Netflix, Inc. (NASDAQ:NFLX) and Amazon.com, Inc. (NASDAQ:AMZN) are the top buyers at the Sundance Film Festival so far, outbidding major movie studios for the first time in history. The two firms are proving that they are serious players in the film business.
As the 11-day festival reaches its midpoint, Netflix has already bought three films, while Amazon has purchased four films. Meanwhile, most of the traditional film distributors have not bought anything.
Last year, Netflix and Amazon both went home empty-handed, and some theorized that it was because some filmmakers might resist the idea of not having a broad theatrical release.
The tide has turned, however. Filmmakers are not clinging as tightly as they once did to the idea of getting huge box office numbers. Instead, many want their movies to be seen by as many people as possible, regardless of how they actually see it.
Netflix, Amazon ready to pay top dollar
One big reason for their success is the fact that Netflix and Amazon showed up with deep pockets and boundless ambition. For example, Amazon Studios managed to outbid big-name rivals such as Sony and Universal for Manchester By The Sea, an acclaimed film for which it paid $10m. They promised a traditional run in theaters so the film would qualify for all of the big awards.
Amazon also acquired several other films that have been getting a lot of buzz. These include Complete Unknown, Love and Friendship, and the documentary Author: The J.T. Leroy Story.
Amazon is known to treat its films the same way traditional studios do, with a theater release followed by awards campaigns. On the other hand, Netflix tends to release films in theaters and online at the same time. This approach has not been embraced by theater chains and film studios because it could affect award eligibility as well as the bottom line.
The head of Amazon Studios, Roy Price, said: “”For every movie that we do, we want as robust a theatrical run as the film will support.”
Meanwhile, Netflix paid $5m for the film Tallulah by Writer/Director Sian Heder. He told the New York Times: “You always want your film to be shown on a big screen with perfect sound and the best projection. But that’s not always the reality anymore. The way that people consume media is changing.”
Netflix’s original series such as House of Cards have taken off, and the firm plans to spend an impressive $6bn on content this year. This figure easily outpaces that of every other TV firm. For example, HBO only spent $2bn on content last year.
Netflix’s Chief Communications Officer Jonathan Friedland said: “We’re in the market for enjoyable films that have a great creative vision and that we can show to our members in 190 countries.”
Netflix bought three films before Sundance even began, including The Fundamentals of Caring, Tallulah, and Under the Shadow. The firm also set off a bidding war for the drama The Birth of a Nation, spurring Fox Searchlight to ultimately pay $17.5m for the rights in the biggest deal in the history of Sundance.
Streaming services showing strong growth
Investor’s Business Daily recently reported that Amazon’s video streaming subscribers exceeded Netflix’s. They based this on Consumer Intelligence Research Partners’ estimates of 54 million U.S. Amazon Prime members at the end of last year, although it should be noted that not all Prime members view streaming videos. Netflix had 44.7 million subscribers at the close of 2015.