These executives are looking at some tough box-office numbers for their movies and pointing the finger at Netflix, which for the first time this year has dived into a prestige-film pool at which it once only sunbathed. The subject was on the mind of many industry leaders at the New York-based Gotham Awards earlier this week (where Netflix films were very much in contention). One even had a word for it: the “Netflix Effect.” As in, "it’s really difficult to open movies because of the Netflix Effect.”
Netflix, as your queue might already tell you, is going hard on the prestige-film business this year. That business is characterized by movies of a more distinguished pedigree, which come out in the fourth quarter in the hope of landing awards and critical attention, and thus eyeballs. (For the purpose of this story we’re counting such films from both independent firms such as A24 and studio specialty divisions such as Fox Searchlight, but not the big studios, which operate at a different budget level and barely make these movies anymore anyway).
In past years, Netflix had one or two such titles: “The Meyerowitz Stories," “Mudbound,” “Beasts of No Nation." But this year, the streamer is really going for it, financing, producing, distributing, campaigning for or otherwise getting involved with some of the most decorated filmmakers around. It has hired a large staff, including one of the most respected award consultants around.
The company has already released five such films this quarter, including Tamara Jenkins’s fertility dramedy “Private Life” and Paul Greengrass’s far-right thriller "22 July,” with Alfonso Cuaron’s awards front-runner "Roma” still to come. And that’s yielding what rival executives say is a certain effect.
The hypothesis is basically this: Because Netflix is now releasing these kinds of movies and then making them available to us in the convenience of our homes, it’s deterring us from doing what we’ve long done, which is come out and pay for similar movies in theaters.
Essentially, it’s a cannibalization argument. Netflix may be nobly investing in these movies. Greengrass, who also made “Captain Phillips” and “United 93” but switched to Netflix for his latest work, said at the Gothams that Netflix is showing “tremendous support of difficult films.” But the availability of these kinds of films at home helps ensure that people don’t want to leave it.
It’s as though everybody is a press person with access to their own online screening room. And we know how often those freeloaders pay for movie tickets.
(It should be noted that Netflix is releasing a few of these movies in theaters. But don’t be fooled by the headlines — the releases are of very limited scope. The company continues to hold to a principle that films should be on its service before or at the same time as theaters, a proposition most theater chains resist.)
If the argument of a Netflix effect is true, it would give the lie to the idea, put forth by the streamer and its filmmakers, that it is adding to and enhancing the market. In fact, it would make the opposite case: that these films could push the companies that have been making these movies for years to the economic brink.
The question is, is the contention really accurate? Are people less likely to come out to new upscale movies because titles of similar quality are suddenly available on Netflix?
A look at the data shows it could be — but with some qualifiers
Last Netflix-lite year, the number of fourth-quarter prestige releases to land in the year-end top 100 for domestic box office was high: seven. Each of these films grossed at least $20 million in the U.S., a respectable number.
In 2016, that figure wasn’t as good, but it was still pretty strong: four.
And with just one month left this year, how many has 2018 brought? Exactly zero. Nada. Zilch. A good ol' goose egg.
Instead, this fall has been marked by a series of box-office misfires: Melissa McCarthy’s literary-forger story “Can You Ever Forgive Me?”; the gay coming-of-age story “Boy Erased,” with Lucas Hedges; addiction tale “Beautiful Boy,” with Steve Carell and Timothée Chalamet; Robert Redford’s bank-robbery movie “The Old Man and the Gun.” All received at least solid reviews, especially the McCarthy. Yet all have finished out of the top 100. No movie even reached $12 million in U.S. receipts.
There have been a few solid independent-minded performers in 2018 — Spike Lee’s “BlacKkKlansman" took in $48 million for Focus, and a Sundance conversation piece, “Sorry to Bother You," raked in a surprising $18 million, landing both in the Top 100. But both those films came out in the summer, before the Netflix barrage.
That this is all happening in a time of stellar box office makes the trend that much more noticeable. Box office receipts year-to-date are up more than 10 percent in the United States, the first time the sector has shown double-digit increases through the first 11 months in the past five years. But those gains are heavily driven by the franchise films of Marvel and Pixar, a business Netflix is not (yet) in. The business Netflix has gotten into now has competitors in the doldrums.
So this all feels persuasive of a Netflix Effect, right? Sure. But there are a few important caveats.
First, many of those hits last year rolled out in earnest after Dec. 1. And there are still a few that could follow in those footsteps this season: Oscar favorite “The Favourite,” which Fox Searchlight released to a limited number of theaters last weekend and which performed well, or “On the Basis of Sex,” the early-days Ruth Bader Ginsberg story still to come from Focus.
Also important is that it truly is impossible to prove that these movies are being hurt by Neflix titles. It’s instead plausible an acclaimed studio hit such as “A Star Is Born” ($191 million domestic), though different in tenor than these films, is cutting into these indies' box office by attracting some of the same audience.
And besides, we don’t actually know how many people are watching these Netflix titles, because the company stays mum on that topic.
(When this was pointed out to one of the executives at the Gothams, they said, intriguingly, it may not matter — just the fact that these movies are there may make some people feel comfortable not going out to theaters, like how having a gym membership is enough to make you feel you’re staying in shape.)
It seems the bigger question might not be whether these Netflix movies are having an effect, but more of, so what if they are? Is the idea of people watching movies on Netflix instead of coming out to see works of comparable quality in theaters to our greater cultural detriment? Or is it simply transferring movie-viewing from one venue to the other?
Few would argue with the quality of “Private Life” or “22 July," after all. So what if they’re being made or seen elsewhere? Sure, it’s disheartening to see impressive works like “Can You Ever Forgive Me?” being given a cold shoulder by audiences. But it’s also great that millions can now see “22 July” and “Private Life,” films that may not have even existed without Netflix, let alone been so readily viewable. Ditto, big time, for “Roma.”
And in the end it’s conceivable that these companies could make a comeback. It was just a few years ago when the theatrical documentary appeared dead because Netflix had invaded the market, buying or producing dozens of such movies, including the 2017 release “Icarus,” which went on to win the best documentary Oscar. Yet somehow this has been an exceptional year for theatrical documentaries, as films such as “RBG,” Won’t You Be My Neighbor” and “Three Identical Strangers” have all become some of the most successful in the history of the category.
When it comes to the film business, it is an verity that a company like Netflix will blow up the model. But maybe an even bigger truth is that the industry contains a certain cyclicality. Like a character actor campaigning during Oscar season, what goes around tends to come around.