ticket packages on sale starting October 17, and individual tickets on sale starting January 12

Park City, UT – The nonprofit Sundance Institute announced today several key aspects of the 2023 Sundance Film Festival (January 19-29, 2023), including the launch of this year’s various ticketing details, on-sale dates, venues, and the Festival online platform. It’s never been easier to attend the Sundance Film Festival. With a larger range of ticketing options, expanded theaters across Park City, Salt Lake City, and Sundance Mountain Resort, and an inspiring online offering available across the U.S., this coming Festival will continue to provide audiences with meaningful access to culture-shifting stories. 

Passes and packages will go on sale to the public starting on October 17. Online ticketing packag…

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I’m not against the international expansion at all… but it’s time for The Academy, which seems to want to continue to do this, to explain why it should continue to expand internationally and what the real goals are. Remember, the international expansion came as a result of complaints by non-whites in the American industry about inclusion. Unable to make a real impact on the statistics with domestic industry people of color, The Academy went international and took 4 years to admit as much.

The new CEO hinted at the idea that international was a growth opportunity for The Academy. If that is the case, it needs explaining, not just cheerleading.

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Maybe the lack of parking kept them away. Or years of benign neglect. But I believe new Academy leadership is sincere in wanting to turn the corner. They are going to have to work harder than this.

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Official Awards of the 79th Venice Film Festival (contents below…)

What do the winners of this year’s 79th Biennale jury (chaired by Julianne Moore and comprised of Mariano Cohn, Leonardo Di Costanzo, Audrey Diwan, Leila Hatami, Kazuo Ishiguro and Rodrigo Sorogoyen) mean here in the United States of Oscar?

Almost nothing.

This is not to diminish the choices, but for Venice’s festival to impact the Oscar race, it has to be the start of a ball rolling down hill of consensus. And when the Golden Lion goes to a documentary - All The Beauty And The Bloodshed by Laura Poitras (USA) - it doesn’t even assure the film for an Oscar Best Documentary win.

Cate Blanchett winning Best Actress for TÁR is already a bit of a consensus pick, even if the film is making a lot of people itchy. (I haven’t reviewed the film, which I have seen, because I want to see it again before writing about it in any depth. It is a feast and a fist. I want to measure both more.)

Colin Farrell was already, amazingly, a se…

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The 49th Telluride Film Festival is proud to present the following new feature films to play in its main program, the SHOW:

• ARMAGEDDON TIME (d. James Gray, U.S., 2022) In person: James Gray, Jeremy Strong, Anne Hathaway

• BARDO, FALSE CHRONICLE OF A HANDFUL OF TRUTHS (d. Alejandro González Iñárritu, Mexico-U.S., 2022) In person: Alejandro González Iñárritu, Daniel Giménez Cacho, Griselda Siciliani, Ximena Lamadrid, Íker Sánchez Solano

• BOBI WINE, GHETTO PRESIDENT (d. Christopher Sharp and Moses Bwayo, Uganda-U.K., 2022) In person: Christopher Sharp, Moses Bwayo, Bobi Wine, Barbie Kyagulanyi

• BONES AND ALL (d. Luca Guadagnino, U.S., 2022) In person: Luca Guadagnino, Taylor Russell, Mark Rylance

• BROKER (d. Hirokazu Kore-eda, South Korea, 2022) In person: Hirokazu Kore-eda, Song Kang-ho

• CLOSE (d. Lukas Dhont, Belgium-France-Netherlands, 2022) In person: Lukas Dhont, Eden Dambrine

• A COMPASSIONATE SPY (d. Steve James, U.S.-U.K., 2022) In person: Steve James

• THE CORRIDORS OF POWER (d. D…

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I’ve been wrestling with trying to explain why Joe Flint’s story of last week is so important. It’s right up there with Netflix adding advertising… putting the entire streaming segment into the ad business, each seeking their own best methodology.

The transition that all the companies with streamers that also have significant revenue coming in from legacy media is centered on the challenge of balancing the ongoing ability to earn from those legacy media outlets and the immediate revenue and potential revenue in each of the next 5 years of streaming earnings.

Wow. That is still too complicated. And it’s not even the new news. It’s the old news, really.

Trying again…

Comcast is the most conflicted Legacy media company in this transition to streaming. They have a broadcast network, an actual cable company, amusement parks, and a streamer. They have been in the game, but not fully committed. But they seem to be in the midst of a change of strategies.

Their NBC and Bravo content will soon a…

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This newsletter today was meant to be longer, but to be honest, I got lost in my own head searching for a clear answer on one important story and my brain overheated. If I can’t explain it simply and then embellish with history, I’m not doing it right. So that should be up tomorrow.

Meanwhile, on we march…

Let’s start with Netflix’s drop of theatrical release dates for 23 titles between now and the end of the year. The number at the end of each is the length of the theatrical.

One Week or Day-n-Date Release

• A Jazzman’s Blues (9/23, theaters 9/16) 7

• Luckiest Girl Alive (10/7, theaters 9/30) 7

• The Good Nurse (10/26, theaters 10/19) 7

• Descendant (Netflix and theaters 10/21) 0

• Wendell & Wild (10/28, theaters 10/21) 7

• Is That Black Enough For You?!? (11/11, theaters Nov.) 7?

• In Her Hands (11/16, theaters 11/9) 7

• My Father’s …

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I’m not suggesting how you should feel about Shia LaBeouf. I am not taking a position for or against him or Olivia Wilde.

What I am suggesting is that if you want to see a documentation of a person in the midst of trying desperately to change his life, this interview is worth your time. And not just the 16-minute YouTube version, but the whole 2-hour version, available at Patreon after a sign-up for $5 a month.

Shia LaBeouf selling himself as Mr. Good Guy is not what you will find here. What you will find is human who has a real sense of what damage he is capable of, to others and to himself, fighting to find a way to live in the world while keeping it all in perspective. Even as he is explaining - with what I believe to be complete sincerity - choices that he is trying to make, he is also falling in and out of performance… in exactly the way he is explaining that he is desperate to grow past.

In the discussion, Bernthal…

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So I am going to do headlines today like I haven’t before and just plow through what there is and add commentary. We’ll see how it goes.

I’m trying to stay away discussing the Olivia Wilde cover story in Variety. I just keep thinking…

JUST PERSONAL THOUGHTS… NOT NEWS…

…how would people be treating the 38-year-old male director who left his wife for the sexy 28-year-old pop star/wanna-be actor? And I suppose the answer would be, “What’s new? Ten years is nothing in this misshappen business.”

I hope the movie is great. I have liked Ms. Wilde in the brief moments I have had with her as press. I wish her and her family and her boy toy and her ex all the best moving forward. But I don’t really want to …

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