Netflix (NFLX -0.50%) has recently invested in its content slate, thanking critics by producing films like Roma and The Power of the Dog. Conversely, the streamer has also backed films like Extraction and The Adam Project — Netflix Originals seemingly more concerned with stars and stunts than awards.
And while streamers have touted The Irishman and other prestige content as key to attracting and retaining subscribers, shows like 6 Underground and Spenser Confidential are just as important, even if they’re rated less by critics.
Netflix competes in a different arena than other studios
Warner Bros. Studios like Discovery and Walt Disney typically release films theatrically before making them available to streaming audiences. There were some concessions during the COVID-19 pandemic, but the box office model is back in 2022. See the article : UVA Center for Politics teams up with Charlottesville activists in the movie Martinsville Seven. Films like The Batman and Doctor Strange in the Multiverse of Madness had theatrical runs, generating worldwide grosses of around $770 million and $955 million respectively. million, respectively.
Netflix also returned to US theaters this year, notably with the spy thriller The Gray Man. The film opened in approximately 450 theaters on July 15, a week before it arrived on Netflix’s streaming service. To date, The Gray Man has brought in around $250 million in global box office receipts. For a film that cost almost $200 million before marketing, such results would normally be considered a failure. But this is Netflix: its primary audience is streaming subscribers. And from that perspective, The Gray Man is a huge success.
Reviews matter less for streaming movies
The Gray Man amassed 88.5 million hours watched in its first three days on Netflix. By comparison, members of the action-centric Netflix Original Red Notice watched nearly 149 million hours in its first three days on Netflix and currently holds the record for the company‘s most-watched movie of all time. But perhaps most curiously, both films have been widely panned by critics: Rotten Tomatoes gives The Gray Man a critical score of 48%, while Red Notice has a lowly 37%.
When looking at theatrical releases, major studios typically rely on positive reviews to gain audiences. After all, people choose to go to a theater to see the latest release, so it helps to know in advance whether it’s really worth it. Read also : How to Audition for Amazon Prime Video. That’s why it’s not uncommon to see marketing messages on opening weekends touting a film as “Certified Fresh” — distributors are telling moviegoers that Rotten Tomatoes has found the majority of outstanding critics like the film.
Netflix viewers don’t have to leave home to watch the latest Netflix Originals. And if they don’t like it, they can easily turn it off. This low barrier to entry means that even for movies with bad reviews, the cost to subscribers is not the same as those who go out to catch a movie.
And many might like a critically acclaimed film — as is the case with The Gray Man, which has an audience score of 91% on Rotten Tomatoes, and Red Notice, which sits at 92%.
Netflix is letting subscribers decide what’s worth watching
Considering the amount of money other studios make from theatrical releases each year, Netflix may be missing out on a lot of potential revenue by not going after that market more aggressively. On the same subject : Why Is Everyone Talking About Netflix Stocks?. However, by treating theaters as an occasional dance party, the company is limiting its exposure to the risk of a critically panned film dragging down its bottom line.
A famous example of this is Walt Disney’s John Carter, a 2012 sci-fi film that cost the company more than $360 million in production and marketing costs. When it was released, it was poorly reviewed and achieved a relatively poor audience. Things ended so badly for the film that Walt Disney withdrew $200 million associated with the effort.
For Netflix, the benefit of being focused on streaming is that subscribers can decide for themselves whether something is worth their time, even if critics don’t love it. And so far, the results are promising: Both Red Notice and The Gray Man are getting the franchise treatment, which helps the company compete against its streaming rivals.
Tom Wilton has a business relationship with Netflix, but has no financial position in the aforementioned stocks. The Motley Fool has positions and recommends Netflix and Walt Disney. The Motley Fool reports that Warner Bros. Discovery, Inc. recommends and recommends the following options: Long the January 2024 $145 at Walt Disney and Short the January 2024 $155 at Walt Disney. The Motley Fool has a disclosure policy.
Tom Wilton has a business relationship with Netflix, but has no financial position in the aforementioned stocks. The Motley Fool has positions and recommends Netflix and Walt Disney. The Motley Fool reports that Warner Bros. Discovery, Inc. recommends and recommends the following options: Long the January 2024 $145 at Walt Disney and Short the January 2024 $155 at Walt Disney. The Motley Fool has a disclosure policy.
