Why major US movie studios are pulling off from Netflix.

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In case you missed it, it’s been a long time since Netflix was just a streaming service.

Founded in 1997, its business model was mainly focused on DVD sales and rental, but a year later Reed Hastings (Netflix’s founder) dropped DVD sales to focus on the DVD rental by mail business. In 2007 the streaming service was launched and it rolled out to 160 countries as of January 2016.

One of Netflix’s key moments takes place in February 2013, when they debuted their first original series. 13 episodes long, starring acclaimed actors Kevin Spacey and Robin Wright, produced (and partially directed) by renowned filmmaker David Fincher, House of Cards quickly became an international sensation and the first of a long series of “Netflix Original” content.

And although there are some turds in their original catalog (see the recent War Machine starring Brad Pitt), there is a very long list of critical and commercial successes (series such as Orange is the new Black, Sense8, Narcos, Black Mirror, Stranger Things, Marvel’s DareDevil and Jessica Jones; feature films like Beasts of No Nation and Okja to name a few).

Recent productions have attracted major talents such as Will Smith, Robert Redford, Tilda Swinton, Jennifer Jason Leigh or Jake Gyllenhaal.

Last week, Disney announced their intent to launch their own streaming service in 2019 (à la HBO Go). This means that the current deal with Netflix that allows the platform to stream hit franchises such as Star Wars and Pirates of the Caribbeans, but also the whole Marvel MCU catalog (Iron Man, Avengers, Guardians of the Galaxy, etc.), is coming to an end.

A few days later, 20th Century Fox revealed they were considering a similar move.

It’s evident that studios are looking to cut off the middle man and make a bigger profit by distributing content themselves. However, the biggest development is the fact that Netflix is not just a partner anymore.

They are competitors.

And as always, consumers will have to chip in, waiting for the dust to settle while retaining access to their favorite content. Or revert back to downloading for some.

 

Edit August 18th, 2017

The Wall Street Journal is reporting that Apple will invest approximately $1 billion in acquiring and producing original TV shows over the next year. The investment could result in as many as 10 new shows, a source told the publication, with the iPhone-maker looking to match the high-quality output of networks like HBO.

Author: Nicolas Vanderseypen

Nicolas joined Isobar in 2007. Since then, he followed closely the (r)evolution of the digital landscape, eager to keep Isobar ahead of the curve. While focused on building relevant ecosystems and experiences for clients and their consumers, he is also aiming to build a cheerful team, that feels at home at the agency. He is a strong believer of "phygital", that magic sphere where physical meets digital, where a user experience is enhanced, rendered seamless through technology and digital.

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