Sarandos is amazed that the studios have hung onto their model for so long, holding back ancillary “windows” for DVDs, streaming, pay-per-view, and television so movie theaters could enjoy its 90-day exclusive. “The theaters can differentiate their experience with the consumers in ways we can’t compete with, and I wish they would,” he said. “Going to a movie should be like going to Disneyland, so you can have a great experience and a super-high-end night out.”
But even as exhibitors upgrade and reduce the number of theater seats, theater attendance has flatlined, and by mid-August, the 2017 box office was down by 4.8 percent. Studios are caught in a self-defeating spiral, Sarandos said: “People get more risk-averse when things don’t work. It keeps feeding itself until a bad week turns into a bad summer turns into a bad Christmas. It’s trying to remake the same thing and do sequels and a replay of the same model and ignoring the technology that’s available to help make customers happier and better monetize movies.”
The old guard is a talent farm. To run its movie division, Netflix hired former Universal co-president and studio producer Scott Stuber, giving him greenlight authority. He knows every agent and manager in Hollywood and boasts strong talent relationships, but his movie output to date is mainstream product like “Ted,” “Battleship,” “Role Models,” and “Safe House.”
“He’ll have a bigger canvas,” said Sarandos, who has combined Netflix’s indie and mainstream production units to groom rising talent. “They’re aligned in finding new projects to work on with each other. They’re not the specialty division, they are filmmakers making films for Netflix.”
One thing Netflix learned from its data was how well Adam Sandler did whenever they made his movies available, all over the world, often in countries where his dumb comedies were available only on video and never released in theaters. That’s one reason Sarandos reached out to make a deal with him. Netflix crunched the numbers for Sandler’s revenue streams and built a model of success, then offered him a guaranteed figure to acquire all rights — no gross participation. “The risk of that performance is on us,” said Sarandos.
When Netflix brought Sandler to Comic-Con Experience in Brazil to promote “Ridiculous 6,” audiences went crazy. Sandler’s global stardom has skyrocketed, a point not lost on the Hollywood agencies when Netflix comes calling. “It’s global relevance,” said Sarandos. “People want their work to manifest in the culture and be seen and appreciated, and we can do that like nobody else.”
The next major steps in Netflix’s Hollywood onslaught is Martin Scorsese’s $100-million gangster movie “The Irishman,” which starts shooting this month with Robert De Niro, Al Pacino, Joe Pesci, Bobby Cannavale, and Harvey Keitel. Steve Zaillian (“Moneyball”) adapted the screenplay from Charles Brandt‘s 2003 book, “I Heard You Paint Houses,” about hitman Frank Sheeran.
And in December, Netflix will release David Ayer’s expensive sci-fi fantasy actioner “Bright,” a dystopian mix of cop procedural “Training Day” and alien-inhabited “Men in Black,” written by Max Landis. Starring Joel Edgerton and Will Smith “playing the kind of Will Smith character we love to see,” Sarandos sat down with Ayer and Smith just before the release of “Suicide Squad” to convince them to go with the Netflix model. Again, Netflix bid against studios and crunched a $90-million deal based on the value of the project in all markets. (Sarandos does not confirm numbers.)
“‘Bright’ is a turning point in terms of the scope of the movie and the budget to be able to put together the deal with A-list talent,” he said. “It raises the confidence we could put it together again.”
Director Angelina Jolie, on the other hand, came to Netflix to pitch arthouse Cambodian-language drama “First They Killed My Father,” which is now heading for fall film festivals. “She had a very specific view of the story she wanted to tell,” said Sarandos. “It’s very traditional. It’s just as resource-intense to make a small film as a big film, where there isn’t much infrastructure in Cambodia. It would have been difficult to get made anywhere, with all local talent. It all pays off on the screen.”
For now, Netflix can afford to outspend its rivals. Sarandos works overtime to win over Hollywood talent and producers by showing them that as studio ambitions narrow, Netflix offers them freedom of choice. “Our goal is to create the environment for filmmakers to do the best work of their lives and connect with audiences around the world,” he said. “That model has served us and our members very well for TV and has helped to attract and retain subscribers. We are betting with great filmmakers, we can do the same with films.”
Cannes Film Festival
Netflix is chasing consumers all over the world as they try to build audiences. It saw 300 percent subscriber growth in 2016, and much of that came from overseas. “That’s where the population is that doesn’t use Netflix yet,” said Sarandos. “The ability to export great storytelling from anywhere to anywhere is the real opportunity, (like) finding Bong Joon Ho in Korea and giving him a bigger canvas to show what he could do. Filmmakers outside of America don’t usually have the opportunity to work with a big budget.”
Oscar-winning Plan B producers Jeremy Kleiner and Dede Gardner (“12 Years a Slave”) first chased down Bong, whose “Snowpiercer” was Korea’s biggest-budget movie to date. He sent them his original script with Jon Ronson about a Korean mountain girl’s threatened relationship with her super pig. It’s a strange polyglot: a message comedy that’s dead serious.
And at $50 million, starring Tilda Swinton, Jake Gyllenhaal, and Paul Dano, with shoots in Korea and New York, “Okja” didn’t come cheaply. Creating the title character required sophisticated VFX executed by Erik De Boer, who designed “Life of Pi” tiger.
While Netflix promised Bong a wide theatrical release in Korea, it could only obtain dates in 150 independent theaters — exhibition chains resisted for the same reasons they did in America and France. But thanks to its Competition launch in Cannes and high-profile, one-week theater showings in New York and Los Angeles (it played a second week in August at Quentin Tarantino’s New Beverly by popular demand), “Okja” built social media buzz. People watched it and liked it, all over the world.