Netflix Aims to Reinvent the Movie Business With Some Help From Adam Sandler



First it went after television. Now Netflix is going after movies. Adam Sandler is involved. It's the future of cinema, people. Better get used to it.

The streaming online video company, which has helped revolutionize delivery models and viewing habits for television series, announced two separate deals to produce and distribute original feature films this week, one of which—a sequel to  the Oscar-winning 2000 martial arts epic Crouching Tiger, Hidden Dragon—will also hit some movie theaters on the same day it goes out to Netflix subscribers.

The other deal involves the production of four new Adam Sandler movies, reportedly with budgets comparable to his traditional studio releases, which typically cost $40 million or more.

Why did Sandler take the deal? Here's his explanation, via The New York Times: "When these fine people came to me with an offer to make four movies for them, I immediately said yes for one reason and one reason only….Netflix rhymes with Wet Chicks."

It's that sort of brilliant verbal wit, folks, that makes Sandler such a comedic force to be reckoned with.

An alternative explanation is that Sandler's last few movies haven't performed very well at theaters—but his movies are, apparently, hugely popular on Netflix. According to the Times, Netflix noticed how strong the numbers were for Sandler's movies on the service and approached the actor through his agent about making a production deal.

The Sandler deal suggests the promise (and, okay, the peril) of all-online, all-on-demand media, in which users not only choose exactly what they want to see but leave a perfect digital record of their choices. That means that entertainment companies can make deals that more accurately capture and reflect the interests of their customers, and that products—and let's be clear, Sandler, the movie star, is a product—that don't or no longer have the mass appear to make it at the box office can find other homes.

This touches on some of the issues involved in both media ownership and Internet privacy debates as well: A company like Netflix obviously collects an awful lot of data on its users, well beyond the ratings that users submit about their tastes. But collecting all that data allows Netflix to know its customers better, and to create products they are more likely to enjoy. Other studios would have a harder time doing business this way, in part because they can't collect data on viewership quite as easily, and in part because they don't have the built in distribution network that Netflix has. (HBO is probably the closest competitor, and certainly when it comes to original television series, it blazed a trail for Netflix to follow and expand upon.)

The Crouching Tiger deal, on the other hand, is pretty clearly aimed at helping to, ah, degrade and eventually destroy the power of the big movie theater chains. The movie itself is not unimportant, but what Netflix really wants to crack are the distribution windows that give the theater industry a three-month exclusive on most big releases. That's why a big component of the deal is simultaneous distribution on IMAX screens, many of which are located in chain theater locations, but are operated somewhat independently.

As Netflix chief content officer told The New York Times, "What I am hoping is that it will be a proof point that the sky doesn't fall. These are two different experiences, like going to a football game and watching a football game on TV."

The theater chains are not happy about this, and at least two have already indicated they won't allow the movie to play on their screens. So it may be that we're in for a protracted business battle over release windows and distribution rights.

Fundamentally, what's happening here is that Netflix is taking aim at the movie business in much the same way it took aim at the television business—attempting to upend the old models and systems that have dominated Tinseltown for so long. Whether or not Netflix gets everything it wants, it's eventually likely to shake up the movie industry somehow. In the meantime, if the transformation of the movie industry looks anything like the transformation of television, we'll benefit as consumers from the competition.

I have a long look at how HBO, Netflix, ad-supported cable and others helped reshape television programming, and save it from decades of public-interest focused awfulness, in Reason's new, TV-themed print edition.