Op-Ed: How The Streaming Wars Are Changing What You Watch

Blockbusters are finally coming back to theaters. But the buzz is elsewhere in Hollywood. Streaming services are shaking up the traditional model of the film industry and consolidating power just as the big studios in Hollywood did during its heyday of the 1930s.

AT&T splits from WarnerMedia to merge it with Discovery, forming a giant content conglomerate. Amazon acquires MGM and its library of thousands of movies, TV shows and James Bond. And rumors of other mergers swirl around.

Most viewers will have noticed these changes upon learning that they need to sign up for another streaming service in order to watch Marvel’s latest entry (Disney +), the “Friends” reunion (HBO Max), or the new movie. by Mark Wahlberg (Paramount +). The so-called streaming wars are radically changing the way studios compete with each other. As the power to produce and distribute movies online consolidates under the control of a few select companies, this shift will reshape what is done and seen.

Consumers are seeing an explosion of content coming from streaming platforms like Netflix, Hulu (owned by Disney) or Amazon Prime, and many have thankfully cut their cord in the past decade. But these platforms are gradually limiting the content they offer to what they produce themselves.

At this point, about half of Netflix’s shows are original shows; it expects to spend $ 17 billion on content this year. Likewise, Disney investors are pressuring the company to create a plethora of content, including dozens of Star Wars and Marvel properties.

From a traditional consumer value perspective, the audience wins: Streaming subscriptions typically cost less than traditional cable plans, while still providing access to a wide range of titles as libraries consolidate. But the market is very different from the point of view of smaller competitors: independent producers and distributors such as A24, Neon and Kino Lorber.

Small producers have always had to fight against the big studios to show their films. But they also relied on a strong independent theater market to help them break through. “Moonlight”, “Tangerine” and “Parasite”, for example, first built their audiences through word of mouth before becoming major theatrical hits and eventual winners.

This arrangement was supported by producers and exhibitors who wanted these films to be financially successful. Even when studio subsidiaries like Sony Pictures Classics distribute auteur films, they have to compete on the same ground.

In streaming, however, the move to a subscription service is shaking up this dynamic. Once a movie is on the site, Netflix doesn’t necessarily go to great lengths to ensure audiences get to watch it, and it often “bury” licensed movies to prioritize its exclusive content.

While co-founder Ted Sarandos claims that a Netflix hit earns “a billion dollars at the box office in terms of cultural impact,” when was the last time someone mentioned, say, “6 Underground ”or“ Thunder Force ”? Or go to the Amazon Prime Video homepage and see how hard it can be to find Barry Jenkins’ highly acclaimed series “The Underground Railroad”. The new goal seems to hope “Game of Thrones” type hits, with the rest of the content as just an arbitrary fill.

It may sound like a bad business plan, but the strategy is to force competitors out of the market. Netflix has overtaken all other potential distributors – paying $ 30 million for the indie drama “Malcolm & Marie” and over $ 400 million for the sequel to “Knives Out”. – although it’s not clear if these films can actually earn this much in returns. But what Netflix gets is one less competitor who could potentially enjoy these movies or produce movies that distract audiences from Netflix, even for one night.

This power also allows Netflix to dictate creative possibilities. Joshua Glick described how Netflix turned the documentary market upside down, pushing filmmakers to take a less political ‘story first’ approach. Production teams must adapt to Netflix’s decision to ban Hollywood’s most popular digital cameras from its productions, which has led to numerous complaints of fuzzy cinematography. And perhaps most important is how Netflix set up a precarious work dynamic, paying creatives higher fees to run shows for two seasons before abruptly canceling them. Lots of people could work for other studios, but as the streaming giants dictate more decisions, they have no choice but to line up.

The new dynamic of streaming has also introduced new complications in the way Hollywood pays for its talent. Due to a lack of direct box office revenue, top box office talent rarely ends up sharing the profits and the residue, and Netflix’s arbitrary audience data – based on just two minutes of viewing – has created more confusion about which movies are really successful. This uncertainty could scare off potential cinema financiers while forcing top talent to tie up with proven studios and franchises rather than pick their own projects.

Skeptics will say that independent filmmakers are scrambling, as they always have. But it gets harder when digital distribution – and the need to access these major platforms to make any profit – strangles the industry. Giants like Netflix are in a good position to control what movies are made and how, without necessarily tracking consumer preferences.

But antitrust offers a solution. For more than a century, the United States has used antitrust laws to break down or curb monopolies that strangle competition. It’s time to determine whether the streaming giants should divest their film production divisions and operate exclusively as online operators.

While it may sound drastic, history has proven it when the landmark 1948 US v.Paramount Pictures case, and subsequent consent decrees, forced studios to part with their movie channels and shut down. end to their unfair contractual practices with independent cinemas. The end of the studio system allowed studios and independent producers to compete simultaneously, creating a mix of blockbuster shows, social dramas, foreign art films, teen films, and ultimately 1970s New Hollywood.

President Biden establishes a strong antitrust agenda and Lina Khan, the new chair of the Federal Trade Commission, is rethinking how to frame competition. They have the opportunity to expand their focus beyond Big Tech and into Hollywood.

The old Paramount case consent decrees expired in 2020, but consolidation in the Hollywood streaming landscape is creating an anti-competitive market as pernicious as the dominance of Google, Apple, and Facebook in digital infrastructure.

Federal and state regulators are suing Google, accusing it of abusing its market power, and some are discussing how a disruption could restore competition. Shouldn’t Netflix face the same scrutiny?

Peter Labuza teaches the history of film and the media industries at San Jose State and UC Berkeley. He is currently writing a book on the history of entertainment law firms in Hollywood.

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