23 JUL 2021

SEEKING TO COMPETE WITH STUDIOS, STREAMERS KEEP BETTING ON MOVIES

The first quarter of 2021 saw Netflix and Amazon Prime Video bet strongly on movies, with the highest number of original films commissioned by the former in its history, according to new research from Ampere Analysis.

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"The Tomorrow War" (Amazon)

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The first quarter of 2021 saw Netflix and Amazon Prime Video bet strongly on movies, with the highest number of original films commissioned by the former in its history, according to new research from Ampere Analysis, published on Rapid TV News. Driven partly by the pandemic, the ramp up is also a reflection of the on-going importance of movies to both Netflix and Amazon Prime Video in the face of renewed competition from studio majors.

Ampere observed that Netflix is following a strategy similar to that used for its high-end TV productions by focusing on originals, and that contrast Amazon’s strategic focus on films is fuelled by licensing and by its recent agreement to acquire MGM and its library of over 4000 titles. Netflix’s original film strategy, in particular, is focused on growing access to franchise-able IP as it uses adaptations and reboots, drawing lessons from its TV originals.

The report also indicated that Netflix has long been by far the largest SVOD commissioner of original films, which have consistently accounted for around 25 - 30% of its first-run commissions each quarter since Q4 2018. A slate of new projects in the first quarter of 2021 represents the highest number of film orders in a single quarter.

Ampere added that Netflix was now looking to play the studios at their own game by developing new film franchises or acquiring franchise-building intellectual property. Franchise building is a key driver of Netflix’s film commissioning strategy. In fact, of Netflix’s original film commissions made this year, 46% have been remakes, sequels, spin-offs, or adaptations of existing IP. It has also been adopting an acquisition-to-original model in its film commissioning strategy, acquiring the rights to make sequels to existing box-office hits.

The shake-up of the theatrical market caused by the Covid-19 has catapulted films to the forefront of new streaming services’ competitive strategies. In the face of blockbuster studio releases from heavyweights like Disney and Warner Bros launching direct to consumer, players like Netflix, Amazon and Apple have rushed to bag films previously intended for the box office. With shorter theatrical release windows looking increasingly likely to become the norm, Ampere noted that exclusive licensing deals such as the one Netflix agreed with Sony in April 2021 will remain crucial as streamers scramble to establish their own rival properties.

“While the platforms’ strategies necessarily differ, both Netflix and Amazon are pursuing the same goal of competing with the traditional studios on the level of tentpole titles,” commented Alice Thorpe, Analyst at Ampere Analysis.

“Netflix can now lay claim to true studio status in terms of the global production infrastructure it has established in recent years, but it is still chasing franchise success when it comes to films. Building local franchises with crossover appeal in multiple territories is also key to its strategy. Meanwhile, Amazon is buying into the franchise game to enable it to scale up from its critical successes. The global brand recognition that comes with a property like ‘Bond’ will help further assert Prime Video’s independence from Amazon’s ecommerce business by making it a destination for bonafide blockbusters as well as buzzy indie titles,”  Thorpe added.

While the platforms’ strategies necessarily differ, both Netflix and Amazon are pursuing the same goal of competing with the traditional studios on the level of tentpole titles” Alice Thorpe Analyst at Ampere Analysis