Netflix is continuing its tradition of scaring the pants off Hollywood executives. On the heels of its announcement it will be producing a sequel to "Crouching Tiger, Hidden Dragon," the content-streaming monolith revealed it will be making four movies with Adam Sandler.
To say that this is sending shockwaves throughout the film industry would be an understatement, and it doesn’t stop there. This deal could impact the way content is distributed across the board.
Cinema chains are already threatening to boycott the "Crouching Tiger" sequel, and it’s safe to say they weren’t jumping for joy when the the news broke that Sandler’s Happy Madison Productions would be developing films with Netflix. It’s no wonder Hollywood is so worried.
Pundits are already predicting this could lead to the demise of movie theaters, which seems a little dramatic. Adding four more films to the thousands of options already available on Netflix shouldn’t be enough to doom an entire industry. At least at first.
If the venture is successful, it will certainly encourage other producers to follow Sandler’s lead. It could lead to the biggest sea change since Hollywood abandoned the studio system.
For content creators, it means there is now a way to get your product to the masses without having to deal with a middleman to get wide distribution. Any content producer that strikes a deal with Netflix has instant access to its more than 50 million subscribers. Reaching that kind of market without having to strike a distribution deal should be enough to interest anyone who produces for film or TV.
The question now becomes whether or not this new model can work. According to recent history, it certainly can. Netflix has already had success with producing its own content on a smaller scale. Hits like "Orange is the New Black," "Lilyhammer" and "Hemlock Grove" have already proven original series can attract enough subscribers to sustain the production of multi-season, serialized shows. Given Adam Sandler’s established success on Netflix, there’s no reason to think that success can’t carry over to film.
As for movie theaters, it’s time to recalibrate the business model. There will always be a market for people who want to spend a night out at the movies, but when a ticket, a bucket of popcorn and a soda costs almost as much as a month of Netflix, there’s a problem.
Regardless of how this turns out, Netflix is here to stay. Movie theaters need to stop pointing fingers and start innovating immediately. Advertisers really don't like investing in ads that nobody will see.