Netflix's recent announcement that it would premiere "Crouching Tiger Hidden Dragon 2" in a deal with The Weinstein Company--with or without any domestic theater play--was a significant advance for the non-theatrical film distribution model. The next step was clearly for Netflix to step into the studio role of producing and presenting not only original TV series but exclusive movies. Now the company is forging ahead with a more groundbreaking deal to finance and release four Adam Sandler movies from Happy Madison Productions. He can deliver them while he fulfills his current obligations.
Why is this a bigger deal?
1. This is a production, not acquisition deal.
Netflix, as it has done with its series "House of Cards" and "Orange Is the New Black," is making its deal directly with a content producer. These feature films will be made for Netflix, shown exclusively on their site for subscribers in all 50 countries in which they operate. These are movies made for and by Netflix, to be available free, exclusively, to anyone who is a monthly subscriber to the company. It appears if one wants to see them, Netflix will be the sole choice.
2. The deal is with a major star
Adam Sandler may not be one of the most respected or honored actors of our time, but until recently--he's been enduring a dip in box office of late--he has been one of the most successful. He has starred in 13 live-action films that have grossed over $100 million (unadjusted) over the last 20 years including "Grown Ups 2" in 2013. He shifted into indie gear with Toronto-premiered films from Jason Reitman ("Men, Women & Children" and Tom McCarthy ("The Cobbler"), neither of which was well-received. Though Sandler might not be at the height of his draw, he remains an A-lister, especially on Netflix, where his films are among their most sought out.
3. It gives Sandler more freedom
Netflix execs are smart, but they skip the layers of decision-makers and greenlighters and numbers crunchers that dictate big-budget Hollywood formula moviemaking that is designed to be risk-free and deliver returns on the tens of millions of marketing costs in the U.S. alone, as well as branded titles that will perform on opening weekend. Netflix films will likely cost less all around which will give Sandler and Happy Madison the opportunity to get more creative. Escaping from the studio content mills --as the likes of Steven Soderbergh and David Fincher are doing on Netflix and cable television--could be the biggest draw to other filmmakers to move from the traditional studio model.
4. It makes Neflix a legitimate player in feature production
Much more than the "Crouching" deal, this forces studios to face a nimble new competitor, gives agents an alternate venue for their clients, and starts to change Netflix from being perceived as something that is minor-league or second-tier. It's tough to find the first big star/producer/director to commit. It's much easier after someone else has taken the lead. This isn't going to be the last such deal, and expect more announcements soon.
5. It takes theaters out of the equation
Harvey Weinstein needs theaters, and will continue to need theaters for most or nearly all of his films. The "Crouching" deal made a feint towards wanting traditional (at least IMAX theaters) involved. Netflix is saying to theaters: "You aren't part of this plan, and we have one of your top draws." Sandler has theatrical productions lined-up through traditional distributors, and theaters will happily play them (just as they will play Weinstein's non-Netflix films). They need all the content they can get.
6. It could change the rules for movie criticism and awards
The Happy Madison/Sandler films aren't likely awards contenders in any case. His comedies are not review driven. But newspapers, magazine and other media used to covering movies on their release in theaters may need to start adjusting (the old model followed by the New York and Los Angeles Times involves reviewing 25-30 movies a week without touching those that are solely on VOD or other streaming venues). The moment a Netflix film is reviewed by movie critics in their movie sections, that will change the perception of their legitimacy. And as more acclaimed directors test this model, eligibility for Oscars and other film awards -- which is impossible now without initial theatrical play -- may need to adapt. And if this happens, the all-important prestige of getting prime theater play and later wider audience appeal that sets apart exhibition will diminish.
7. Netflix elevates itself above previous home formats