Over the last year or so, Netflix has directly funded and produced a number of TV shows, alongside one-off programmes such as this week's new Aziz Ansari stand-up special. They've already suggested they want to get more involved in filmmaking, and this weekend a company spokesperson suggested they're looking to challenge traditional release patterns entirely.
In a speech this weekend reported by All Things D, Netflix's chief content officer Ted Sarandos explained "what we’re trying to do for TV, the model should extend pretty nicely to movies. Meaning, why not premiere movies on Netflix, the same day they’re opening in theaters? And not little movies - there’s a lot of ways, and lot of people to do that [already]. Why not big movies? Why not follow the consumers’ desire to watch things when they want?"
Some cinema owners immediately criticised Sarandos' proposal, although he responded with the observation that "theater owners stifle this kind of innovation at every turn".
With traditional box office still the largest source of revenue for most films, cinema owners have frequently opposed initiatives to challenge existing release models. The prestige of having 'first run' films months before home release is considered a vital part of cinemas' enduring success.
Although independent and smaller films are now regularly released on video-on-demand services alongside theatrical runs (with the likes of Curzon Home Cinema and the Irish Volta operated by the distributors and cinema owners themselves), Hollywood releases are still typically available on big screens several months in advance of home versions. This has led to a few notable conflicts. For example, a number of cinema owners managed to persuade Universal to stop a proposed trial where they would offer the crime-comedy Tower Heist on VOD soon after the cinema release for a premium price of $59.99 (approximately €43.60).
Many studios and distributors are also reluctant to let Netflix challenge theatrical or even DVD release patterns. While putting a film on Netflix provides them with addition income, it would be a fraction of the amount received from a cinema ticket or DVD / BluRay purchase. Early VOD releases are usually released at a premium price for this reason.
However, as Netflix's subscriber base and international markets continue to increase, their resources could soon pose a genuine risk to existing model. Netflix has already agreed to a costly distribution deal with Disney that will see the studio's films released on Netflix before their TV premieres. The deal will commence in 2016.