How Netflix is shaking up Hollywood’s traditional Oscar model

With its stark black-and-white depiction of Mexico City in the 1970s and the savage government crackdown on student protesters, Roma opened up mainstream US moviegoers to a cinematic world rarely captured in Hollywood masterpieces.

But more than just becoming the first Best Picture nominee for a film with the main character speaking the Mesoamerican indigenous language Mixtec, the Netflix original production directed by Alfonso Cuaron has turned the movie business on its head.

In conventional showbiz, the best movies were awarded Oscars, and the best television programmes scored big at the Emmys. Yet with the advent of online streaming for on-demand film content, the distinction between the silver screen and the tube has become fuzzy.

Earlier this month, Steven Spielberg reaffirmed his commitment “to give audiences the motion picture theatrical experience” in remarks that many observers considered a jab at Netflix, the latest titan to join the elite Motion Picture Association of America (MPAA) lobbying group.

“Joining the Motion Picture Association further exemplifies our commitment to ensuring the vibrancy of these creative industries and the many talented people who work in them all over the world,” Ted Sarandos, Netflix chief content officer, said in an MPAA statement in January.

The media-streaming service, with subscription-based offerings increasingly dominating the industry, blew up the traditional Oscar arrangement this year. It briefly released some of its best feature-length streaming content, including “Roma,” “The Ballad of Buster Scruggs”, “Mowgli”, and “Bird Box”, in a small number of cinemas in Los Angeles and New York City before their online releases. 

At Hollywood’s Dolby Theatre on Sunday, the 91st Academy Awards, commonly called the Oscars, will highlight the unprecedented number of accolades for a Netflix original film. The nominees were announced January 22, with “Roma” tied for the most nominations with “The Favourite” at 10 each.

Alfonso Cuaron, left, during the Roma screening and live streaming Q&A event at Bugis Plus in Singapore [Ore Huiying/Getty Images/Netflix]

“All of the major pundits at Gold Derby are 100 percent in for Roma,” said Sasha Stone of Awards Daily. “That is quite a stronghold. Either they will all be right or all be wrong.”

Netflix hired a leading strategist and spent some $25m to promote Roma, which cost only $15m to make. Disney, Black Panther; Warner Bros, A Star is Born; and Universal, First Man have also invested heavily to give their own Best Picture nominees a competitive edge.

From House of Cards to Beasts of No Nation

Despite theatre chains protesting against Netflix’s gambit to qualify for Oscar glory, this year the theatrical earnings for Best Picture nominees were the highest since 2010, a combined North American box office total of more than $1.3bn. However, that figure excludes the relatively small amount generated by Roma, as Netflix, Inc does not publish information on how its films perform financially. 

Netflix, with around 140 million paying subscribers worldwide, is modifying its business model. Although the cinematic releases were limited and not intended to generate revenue, the move served to increase the company’s Oscar chances and also signified flexibility by the Los Gatos, California-based entertainment firm to adapt to the market.

Netflix, which released about 80 films in 2018, has become a content powerhouse rivalling some of the top movie studios. It reportedly has even floated the possibility of buying a theatre chain.

A general view of the atmosphere during Netflix’s See What’s Next event at Villa Miani on April 18, 2018, in Rome, Italy [File: Ernesto S Ruscio/Getty Images/Netflix] 

Though the company originally began in 1997 with DVD rentals, its 2007 pivot to online streaming paved the way for a massive international expansion. Then, in 2012 the company began its foray into content production with the TV series “Lilyhammer”. Among its earliest TV hits were House of Cards and Orange is the New Black. Later, popular series included Narcos, Master of None, and The Crown.

The war drama Beasts of No Nation and the political documentary, The Square, were among the earliest Netflix original films to receive critical acclaim.

Gabriel Rossman, a sociologist at the University of California, Los Angeles who studies the film industry, said that Netflix originally changed direction because they were “paying a lot for licensing and renewals”. He explained that once the “studios started asking for more royalties, then [Netflix] shifted from a ‘buy’ decision to a ‘make’ decision”. 

Rossman said Netflix “basically created a premium cable channel with a business model not that different from what HBO has been doing”. He added that the subscription-based similarity makes HBO the closest competitor to Netflix, although the latter does not rely on cable providers. HBO Now, a subscription video-on-demand service, closely approximates the Netflix approach – as opposed to HBO Go, which requires a cable subscription.

The mass media expert speculated that in the long run, Netflix could hurt traditional studios, competing for talent behind and in front of the camera. But with so much more production capacity, Netflix is a boon for TV writers who benefit from any new studio willing to consider content pitches. Meanwhile, the price of production continues to climb.

In 2017, Manchester by the Sea, by Amazon Studios – another upstart player in the industry – received six Oscar nominations and won two. Although Netflix and Amazon are branching out into original film production, they are both more focused on TV. Hulu, for its part, could potentially enter the Oscar world later on, but for now, has not made the leap.

And the winner is:

Going forward, Netflix may have much more to fear from planned new online streaming services offered by Disney, Comcast, and Warner Bros, than from any future attempts by the Academy of Motion Picture Arts and Sciences to restrict Oscar entry. 

Rossman, the UCLA professor, told Al Jazeera that the National Association of Theatre Owners could enact rules that would cement the exclusive 90-day “release window”, thereby hurting not just Netflix, but also independent films that have also become more recognised by the Academy Awards in recent years.

In any event, some recent studies suggest that, contrary to the claims of Netflix critics, frequent moviegoers are often also the most routine consumers of online streaming services.

Netflix has started moving away from its “day-and-date release” strategy of simultaneously making content available on every platform, signalling its willingness to abide by the traditional order of initial cinematic release followed by releases on other platforms.

Anne Thompson of the trade publication IndieWire, told Fortune Magazine that Netflix has groomed several Oscar contenders purely as a “branding benefit” for the company.

Regardless, many industry professionals predict Roma and Netflix will win big this year, and 2019 could be the first time a foreign film wins Best Picture.

If so, the golden statues awarded on Sunday evening could work wonders in bestowing industry credibility upon Netflix, no longer much of an outside player in Hollywood.

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