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James Schamus Calls Streaming Algorithms a ‘Garbage In, Garbage Out Model’

The former distribution executive has been following the streaming world closely, and isn't sold on every aspect of it.

James Schamus

James Schamus

Jamie Simonds/REX/Shutterstock

James Schamus has been through many career stages. For 12 years, he ran Focus Features, bringing the sensibilities of a veteran independent producer and cinephile into the studio arena, where he shepherded along revered arthouse hits ranging from “Eternal Sunshine of the Spotless Mind” to “Brokeback Mountain.” Focus owner Universal fired Schamus during a period of restructuring for the company in 2012, and he chose to avoid the same path for his next move.

“After I got fired, I made a very conscious decision not to keep my status, figure out how to get my ticket to the Academy Awards, or attach myself to all these projects as an executive producer so I could be on the red carpet,” he said, during a public conversation at the 10th annual GlobeScreen Conference in Manhattan on Wednesday night. “I decided to take the smallest financing deal that I could. It was hard.” He turned a lot of offers. “Most investors said, ‘Let’s start a new studio.’ A lot of this was coming out of Asia. I ended up convincing people to do a deal that was a tenth percent of the deal I wanted to do.”

With his production company Symbolic Exchange, Schamus refocused his attention on smaller productions. “I wanted to go back and make super low-budget films,” he said. “I had no interest in going back to the Oscars for a while. I’d been there 25 years. I just wanted to work with first and second-time directors on extremely low budgets, below union rates.” One of these was his own directorial debut, an adaptation of Phillip Roth’s “Indignation,” which Summit released after its 2016 Sundance premiere. Another was Kitty Green’s innovative true-crime documentary “Casting JonBenet,” which was picked up by Netflix at Sundance, providing the veteran distribution executive with a new perspective on the intricacies of the streaming platform.

While Focus Features titles received traditional theatrical releases, “Casting JonBenet” simply showed up on Netflix in April 2017, so Schamus decided to run an experiment to figure out how much the platform was promoting the title. “This was our world premiere. It was launched everywhere,” he said. “We had some people take pictures of their TV screens. In some cases, the entire landing page would be this image of ‘JonBenet.’ Other people would have a smaller banner. The people would have to scroll down to new releases. Other people would have it under documentary. There was no rhyme or reason to it, because it was all A/B testing.”

Schamus was confident that A/B testing — meaning that developers utilize multiple options to see which version is the most popular — drove the bulk of Netflix’s strategy, and wasn’t thrilled by the approach, since it could lead to reverse-engineering new content. “That’s the garbage in, garbage out model,” he said. “This is what worries me a little bit about what’s happening at these companies. They’re starting to believe their own nonsense.” He added that the figure on a Netflix page that suggests how likely a viewer would watch a certain title was arbitrary. “When it recommends something to you as a 78 percent match, the algorithm is saying, ‘Let’s A/B test 78 percent to 82 percent to see what they go for,’” he said. “They’re actually testing at that level. That’s how creepy it is.”

For Schamus, the upside of Netflix’s data-driven model was that it could actually provide new insights into viewer behavior around the world. “They will tell you there’s no such thing as a demographic,” he said. “There is a housewife in Brazil who loves documentaries just like the teenager in Palo Alto.”

Schamus acknowledged that Netflix has supported some major titles in recent years, referring in-house productions like “Okja” and major festival acquisitions like “Mudbound” as “the exception that proves the rule.” Unlike many of the smaller titles lost on the platform, “these are bright, shiny objects,” Schamus said. He noted that both Netflix and Amazon had inflated the market for independent film. Both Amazon and Netflix would routinely acquire six-figure international and domestic licensing fees. “Netflix would backstop small distributors, grab those streaming rights, and in package deals there would be all those aggregators working under a lot of the films you guys viewed and supported,” he said. “Those license fees have probably been cut by 90 percent in the last year and a half, two years.” That meant that if Netflix was acquiring new films, filmmakers aren’t always guaranteed a profit.

Schamus has spoken of doom-and-gloom scenarios for the medium before — in 2014, he declared that “cinema is dead, and you all know it” — but these days, he’s more optimistic. “When I was fired, people were like, ‘Oh my god, it’s the end of an era,’” he said. “Really? Even within the last three or four years — look at the Oscars, look at all these great independent films doing well at the box office and winning awards. It just reorganized itself. That being said, I really don’t know how it’s being reorganized right now, so don’t ask me.”

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