Cyber Bully

 

First, it killed Blockbuster.

Now, Netflix is taking a chainsaw to the walled garden of film and television production.

Traditional Process

Here’s the traditional process for making a movie. This system has remained relatively unchanged for the last 40 years.

(Above)A studio makes a film and sends it to a distributor to sell to retailers (e.g. movie theaters, TV networks, and streaming services.) Through these retailers, the film is made available to consumers for the price of a movie ticket or cable package or DVD or on-demand video. It’s important to note that in this process, the extent to which a film is made available to consumers varies widely from project to project and retailer to retailer, typically based on revenue projections and a film’s potential for mass-appeal.

Netflix Process

(Above) Netflix makes a movie. As soon as it’s ready, the film is made available to anyone with a Netflix username and password – so basically, you and everyone you know, as well as 130 million of others around the world.

 

When it comes to developing TV shows, Netflix’s advantage over legacy media is even greater: network and cable TV programs usually go through dozens of rewrites and sometimes years of tweaking in an attempt to please network heads and studio execs; and ultimately, advertisers have final say over what shows get aired on traditional television. Sheesh.

The streamlined content strategy used by Netflix is known as direct-to-consumer (DTC). The efficiencies created by the DTC model allow Netflix to push content to users at an unprecedented rate, and it’s done just that:

“Netflix is estimated to have out-spent all of its competitors in 2018, buying $13 billion worth of non-sports content.”
– David Morris, Fortune Magazine

“Netflix subscribers got 82 new feature films to binge [in 2018]. In comparison, the studio with the biggest slate, Warner Brothers, will put out just 23 films and Disney will only release 10.”
– Dana Feldman, Forbes.com

Netflix combines its shotgun approach to original content creation with an array of algorithms constantly working to curate content “For You.” Real-time data from actual users determines what has appeal and what does not, instead of suits in a boardroom with pie charts and tee times.

And while some Netflix Originals, like the aptly named “Everything Sucks,” have flopped, others like “Stranger Things” and have become massive hits. Last year, Netflix Originals received more Emmy nominations than rival HBO, and this year “Roma” has been pegged as an Oscar favorite in several major categories, including Best Picture. (In 2017, fellow disruptor Amazon became the first streaming company to win Best Picture with its heart-breaking drama “Manchester-By-The-Sea.”)

Impact

“Netflix’s leap into the top echelon of the entertainment industry in just a few years has left Hollywood in a state of near bedlam.”
– Cynthia Littleton, Variety

Despite being an internet-first product, Netflix is now the single most popular way to watch video content on television.

“27% of Americans say Netflix is their most-used television service, followed by basic cable (20%) and broadcast (18%). With younger viewers (18-34), Netflix surges to 40%.”
– Sarah Toy, MarketWatch

Netflix is now valued at $140 billion – just 16% less than Disney, the largest media company in the world.

The magic kingdom is preparing for war in 2019. Over the next twelve months, Disney will acquire 21st Century Fox, strip all of its content from Netflix and launch its own DTC platform.

“The launch of direct-to-consumer services is the biggest priority of the company in 2019.”
– Disney CEO Bob Iger

 

Netflix premiered “Bandersnatch,” a groundbreaking,choose-your-own-adventure episode of its critically-acclaimed series Black Mirror, in the final days of 2018. And it was completely overshadowed by Netflix’s own meme-powered mega-hit, Bird Box.

Netflix invested millions of dollars and over two years building a state-of-the-art “branch manager” to handle the incredible intricacies of Bandersnatch and people hardly noticed because Sandra Bullock in a blindfold took over the internet.

As the internet’s most prolific storyteller, Netflix can afford to take chances like Bandersnatch again and again. And that’s when the true scope of the company’s power is realized; like the bully on the playground that Disney and others have come to fear, Netflix is taking swings just because it can.

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