Jan 15 2021 - Netflix Raises Streaming Stakes With Latest Expansions In Key Area
- The end of 2020 marked a time of transition for the movie industry where the challenge posed to the traditional model by streaming was escalated due to the pandemic.
- With Disney’s astronomical growth in such a short period of time and HBO Max making clear it wasn’t shying away from the challenge, many wondered how Netflix would respond.
- As it turns out, Netflix’s counter-moves were two-fold and involve a new weekly drop of top-tier films and a long-term deal with Kevin Hart.
- These 70+ movies span every genre and come at a time where people are searching for at-home entertainment with the same type look, feel and big name talent as theaters.
- The company also announced a new deal with comedian Kevin Hart for a package of four films that is reminiscent of the successful pact it previously made with Adam Sandler.
The end of 2020 marked a time of transition for the movie industry. Disney revealed a path that would promote unity and collaboration between its TV shows and films, while HBO Max went down a different path that has set up a feud between them and industry creatives.
Two completely different strategies to be sure.
We can debate who was right, who was wrong and what exactly the future holds but truthfully it is too early to do that. Disney picked up a few key wins in the fourth quarter, as did HBO Max, but the long-term impact is still not clear to analysts or investors.
What is clear though is that Netflix was going to have a response. This is a company that every time someone (foolishly) assumes they are painted into a corner, finds a way to magically expand the room.
First as always, some background.
The streaming leader didn’t wait long to unveil its counter-plans to the moves of its rivals. Just days into 2021 you can already tell a lot of time, thought and money went into this new approach – it wasn’t a knee-jerk response. This has the potential to continue disrupting a market that will be in a constant state of flux for a long time to come.
With Disney’s astronomical growth in such a short period of time and HBO Max (aka AT&T) making clear it wasn’t shying away from the challenge, all eyes fell on Netflix. As I alluded to in an earlier piece, the various shifts in the market were going to impact the streamer, but not in ways they weren’t prepared for.
Remember Netflix was built on acquisitions (largely TV based) with the idea being come for the content you know, stay for the content we create. Fully aware one day that model would be less feasible because the networks and studios would wise up and hold back that content.
It is the same thing here except with film.
Netflix can’t just go out and as easily buy the projects studios don’t want or have lost faith in anymore – many of those are now earmarked for their own personal services (regardless of the level of expectations). As a result, I noted Netflix would just have to focus on its own content, and it did.
Netflix revealed this week a plan for over 70 new movies a year, which boils down to at least one new movie a week. And these (of course) are not throwaway films with B-level talent, if you run through a list in your mind about your favorite actors of today, the odds are you’ll find a film with a handful of them in there.
Jennifer Lawrence, Leonardo DiCaprio, Dwayne Johnson and Meryl Streep are just some of the names coming into your living room or on your mobile device.
These movies span every genre and come at a time where people are looking for at-home entertainment on or above the level of what you would normally see theatrically. With many film and TV productions on a temporary pause due to COVID, having this many projects banked and ready to go solidifies Netflix’s role in the new entertainment landscape and also increasing investor confidence.
However, that wasn’t the only news Netflix made this week in this space which should get the attention of shareholders.
The company also announced a new deal with Hollywood star Kevin Hart for four films that he will star in and produce – along with a first look deal at future projects.
If that type of arrangement sounds familiar, it should.
Netflix made a similar deal years ago with Adam Sandler for the same type of partnership. It was lucrative for both sides and it was re-upped not long after the first four films were released. Sandler was chosen as the first actor to have this type of deal based on Netflix’s internal data on what its viewers watched.
Turns out they were big fans of the Sandman.
Hart is no different and his latest comedy special was the most streamed comedy special on Netflix in 2020, which makes this a natural fit.
“Netflix has enjoyed a long relationship with Kevin and we've been lucky enough to partner with him many times. He's a hands-on producer and it's been great to watch him build an incredible company with HartBeat. There are very few artists who can attract audiences of all ages and succeed in making comedies, dramas and family films. We're excited to partner with Kevin, and his great team at Hartbeat, to entertain our audience for years to come." – Scott Stuber
That quote from Stuber, who oversees Netflix’s film division, may seem like a typical executive quote that says nothing, just in a very nice way – but he actually makes a great point. It is true, there are very few artists who can attract audiences of all ages and succeed in making comedies, dramas and family films.
Hart is a multi-talented performer and like Sandler, he wants to expand his path…including going the dramatic route and with Netflix’s True Story series he will get that chance. I actually wouldn’t be shocked to see Netflix give Sandler the same ability given his last dramatic role in Uncut Gems won him serious critical praise.
Fun side note – Sandler vowed that if the Oscars snubbed him he’d purposely go out and make a movie so bad and so over-the-top just to make them pay. It was a joke made on the Howard Stern show, but there’s a lot of truth to it as he was snubbed and Sandler’s Hubie Halloween (which aired on Netflix last Halloween) could very well have been that film.
Of course, that’s the point – Sandler’s films are now critic-proof because Netflix audiences don’t care what critics think about its films. Hart, who has had a rougher go at the box office in recent years, likely has seen the same thing and knows it’s a smart career move.
Both men have the same style where it’s a “love them” or “hate them” mentality. You either love their schtick or you don’t, but then again with a “two-minute metric” for ratings, you’ll never really know on Netflix what fans actually thought.
Again, that’s the point.
Still, you have to applaud Netflix here because neither deal is that out of the ordinary for them and should appeal to investors. We knew Netflix was going to expand its film practice (specifically with animation), we knew they liked to make big deals with big talent and we knew they were not going to sit by while rivals gained on them.
These are smart decisions designed to expand its footprint in an area it really wants to thrive in. The pandemic provided them a foothold and they took advantage. The question becomes how will they do in relation to Disney and HBO Max (and others).
Again, it’s just too early to tell, but at least now we have a clear idea of where each streamer is going in 2021 and it’s up to subscribers to dictate where this story goes from here.