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The sun is setting much earlier here in the Mid-West. Fall approaches and the light is getting softer. For the first time in a long time the Labor Day weekend saw no major releases. I was at convention in Texas where exhibitors streamed excitedly the latest Star Wars trailer only to have their excitement quelled by seeing the title card, starts streaming November 12th. What they viewed was a trailer for the series The Mandalorian, the streaming series directed by the same fellow who made Iron Man, Jon Favreau.<\/p>\n
I saw the eyes of these exhibitors after they viewed the trailer. They realized that the fall of 2019 was going to be the beginning of the fight of their lives. They realized finally that the tide had shifted and they had to quickly define a new business model or they would be caught in the crossfire of The Streaming Wars.<\/p>\n
November will be a dark month for theaters, a month when Disney launches Disney Plus and the ultimate cinematic auteur, Martin Scorsese would premiere his latest opus on Netflix.<\/p>\n
Paramount was first offered \u201cThe Irishman\u201d but rejected it due to its $159 million-dollar budget. Scorsese, not a stupid man, realized that the times they were a-changing and placed himself on the doorstep of Netflix. Frankly, you cannot really blame him. Paramount announced that \u201cThe Irishman,\u201d a throwback to the 1990s Scorsese hits \u201cGoodfellas\u201d and \u201cCasino\u201d was going to be produced almost a decade ago. It seems that they changed their minds.<\/p>\n
Currently, the head of Netflix\u2019s film division is in talks with at least two large chains, AMC Theatres, and Cineplex, the largest exhibitor in Canada, with over 1,600 screens. Rumor is that Scorsese is hoping for has been pushing for a large national theatrical release. Regal and Cinemark have stated that they are not in negotiation with Netflix for the movie. During the Toronto International Film Festival which is on now, Cineplex told the festival organizers that Amazon and Netflix titles it solely programmed for a short run in movie theaters have been barred from its multiplex on Richmond Street which traditionally has been the prime screening venue for the festival. So unless Netflix provides a longer run for \u201cThe Irishman\u201d it\u2019s not looking too good for a deal with Cineplex.<\/p>\n
No matter what promise or manifestation Netflix makes, it will always have one singular goal delivering streaming video on demand to its 151 million subscribers worldwide. Now let\u2019s take a sidebar for a minute. So, Netflix has 151 million subscribers. Its average subscription price is $12.99 per month. \u201cThe Irishman\u201d cost $159 million to make. So, doing the math leads to the conclusion that in order to secure the rights to \u201cThe Irishman\u201d Netflix spent 8.1 % of it gross revenue for the month of November. Last year Netflix made $183 million in profit. They really must be big Scorsese fans, or they are desperately trying to buy the market.<\/p>\n
But what is really enticing for Netflix is the opportunity to win that Best Picture at the Oscar\u2019s. They want that Oscar; they need that Oscar and will do whatever it takes in order to secure it. Even if it means that their shareholder will not see any profits that month. They came close last year when \u201cRoma,\u201d the more than moody black-and-white movie from Mexican director Alfonso Cuar\u00f3n. \u201cRoma\u201d won deep praise from critics and managed after a 13-hour release window to win three Oscars this year; best director, best cinematography and best foreign-language film.<\/p>\n
In 2018 Netflix made deals with small exhibition circuits like Landmark and Alamo Drafthouse for one-week runs of the Sandra Bullock thriller \u201cBird Box\u201d and the Coen brothers\u2019 western \u201cThe Ballad of Buster Scruggs\u201d before they premiere on its own platform. The rumor is that Netflix was to give \u201cThe Irishman\u201d the same 21-day window they had for their 2018 releases.<\/p>\n
In an interview last year, Scorsese was quoted as saying he chose Netflix because they were \u201cactually making our movies, from a place of respect and love for cinema,\u201d and to paraphrase Marty, their check cleared the bank.<\/p>\n
I personally think Netflix is overshooting the runway and is heading towards a bad end. Barclays made the following recommendation to Netflix based on concerns that it was overspending on a phenomenal level on content acquisition. Barclays: \u201cWhile direct release of smaller budget films on Netflix makes economic sense, we believe franchise-oriented films will need to include theatrical release on a large scale to optimize returns\u201d I could not agree more.<\/p>\n
Right now, \u201cThe Irishman\u201d will have a theatrical release on November 1st, followed by a streaming release on the 27th.<\/p>\n
Mark my words, the reluctance of Netflix and the other streamers to provide theaters with a proper release window will be their own demise. A movie is an event. Unfortunately, Netflix is treating this most American of art forms as a commodity.<\/p>\n
That, and of course they are spending money like drunken sailors.<\/p>\n