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Netflix: Internet TV can "reinvigorate the film business"

18 Jul 2017 | Rasmus Larsen |

Netflix wants to reinvent the film business just as it reinvented the TV business. The company will release 40 movies globally this year and continues to grow rapidly, adding more than 1.7 million subscribers each month.

A century-old windowing tradition

Netflix has released its Q2 2017 earnings report, which confirms that the world’s largest TV service now has 104 million subscribers. The 100-million milestone was reached in April. 5.2 million subscribers were added in the second quarter of 2017 alone, and there are now more international than US subscribers for the first time.

Such a large base of subscribers gives Netflix leverage. Netflix has arguably already changed the TV business with its day-and-date global releases of full seasons. The company is now turning its attention to the film industry, which it believes is laden by “century-old windowing tradition”.

- “We understand that our approach to films - debuting movies on Netflix first - is counter to Hollywood’s century-old windowing tradition,” the company said. “But just as we changed and reinvented the TV business by putting consumers first and making access to content more convenient, we believe internet TV can similarly reinvigorate the film business (as distinct from the theatrical business). This year we will release 40 features that range from big budget popcorn films to grassroots independent cinema.”

Also read: Netflix takes aim at the film industry's theatrical window model

This year, Netflix will release 40 movies ranging from “big budget popcorn films” such as Okja, War Machine, and Bright to smaller titles, including productions that would likely never have made it to the big canvas. And it is doing all of this on a global scale to an audience that continues to grow.



Theatre owners take a hard stance

To fund its continuing spend on content, Netflix is taking on loans. In 2017, the company expects free cash flow of -$2 to -$2.5 billion dollars. However, as long as the loans convert into continued member and revenue growth, Netflix considers it sound business sense.

Theatre owners have taken a hard stance against Netflix, arguing that movies belong on the big screen. They fear that if Netflix and others manage to break down the release windowing model, theatres could lose exclusive access to new movies. The Cannes film festival recently banned Netflix’s streaming-only movies.

- “We premiered 14 new seasons of global Netflix original series, 13 original 2 comedy specials, 6 original documentaries, 2 original documentary series, 9 original feature films and 7 seasons of original series for kids,” Netflix added.

The world’s largest TV service just became a little larger but considering there are billions of TV viewers across the globe it appears that there is still plenty of room for growth.



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