In 2017, Netflix and Amazon changed movies – in 2018 Hollywood will fight back

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To understand just how powerful Amazon and Netflix became in 2017, you have to look at what happened at the year’s close. 

In December, Disney, a bellowing freight train of a media company, made yet another stop to pick up Fox and its $52 billion assets. 

Buying Fox has meant it has acquired a new portion of Marvel characters to sustain the MCU for years to come, bought its way into UK homes with a chunk of BSkyB now under its wing, and became a majority shareholder in Hulu – a streaming service that’s yet to make its way out of the US but has served up fantastic fare, with the likes of The Handmaid’s Tale on its books.

That last point is very important as it fits nicely with Disney’s previous bold assertion that it plans to make its own streaming service, for its animated arsenal and expanding Star Wars galaxy. It’s doing this to do what it can to stop the two-horse streaming race.

Because that’s exactly what streaming is in 2017, with both Netflix and Amazon parading a distribution method that’s happy to upturn the stuffy Hollywood ways of old and put its money where its mouth is. It’s got everyone worried – from distributors to theater owners – and for good reason.

Netflix and Amazon are starting to act more like a studio, while the rest of the world’s studios are acting more like Netflix and Amazon.

Where once they were seen as services that hid their lack of quality content through clever algorithms that promoted a handful of good things to watch, both are now serving up homemade award winners. 

The Amazon Studios-funded Manchester By The Sea brought a brace of Oscars and a Golden Globe win in 2017; The Crown rightly deserved two Golden Globes for Netflix then there’s the 91 Emmy nominations it garnered. Four years ago, Netflix found itself with just 14.

For Amazon Studios, Manchester By The Sea was an Oscar winner.

Where once Netflix and Amazon were seen as the plucky underdogs with limited ambition, they are now beating the rest to Prime fodder, have real scope and in Netflix’s case over 100 million subscribers. 

Take Amazon for instance: it bet $1 billion on the rights to the Lord of the Rings TV franchise in 2017, outbidding HBO and (surprise, surprise) Netflix. In 2018, Netflix will be going for breadth with 80 original films in production. That’s almost two releases a week, not even taking into account the TV shows it is set to make. 

The scope and scale of these two companies is simply unprecedented in Hollywood.

The future’s Bright

Netflix isn’t too bothered about budget, either. Martin Scorsese’s The Irishman is set to cost over $100 million and recent original movie Bright – starring the not-cheap Will Smith – reportedly cost $90 million. 

Despite lukewarm critical reviews, Bright has proved that Netflix’s original push is working. Although Netflix is always coy about numbers, metrics firm Nielsen reckons that around 11 million people in the US streamed Bright over its opening weekend which should make Netflix will be extremely happy. And happier still that this was bettered by the second season of Stranger Things.

The problem is, Netflix needs more Brights and Stranger Things, many more, if it’s truly going to succeed, as does Amazon. 

Those cogs clicking into place for Disney could prove the undoing of the two current streaming giants in 2018 and beyond.

Disney already revealed that it is to take its content away from Netflix when the current contract is up, which leaves a massive Mouse-shaped hole to fill. Netflix is choosing to fill this hole up with original movies, shows and lots of them.

This is strange place the streaming world finds itself right now. Netflix and Amazon are starting to act more like a studio, while the rest of the world’s studios are clambering to act more like Netflix and Amazon.

Stranger Things: Season 2 was a massive hit but more of these is needed for Netflix to truly succeed.

This, for both parties, is a huge gamble. For every Stranger Things-sized hit, Netflix has expensive flops like Marco Polo. Amazon has had much critical success with Transparent and Red Oaks but it’s not had as much success as Netflix. 

Even with its Amazon Original Series pilot program acting as a great testbed for new things, paying an (albeit unconfirmed) $80 million for Woody Allen’s forgettable Crisis in Six Scenes, scrapping the much-hyped Z: The Beginning of Everything after one season and paying well over the odds for The Grand Tour, regardless of the strange draw middle-age men doing silly things with cars has, has meant that Amazon has had to have a rethink – hence going big on the Lord of the Rings rights.

Big changes in 2018

Netflix and Amazon and their refreshing distribution model is here to stay but expect a shift to happen in 2018. Netflix spent a cool $6 billion on original content in 2017 (a number set to rise to $8 billion in 2018) and a billion promoting that content. But hardly any of that money was spent in pushing its original movies at the beginning of their launch window. 

Unlike a theatrical release which is advertised through massive billboards, boundless TV activity and the like, Netflix’s new content lands on the site with very little fanfare. 

Bright prove that this risky way to release is the right way. But as more original movies land, Netflix has surely got to start figuring out a way to promote these as what they are: tent poles on which its success will surely rely. 

Just letting them suddenly appear on the site (its TV shows not so much but it’s films are given short shrift) without a systematic campaign to back them up will surely end in disaster.

Disney could prove the undoing of the two current streaming giants in 2018 and beyond.

Netflix itself rates this new content enough to put up the prices of its service in 2017, explaining in an email to its users that the price rise means it “can add more of what you like to watch. Awesome entertainment built around you is what we’re all about.” So, it better make sure those films are looked after.

Prime Video is still finding its feet as a streaming service and burying it within Prime hasn’t helped it stand out. But it has had a lot of positives in 2017. Big movies such as Arrival, Moonlight and Spotlight all came to the service early but again with little fanfare. 

Expect this to change in 2018 with the spectre of Disney’s Fox buyout looming large on the horizon – both Amazon and Netflix will be shouting about their wares to make sure they don’t lose their subscribers. 

2018 will be the year of original content. Amazon and Netflix know this, but now so does Apple, so does Disney and so does Hulu. 

We already know Netflix and Amazon are looking to do it bigger but it will be the one that does it better that will truly win out.