No, Netflix Did Not Kill Hollywood
By: Sean Kim
Tags: Movies, Covid 19, Hollywood, Streaming, Netflix

No, Netflix Did Not Kill Hollywood

3 Lessons Hollywood Needs to Learn From the Rise of Streaming

John David Washington in Tenet, saving the world and the film industry? I doubt it. (Warner Bros)

In a recent New York Times interview with Reed Hastings, the co-founder of Netflix, journalist Maureen Dowd begins her interview by asking him:

“Does it feel good to be the man who killed Hollywood?”

Hastings responds with a “No,” and follows up with, “but, of course, we haven’t killed Hollywood.” Hastings is right; contrary to sensationalist headlines, Netflix hasn’t killed Hollywood — it’s forcing change.

With the improvement of at-home audiovisual tech, affordable streaming subscription prices, and Gen Z/Millenials becoming the primary consumers of movies, Hollywood was always due for a change, it’s just that Covid-19 sped the process up.

AMC Theatres, the largest movie theater chain in the nation, almost went bankrupt. Tentpole studio films such as Tenet have suffered from mediocre box-office returns, while films such as Mulan have turned to streaming for refuge. Traditional Hollywood is in limbo.

On the other hand, streaming services such as Netflix are thriving. Out of Netflix’s ten most popular original movies as of July 2020 (based on most-watched within the first four weeks of release), four movies released in 2020 made the list, with Extraction being the most-watched with 99 million viewers.

Although I’m an avid supporter of the rise in streaming, I don’t necessarily want theaters to die out.

As a supporter of both streaming and theaters, how should Hollywood go about utilizing the success of streaming without killing theaters in the future?

Although I’m not an industry expert, here are three things that I think Hollywood needs to realize in order to prepare for the future:

1. People prefer their homes over theaters (most of the time)

Sorry Martin Scorsese, I was never going to go see The Irishman in theaters

Robert De Niro is very angry because I didn’t go to the theater to see his movie. (Netflix)

I debated going to the theater to see Scorcese’s The Irishman back in November. I didn’t go.

I’m a film student. I’m supposed to worship this man and anything he does. At the same time, I’m nineteen; I don’t have the patience to sit through a three-hour movie, nor do I want to drag myself to the theater to watch it. Why?

It was November in New York City. It was cold.

I didn’t want to take the subway to Broadway (Belasco Theater?).

I didn't want to pay extra money for something that would be on Netflix eventually.

I didn’t want to sit in an uncomfortable seat for three-hours.

I probably would need to go to the bathroom at some point and would miss an important scene.

I fully admit it, I didn’t go because I was lazy and it was inconvenient.

This is the case for the majority of movies for me. Streaming services have offered the option to control where I watch, when I watch, and how I watch. And increasingly, I find that I am less likely to go to theaters unless there is a specific reason to (spectacle, blockbuster, action, etc.).

Think this is just me? In a 2019 report by The Motion Picture Association, it shows that since 2015, while the US theatrical market grew 2%, the US home/mobile entertainment market grew 40%. The 2019 US digital market for movies accounted for 56% of the market, while the US theatrical market only accounted for 31%. The demand for watching movies at home is already larger and growing faster than watching movies in theaters.

While the reasons for preferring home over the theater definitely vary from mine, there’s no question that the “at home” viewership is now more important than the theater. The US digital market combined with the physical market (DVD, Blu-Ray) last year was worth $20.5 and $4.7 billion respectively. The theatrical market, while still a significant portion, only accounted for $11.4 billion.

The main takeaway? The film industry needs to prioritize streaming and on-demand services rather than shaming them like in 2017. Maybe people like me have gotten lazier. Maybe people think theaters are inconvenient and expensive in comparison to streaming. Regardless, people prefer to stay home and watch movies rather than go to the theater. Even with auteurs like Spielberg or Scorcese bemoaning the downfall of the cinema, these op-eds and complaints won’t matter. It’s clear that the film industry is headed in the home/digital direction whether they like it or not. Hollywood needs to adapt to this reality rather than fight it.

2. People will only show up to theaters for spectacle movies

I’ll pass on The Irishman, but I’ll go to the theater for movies like John Wick

Keanu Reeves looking very serious in a promotional image from John Wick: Chapter 3 (Lionsgate)

I like to log the movies I’ve watched over the years on IMDB. Looking back at 2019, here are all the movies I saw in theaters:

Glass

The Nightingale

They Shall Not Grow Old

Captain Marvel

Us

Shazam

Avenger: Endgame

John Wick: Chapter 3

Yesterday

Spider-Man: Far from Home

Midsommar

Crawl

Once Upon a Time…In Hollywood

The Farewell

It Chapter Two

Ad Astra

Joker

Parasite

Jojo Rabbit

Ford v Ferrari

Frozen II

Knives Out

Star Wars: Rise of Skywalker

I go to the theater to be jump scared by alligators in “Crawl.” I go to the theater to react to all the ways Keanu Reeves shoots people in “John Wick: Chapter 3.” I go to the theater to see destruction and explosions in “Avengers: Endgame.”

Like most moviegoers, I go for the spectacle.

Out of the twenty-three movies I saw in theaters, I would only consider four to five movies as “non-spectacle.” The rest I would classify in the “spectacle” category which includes, blockbusters, thrillers, horror, and action.

Think my taste in movies is too basic? Think I’m generalizing the average viewer too much? Think again.

Of the top hundred domestic box office performers in 2019, nineteen of the twenty-three movies from my list are there. Only four movies didn’t make it (“The Nightingale,” “They Shall Not Grow Old,” “The Farewell, and “Jojo Rabbit”).

“The Nightingale” is an indie drama film about revenge.

“They Shall Not Grow Old“ is a documentary with an impressive color restoration of World War I Footage.

“The Farewell” is an intimate A24 film about Asian family conflicts.

“Jojo Rabbit” is well… about a kid whose imaginary friend is Hitler.

Do you sense a trend here? If you remove these four movies from my list, the majority are blockbusters, thrillers, franchise films, horror, etc — in general, all spectacle movies. Audiences show up to these films to be wowed, scared, and shocked. With the majority of US adults going to the movies occasionally (less than once a month) and infrequently (once a year or less), they don’t have time to watch documentaries and drama films (with the exception of some Oscar winners) in theaters.

Going to theaters is an experience, an event, not just a viewing. People go to theaters because watching these spectacle films is different than at home.

For example, watching Emma in theaters is probably pretty similar to watching it on Netflix. Watching Star Wars in theaters is a different story.

And as much as I love period pieces and drama movies — people would rather spend their once-every-three month trip to the movie theater to be wowed with car chases than be moved by family conflicts in movies.

Sorry folks, that’s the reality.

3. Streaming is saving movies, not killing them

Streaming provides movies with longevity and much-needed originality

Ewan Macgregor doing his thing in Doctor Sleep, a box-office flop (Warner Bros.)

So then what is Hollywood to do with non-spectacle movies? What about spectacle movies that bomb? Should studios just not take creative risks due to a fear that a movie will bomb at the box office?

A trend that countless other people have noticed is the perpetual development of franchise movies, reboots, sequels — aka “safe” movies. Think Marvel, DC, Star Wars, and a whole lot more. These are audience-tested, often formulaic, generic blockbusters that are cash cows for studios (not that I don’t like them).

Remember, at the end of the day, studios will put money before artistic expression; why risk making artistic movies when focusing studio energy on sequels and reboots increases the chances for profit? This problem has plagued Hollywood for years, which can be seen by the plethora of franchise films and the lack of original films.

This problem worsens when people don’t even show up for these “safe” films. For example, take last year’s Doctor Sleep, the sequel to every film student’s circle-jerk movie, The Shining. The movie was decently received, but it was considered a box-office flop.

Before the movie’s release, director Mike Flanagan was hired to write a prequel script. After the film’s box-office performance, the future of the prequel is unclear.

However, in late June, something interesting happened. The film was released on HBO Max. And not just the theatrical version, the director’s cut that was longer than the 152-minute runtime. Soon enough, after releasing it on streaming platforms, the film was trending on Twitter and has clearly developed a fan base.

Sure, there’s a possibility that WarnerMedia (owner of HBO), didn’t recoup its losses for Doctor Sleep, but there’s something to be said for breathing new life and internet buzz into a box-office flop.

Streaming platforms can provide films with longevity and relieve studios of the worry of relying solely on box-office figures to determine if a film is a success or not. Even long after films are theatrically released, studios can benefit. Taking a look at the “Most Popular” section on Netflix, films that are more than ten years old such as Zodiac, Pineapple Express, and Million Dollar Baby are on the list. Although I don’t know the exact specifics Netflix pays studios for content licensing, one can assume that studios are making a decent amount based on the fact that Netflix’s licensed content cost them $14.7 billion last year.

Outside of saving movies that flop at the box-office, streaming is saving movies in a completely different way: original content.

Companies like Netflix, Hulu, and HBO don’t depend on theaters for financial success. Instead, they succeed if they can keep their viewers subscribed.

There’s less of a concern for spectacle, franchises, and whether people will show up. All they want is good content to attract and keep viewers.

Bong Joon Ho famously praised Netflix for giving him final cut privilege on Okja. Martin Scorcese turned to Netflix for financing The Irishman when other studios wouldn’t. Apple TV+ recently did the same with Scorcese’s new film, Killers of the Flower Moon. Streaming services make original films possible when so much of studio budgets are directed towards generic blockbusters.

Streaming services are hungry for original content, whether that be a blockbuster to an indie production. Consistently delivering fresh and original content keeps people subscribed. This encourages streaming services to help develop new content regardless if its part of a franchise or not, filling Hollywood’s void of original content.

Take a look at Netflix, Hulu, or any other platform’s films(other than Disney+). Sure, some of them might be bad films (Cuties ahem), but you can’t deny the fact that these movies are original.

In a world of sequels and franchises, streaming services’ lack of incentive to focus on blockbusters and sequels for maximized theater revenue allow them to make a variety of original films in the name of expanding their catalog.

Say what you want about streaming services, but it’s without a doubt they are the ones leading the charge for new stories in film.

Final Thoughts

Streaming services talking to traditional Hollywood studios (Malcolm in the Middle)

In my first film class in college, my professor said that every couple of years, the media goes crazy, writing articles that usually go by, “Is _____ the Death of Hollywood?” The rhetoric used in The New York Times article along with countless others surrounding streaming’s domination is no different.

Hollywood has always had its share of problems and scares. Right now, its biggest “scare” is streaming in the time of COVID-19.

However, I firmly believe Hollywood will adapt instead of die-off. It depends on how you look at it.

Unfortunately, I don’t think things will “go back to normal” for traditional Hollywood after the pandemic is over. Netflix and other streaming services are already king, the “new” Hollywood — and they are thriving. So in that sense, Netflix hasn’t killed Hollywood because it has become Hollywood.

In terms of old Hollywood, gone are the days of Universal, Warner Bros, Paramount, and old studio dominance. It’s clear to me that streaming is the new normal for content consumption.

And while I’m just a college student, from a consumer standpoint, I believe if traditional Hollywood starts with these three things, these studios will be able to maintain relevancy in some way. If not, they’ll be swallowed up by streaming giants, but it doesn’t have to be that way. The pandemic in conjunction with streaming hasn’t killed Hollywood, it only made Hollywood realize its cracks. Now is the time to play catch up.

I’m genuinely optimistic about the future of the film industry. New Hollywood is thriving and rapidly progressing from old methods. Hollywood isn’t dead, it’s changing. Welcome to a new era.