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'Netflix is calling the shots': How the streaming service could upend the movie biz

10/01/2014 12:25 EDT | Updated 12/01/2014 05:59 EST
Netflix's foray into original moviemaking is stirring up controversy, as theatre owners balk at sharing film premiere dates with online streaming sites.

On Tuesday, the company announced that not only is it producing a sequel to the 2000 film Crouching Tiger, Hidden Dragon, but that it plans to forgo a traditional theatrical premiere and instead simultaneously release it online and in some Imax theatres on Aug. 28.

Richard Cavell, a University of British Columbia English professor who studies media theory, says the move reflects the way Netflix is changing how we consume film.

"The entire viewing landscape is changing and it's changing because we've entered into the digital era," says Cavell. 

"Netflix is calling the shots. People want to watch things when they want to watch them, where they want to watch them — and they will do so."

Revamping movie distribution

In the past, people have had to either pay to see a movie on the big screen or wait until it becomes available on DVD or online, which was often months later.​ In its announcement on Tuesday, Netflix said it wanted to give subscribers greater freedom in viewing.

"Fans will have unprecedented choice in how they enjoy an amazing and memorable film," Ted Sarandos, Netflix's chief content officer, said in a written statement. Netflix also announced that it is working on other films for this distribution model.

​The move suggests that Netflix wants to shift the distribution system to better suit its business needs.

"I think that this is another attempt to try to shrink the various distribution windows [for movies]," says James Nadler, an associate professor at Ryerson University's RTA school of media.

Crouching Tiger, Hidden Dragon: The Green Legend isn't the first film to circumvent traditional distribution routes.

"There's been some experiments on a smaller scale," says Nadler, who also develops and sells TV programs to broadcasters.

A few days after the crowdfunded movie version of the beloved TV series Veronica Mars was released in theatres in 2014, digital copies were sent to anyone who contributed $35 US or more to the movie's Kickstarter campaign.

Last year, Yahoo streamed One Chance, a biopic about a man who won Britain's Got Talent, on its Yahoo Screen service for 10 days before theatres showed the movie. Also in 2013, movie buffs were able to rent a digital version of the sci-fi thriller Snowpiercer shortly after theatres started screening it.

Theatre chains boycott Netflix plan

The movie business seems to be wary of this trend of speeding up the turnaround from big screen release to home viewing.

Cinemark, Carmike Cinemas and Regal Entertainment Group — three large American theatre chains — won't screen The Green Legend, reported Variety. None of the companies responded to CBC News requests for comment.

The National Association of Theatre Owners (NATO), which represents more than 30,000 movie screens in 82 countries, has been fighting against expedited online and video-on-demand releases for years. The organization has been tracking the diminishing time frame since 1997.

"If wiser heads do not prevail, the cannibalization of theatrical revenue in favour of a faulty, premature home video window could lead to the loss of hundreds of millions of dollars in annual revenue," reads a 2011 open letter — signed by movie greats including directors Kathryn Bigelow, Guillermo del Toro and Peter Jackson — on NATO's site.

They call shortened at-home movie releases a "cut-throat new model" that will increase movie piracy.

Netflix holds the power

That reaction is backward-looking, says Cavell. 

Netflix has adapted to people's demands of the entertainment industry, he says, while Hollywood studios have lagged behind.

The move fits into the Netflix business model, agrees Nadler, explaining that the company creates must-watch programming that drives people to their streaming service.

TV stations such as CBS used that model in the mid-20th century, says Nadler, prompting people to purchase televisions to access their programming.

"Netflix is doing the same thing, but instead of televisions, what's selling is a subscription service."

That business model has changed where we watch television — from TVs to computers. But Nadler isn't convinced that Netflix's upcoming movie releases will kill the idea of watching a film in a theatre.

"There's something about seeing something on a big screen with a crowd on a Friday night when it's just released that is exciting," says Nadler.

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