Movie studio execs must be keeping America’s psychiatrists pretty busy. I imagine all their therapy sessions start out with a discussion of the same recurring dream: their spouses have lost all interest in them and have fallen for the small, evil red envelopes that have been moving in on their territory for years. Of course, when they first met, the movie execs thought the envelope was awesome: it babysat the kids, walked the dogs, and trimmed the roses. Then, boom! One day, said executive catches the little red bastard in bed with their better half.
And so goes the battle between Netflix and Hollywood. Netflix began as an innocuous business partner to the major studios. The mail-order system, with a policy that included no late fees, unlimited rentals, and fast shipment, made it an immediate rival to Blockbuster—and that’s all everyone talked about. Yet Netflix’s Manhattan Project was already underway, and its secret weapon would soon be unleashed, leaving Blockbuster and Hollywood alike as prepared as Levi Johnston on prom night.
That weapon was Internet streaming. Soon Blockbuster would find itself on the way out. As Blu-Ray players and Xbox 360 consoles began to allow Netflix users to stream high-def films onto their televisions, the incentive to go out and rent a DVD all but disappeared. The Blockbuster customer found himself with a limited selection and persistently steep prices, and he soon turned over to the red side.
With Blockbuster out of the equation, Netflix has basically monopolized the rental business, causing great disturbances to DVD and Blu-Ray sales. While movie studios could no longer profit from sales of multiple copies of a DVD to Blockbuster, home media sales still remained a lucrative business prospect. Netflix had made yet another enemy.
But the movie delivery service didn’t stop there. Netflix, in its boldest move to date, bought the rights to The House of Cards, a series directed by David Fincher and starring Kevin Spacey that carried a price tag rumored to be in the hundreds of millions. The series will be broadcast exclusively to Netflix users, putting the rental service in a position to compete with network television.
Yet perhaps the biggest threat to Hollywood may be the damage Netflix inflicts on box office performances. With instant streaming, studios are worried that audiences may lose the motivation to venture to the movie theater, especially considering a single Saturday night ticket could dwarf the Netflix monthly fee. To add to this problem, movie companies are considering releasing movies on home media just two months after their theatrical release in an attempt to increase DVD and Blu-Ray sales. (Netflix can’t send out movies for a 28-day window after their home media release.)
While there is surely more to come in this ongoing battle, people are already raising questions about how it will affect consumers. Netflix’s reasonable price ($7.99/month), which has been highly profitable for them so far, caps the potential revenue from rentals. And while studios may start competing against it—like Warner Bros., which has started using Facebook to stream its movies—the task of trumping, or even competing against, the ubiquitous Netflix will prove challenging. As for the box office, dwindling studio profits will likely result in a smaller film output overall, and, sadly, a decrease in daring or ambitious films that carry higher monetary risk.
But despite all the benefits, Netflix still lacks the sentimental value of a night at the movies. And while studios may struggle for the time being with home media sales, movie theater audiences will likely still remain. The thrill of the big screen and the joy of giant sodas and “buttered” popcorn are ingrained in American culture—and that’s something that can’t be streamed to your TV.
John’s always more prepared than Levi. Email him at jsapunor@georgetownvoice.com
