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by Indiewire
November 6, 2013 11:25 AM
11 Comments
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Attention, Ted Sarandos: Indie Distributors Have Something to Say To You

Alamo Drafthouse

Matt Grady, Factory 25

There should be a separate conversation for Hollywood/big budget films and Indie micro-budget films concerning Netflix and Theaters. Out of all of the Digital/VOD outlets, I do believe that only Netflix could negatively effect Box office of Hollywood level films.

On the indie film level, releasing films Day/Date isn't such an issue as  people have developed habits on how they watch films and certain people will go to theaters and others will not, while some will watch on Cable VOD and others on iTunes or Fandor or Amazon or Netflix and the list goes on...I look at getting movies on Digital/VOD in a similar way as I look getting vinyl LPs into local record shops, try to make it available everywhere knowing that some shops/outlets will only sell a couple copies an others will sell many more with out much crossover in clientele. Also, since press outlets are only likely to cover a film once, having a multi-platform release is really best for films, allowing the film will be available while awareness is at a high.


Tim League, Drafthouse Films, Alamo Drafthouse Cinema

First, let me preface my statement by saying that I respect Ted Sarandos greatly and am a fan of what Netflix has built.  That said, his comments feel a bit unfair.  He's asking theater owners to open up non-exclusive windows while at the same time making massive investments on exclusive window content for Netflix.  It's not really kosher to shame the theater industry for clinging to exclusive windows and then shift massive resources to develop exclusive window content for Netflix.

That said, I do wish more theaters would be open to supporting day and day releases for indie films. Alamo Drafthouse is one of the few exhibitors that supports the idea of day and date and even ultra-VOD windows.  I am a open to this for small movies by small distributors who don't have the budget for a massive national P&A spend.  We have proven that model can work for the right film.  For big movies with ample production and P&A budgets, however, Netflix doesn't have the customer base to offer a studio what they would need to sacrifice the revenue lost from theatrical exhibition.

I think Sarandos knows this isn't going to happen.  It might happen for smaller boutique movies, but not for THE HOBBIT or THOR. Ultimately the studios are going to make the decision that works for them and their investment.  With big budget movies being made for the worldwide market and that worldwide market being dominated by theatrical revenue (especially in Asia), I think the cinema industry is just fine.

If the studios ever develop a direct worldwide online subscription service for their content, then I think Netflix will be facing the same challenges as the cinema owners.  That is a scenario I could foresee sooner than Netflix doing a day and day release for the next AVENGERS movie.

People have been forecasting the demise of cinema since the advent of television.  It has been proven time and time again that cinema is not competing against home entertainment.  To paraphrase Ira Deutchman from his 2013 Arthouse Convergence Keynote address, a person make one critical decision on a Friday night: to stay in or to go out.  Cinema doesn't compete with the "stay in" options like Netflix, Redbox or even reading a good book.  It competes with dinner, bowling, rolling skating, going to a bar, etc, the "go out" options.  Provided the cinema industry can remain a fun and compelling option when compared to the "go out" options, we will remain a healthy industry.  Instead of worrying about what Netflix will do to our industry, I'd rather see NATO and all the big theater chains focus on our real challenge: make sure people have a fun time at the cinema.


Eamonn Bowles, Magnolia Pictures:

Theaters aren't going away and the economy for a large budget film premiering on Netflix isn’t really practical, so it's kind of a non-issue.

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11 Comments

  • Jon | November 8, 2013 3:40 AMReply

    So if he wants to help indie filmmakers, why does Netflix offer only a flat rate of $1500 to distribute their films. Any other platform offers usage based rates. Netfilx is the last place for indie filmmakers to see any profit.

  • Emile Meyer | November 6, 2013 2:59 AMReply

    I've been reading this topic ever since it was announced.

    My two cents, if I may:

    I'm from South Africa. Now, culturally, South Africa is a TV-oriented market, so that means that the majority of the people over here will more like than not watch TV than go see a movie. Don't get me wrong: people still go to theatres in droves to go watch the biggest blockbusters and support them, so there is a market here for theatres.

    However, over here, we normally get a movie two, three months LATER than most, except for films (read blockbusters) that carry a worldwide release date.

    Add to that, we only have two huge distributors who carry the monopoly and a large satellite TV network (read conglomerate) that gets to show movies and TV first. Lately, they've been airing new seasons of shows concurrent to their US release dates; their way of TRYING to curb piracy. In essence, we don't have much choice here, as Netflix and any other online streaming service cannot be accessed from our location. We also don't have smaller theatres run by independent distributors that has the ability to show us the more arty films. Well, we do have an arthouse cinema chain (only 3 of them left in the country, run by one of the two major distributors), but that's it. So, for South Africans, we don't have a lot of options, because if you don't have the money for satellite, you have to resort to going to the movies, renting/buying DVDs and TV shows, or downloading illegally, with the latter not being cool at all.

    My point with all this?

    It's great to have all of the options (and I'm not judging or envious of this), but what about the little guy who doesn't have these options, at all? It's a great debate to have about making films/content available on all platforms the day it releases, as it gives greater accessibility to all. It won't kill the industry at all as Mr. Sarandos suggested in his first keynote; it'll grow it more and give more people the chance to see and experience films and content that would go unnoticed between everything else that's more mainstream. I mean, in all fairness, every filmmaker wants his/her work to be seen by as many people as possible. As a filmmaker myself, I'd want that, too, however, my debate about this comes from a perspective where I live in a country that has options and isn't necessarily backwards in terms of culture (apart from other, more political things that still are), but who won't be able to benefit from this.

    Just my two cents... if I missed the plot (I tend to get overly passionate about things, film being one of them), then that's my piece. :)

  • Milan Matejka | November 6, 2013 9:09 PM

    I concur with this comment.

    Adding to the South African aspect, South Africa is improving in the sense that in the intervening years (give or take the fact I'm an ex-pat in the UK). Johannesburg has gained an independent cinema called The Bioscope and The Labia in Cape Town has been established for a while, there has not been a vast development in film culture. Is it the funding that is available? Is it audience interest? What may need to be attempted is to find a way to break through from the traditional system, but unlike the US or other Netflix countries, internet is still an issue with availability of fast systems and access to streaming options in the first place (hence the rise of Mobi, which only seems to exist in SA). The fact is that many of the cinemas in South Africa play the same thing, and in Joburg, it seems like they're all in malls very close by to each other (particularly it seems like if you're in the Northern Suburbs)

    I believe we will see a change when the infrastructure becomes more flexible and open to many, but then that might be a long road ahead for South Africa (though very achievable). Cheaper technology, future development, the sky is the limit if the politics doesn't get in the way of it all. We have to convince the South African public though, according to Box Office Mojo, only two South African film in the top fifty: Spud 2 and Klein Karoo. http://boxofficemojo.com/intl/southafrica/yearly/

  • Gary Meyer | November 6, 2013 2:29 AMReply

    OK Ted...can we do some marathons of HOUSE OF CARDS, ORANGE IS THE NEW and ARRESTED DEVELOPMENT in our theaters day and date with their Netflix releases?

    Interesting that they bought SQUARE but it won't go on Netflix until next year so it can play in theaters first and establish its Oscar worthiness.

    Will the Academy change their rules to allow simultaneous theatrical and VOD formats?

  • marie therese guirgis | November 6, 2013 1:39 AMReply

    There are plenty independent distribs not quoted here. IFC, A 24, Radius, Phase 4, Cinedigm, Strand, Music Box, Gokdwyn, Cinema Guild, to name some...

    I am not suggesting that the NYT review all digital/VOD only releases for the reason you state, too many. I am pointing out that theatrical is still the only way to get publicity, for the most part, and theatrical is expensive. Many films are being released theatrically only to secure VOD deals. Theatrical isn't going anywhere.

  • Robert Maier | November 5, 2013 9:11 PMReply

    As someone who recently experimented with opening a new art film theater specializing in indies and docs, I'm disappointed in seeing all the movies that go so quickly to VOD. Once with Netflix, they have years available. A small theater has just a tiny window-- maybe a week or so to promote a film and attract patrons who are so immensely distracted. It hurts when you book a new film, and your patrons say they'll skip it because they just saw it VOD. Small art houses may be the real victim who cannot compete, so except for maybe the 10 largest cities, no one in this country, at least, will never see a film on a large screen, with great sound, and the magic communication that goes on between a group of people watching a movie in a theater. And people do like the theatrical experience, let's just hope enough of them will postpone their desire to see a film, so smaller market art houses can stay afloat. Sorry folks, Netflix is a killer of a great art form of movie theaters. I wonder what percentage art film producers receive? Are they getting killed too?

  • Nice | November 5, 2013 8:02 PMReply

    I don't know Dylan Marchetti, but I love Dylan Marchetti. Definitely an astute observer.

  • Dylan Marchetti | November 5, 2013 10:49 PM

    Awww, thanks Mom!

  • marie therese guirgis | November 5, 2013 5:34 PMReply

    the most interesting aspect of this article is the great number of key independent distributors who would not be interviewed or quoted and why. it is just too tough to write a piece like this when no one wants to potentially alienate such a vital, successful and important business partner. Netflix is in some cases singlehandedly making it possible for distributors to continue to acquire and release movies.

    i always say that the 15 years i have worked in distribution, and now production, represent the biggest sea change in the movie industry since the birth of VHS. one of the biggest changes is that independent distributors can no longer afford to lose money on theatrical releases with the promise of making it back in ancillary. theatrical releasing has not gotten any less expensive really, even with the advent of digital projection.

    the biggest challenge we face is that the traditional media has not kept up with this massive sea change in how films are consumed. The NYT, for example, only reviews, as a rule, theatrical releases. They aren't reviewing on demand or digital premieres on a regular basis. In order to generate the kind of publicity that companies like Netflix benefit from and that VOD channels value, and in turn to generate consumer interest and eyeballs, the film, for the greatest part, has to be released theatrically, horror films and major cast driven films aside.

  • And | November 5, 2013 6:03 PM

    Any monkey with a computer mouse can release a film digitally...how could any paper review the thousands of films put out like that? Sooner or later there would have to be some sort of curation...that is what we have now from major festivals...and it is largely those films getting the limited theatricals and reviews...makes perfect sense....unless you have a better way. How exactly would you select which films get reviewed in NYT if there were 500 digital releases each month?

  • ed harken | November 5, 2013 5:59 PM

    not sure that there are many independent distributors left to comment - eamonn is pretty key - surprised john sloss didn't comment