Im responding to the *assumption* that this is going to make them lose money. Maybe they will and maybe they wont, but it doesnt make any sense at all that they would, in desperation, do something that one could assume would hurt their bottom line.
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Denis Villeneuve on HBO Max move: "AT&T has hijacked one of the most respectable and important studios in film history"
- Thread starter Schlorgan
- Start date
This happens in industries all the time. It's sad. I hope it doesn't happen. But it's not someone who wants to streams job to figure out the market dynamics and it's not their responsibility if a model doesn't work to employ people.
They're trying to launch hbo max after seeing how well D+ is doing
This ignores how its literally part of the plan and working. "Viewed from the lens of net income, Netflix has been performing well, with its net profits growing 3x from around $0.6 billion in 2017 to $1.9 billionin 2019."
but its coming out in cinemas. Outside of the US its only coming out in cinemas so this is a US-focused rant in the first place. And clearly due to COVID as otherwise WB would be using their normal release window approach to maximise revenue. This is a defensive move but presumably a necessary one.
As for 'its made to be seen on a theater screen'. Great. So those that want to, will. But regardless of Covid or not, movies have had multiple release phases for years now - on demand, rental, purchase, subscription TV, network TV, airlines etc. A good movie lives on for years after that limited theatrical run.
As for 'its made to be seen on a theater screen'. Great. So those that want to, will. But regardless of Covid or not, movies have had multiple release phases for years now - on demand, rental, purchase, subscription TV, network TV, airlines etc. A good movie lives on for years after that limited theatrical run.
WHAT big money productions are gone?
Can ANYONE name ONE movie that is now NOT HAPPENING because of big bad streaming?
This is sky is falling, bad faith bullshit
Do you know what I do/my family does?
Cite your sources. Or admit it's your opinion.
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THEY
SHOULD
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CONSULTED
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PEOPLE
THAT
MAKE
THE
MOVIES
BEFORE
ANNOUNCING
THIS
They're out of jobs because the market collapsed due to covid. There should be more jobs as more lower budget productions start up, as we're seeing with Netflix etc. Looking to hearing more about all that value in a blockbuster.
Making it easier for consumers to access a product is pro-consumer. Protecting a billion dollar entertainment industry to keep prices up is anti-consumer. It's not that hard to understand. If something non-vital is no longer sustainable it will have to change.
So they'll just leave cinema and stop making movies? Why wouldn't they just find a better partner for themselves?
Totally understand this.
Totally agree with this.
But most people in this thread are more upset with streaming than WB's tact in announcing this.
Did WB do a bad job announcing this?
YUP!
Are movies dead now?
NOPE.
WB is owned by a Telecommunications company that would eat your mother for an extra dollar
No it doesn't. The net profit Netflix reports is EXACTLY why you cannot view just the net profit. GAAP accounting rules dictate you need to amortise the cost of production over the period where it expects to generate money, and because of the nature of streaming services Netflix can amortise cost over incredibly long time periods turning movies which would be considered 'flops' into profitable ventures..
When you compare net income to cash burn over the same period, Netflix is down billions, and that gap is growing year on year because of their content spend.
You're being told about the economic impact that such a shift could have, and your only retort is that is that waiting for the home release is an undue burden for you. I'm sorry, but they're just not comparable.
You lose nothing while waiting, and it sustains the type of films that home theater enthusiasts want to see day 1.
The Netflix Free Cash Flow Debate Is Over. Here's Why the Bulls Won | The Motley Fool
The streaming giant's years of cash burn have clearly paid off.
www.fool.com
How is Netflix doing on a GAAP basis? In the first quarter, it finished with $958 million in operating income and $709 million in net income. Based on revenue of $5.8 billion, it had an operating margin of 16.6%, much better than the average company in the S&P 500. Indeed, its subscription business model is building operating leverage as it's supposed to. Last year, it finished with a 13% operating margin, and Netflix is targeting 16% for 2020.
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They would leave WB and go somewhere else, which would hurt WB's output significantly.
Warner pissing off their creative partners to do this is an unforced error that could cripple them long term.
I mean because the discussion morphed to long term sustainability
If WB did right by everyone and said as they did this is for next year only
No conversation here happens
What instead happened is WB screwed over everyone and people starting talking like day 1 on HBO MAX is a permanent forever thing.
The conversation here is about this idea in a permanent scenario.
But we can't see them day one so who cares? You're asking me to support something I can't take advantage of. And I'm not convinced that less movies will be made if there's an equal demand. If movie theaters can't exist without exclusivity, why should they?
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Fuck em?
Are we sad someone might try to now grab chris nolan and entice him with a bigger budget?
Absolutely nobody can look at the state of the cinema industry, pre-COVID, and say it was sustainable. It was incredibly precarious, and had, in the space of just a couple of decades, gone from having a fairly varied slate to its continued existent being predicated almost entirely on a small group of marquee franchises - most of which are owned by the same company - around which it built a sort-of-workable calendar.
The state of the entire film industry, though, does not need to be tied to the fate of the cinema industry. At one time it had to be, because there were no alternative distribution channels. Now there are too many to count. If studios believe they can compensate for the revenue they would have previously made from ticket sales some other way, then they will. And based on the evidence of moves like this one, they're confident they can.
Again, why should I care? They'll make movies with someone else. I'll still pay money and see movies.
What?
How can I when the movie theater first model is still the dominant model.
The change hasn't happened yet.
Until the writer and directors guild strike over lost income and manipulative corporate tactics of course.
OHHHH so this is a "slippery slope" argument?
whats next, cats marring dogs?!
What evidence are you referring to? The only example I've seen so far has been Mulan, and that experience if anything has seemingly led Disney to still prefer cinemas for their large releases.
I'm not sure if you properly understood this article.The Netflix Free Cash Flow Debate Is Over. Here's Why the Bulls Won | The Motley Fool
The streaming giant's years of cash burn have clearly paid off.
How is Netflix doing on a GAAP basis? In the first quarter, it finished with $958 million in operating income and $709 million in net income. Based on revenue of $5.8 billion, it had an operating margin of 16.6%, much better than the average company in the S&P 500. Indeed, its subscription business model is building operating leverage as it's supposed to. Last year, it finished with a 13% operating margin, and Netflix is targeting 16% for 2020.
On a GAAP basis it has been continuously profitable precisely because of how GAAP reporting works where you can distribute the cost of streaming over many years and turn unprofitable movies into profitable ones from an accounting pespective. Exactly as that article reports, the actual cash flow is -3.3 billion in 2019 (which, again, has grown massively year on year). Its cashflow is incredibly negative.
COVID has absolutely been beneficial for Netflix in being able to help reduce that cashflow. Netflix has, as the article states, reducing cash flow in 2020 by halting productions and gained record streaming amounts. However, in order to have a positive cash flow going forward while still producing content, Netflix needs to either continuously reduce spending or significantly raise the cost of a subscription. This is in total opposition to the claims which are being made that actually Netflix can afford to spend more.
The thing keeping Netflix afloat is the future potential of the service by dominating the streaming industry, and the ability to turn unprofitable ventures into profitable ones by amortising cost over years.
How exactly can Netflix have 2019 be the peak of content spending yet simultaneously funnel more money into the acquisition and production of 400M+ productions?
Honestly. I'm fine if they do this. I have no love for WB or ATT either. They're all gonna have to hash out what the future looks like. It's clear there are some realities that a lot of parties are going to have to rethink. I think it's in the best interest of the entire industry to go back to the drawing board on this. I support workers rights to do this and I hope it comes out as a more fair and equitable system.
I prefer to stream though.
Are you sure about this? China and Japan are the only two countries having very good box office returns and in the case of Japan it's due to the fact that they've released the biggest movie there of the last 20 years, soon to be of all-time. If you look at other countries where numbers are low, the figures are maybe 1/2 or 1/5th in the case of New Zealand. Flock is not the term I'd use.
This seems eerily similar to the argument fanboys present as to why Game Pass cannot work over the long term lol.
Edit: Now that I think about it, people arguing against HBO Max showing blockbuster movies Day 1 might as well be arguing that Game Pass is a bad thing since the 60-70 dollar per game business model is the only way Devs can keep food on the table.
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The fact that Warner Brothers are even trying this simultaneous model suggests it's worth a shot in their eyes, was the primary evidence I was pointing to. They wouldn't be doing it if they thought there was zero possibility they'd ever recoup the production costs of the films.
Why did you lol? Legitimately curious.
Movies *have* been delayed. An entire year's slate has already been delayed effectively. If they push these back another year then that affects timelines and budgets for everything that is meant to be in production in 2021. There aren't enough release windows to accommodate the influx of backlogged releases with new releases as well.
If we're being honest, the concern by these directors is largely driven by their concern about losing points on the back end. That's all there is to it, really. Denis' contract probably said he'd get something like 3% of the box office take after $200m in sales or something specific like that and so he's concerned about his money -- and I get that. But I'm not concerned about his money. I'm concerned about people's health.
Honestly, I feel like we're gonna see some very embarrassed backpedaling soon. No way can WB survive pissing off all the talent to the point that people currently working on huge projects for them are willing to say stuff like this.
Failing that, idk, maybe ATT just kills WB rather than back down. It's possible.
Failing that, idk, maybe ATT just kills WB rather than back down. It's possible.
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Yup.
Or going with this strategy for WW84 is a horrible failure and they push a lot of their big budget movies to 2022 anyway.
I would count that as backpedaling. Tho I wonder if it'd be enough for some of the talent. Some folks won't be happy without a public apology, and for preference, heads on pikes.
Not that I blame 'em. I like the idea of getting day-and-date movies as much as the next chump, but this was clearly a colossal fuckup.
Do you have an actual content on why thisis ? Let's look at the numbers on this:
Netflix's Free Cash Flow (Net Operating Profit After Tax* - Investment Cost) over time is:
2014: -$0.1 Billion
2015: -$0.9 Billion
2016: -$1.7 Billion
2017: -$2 Billion
2018: -$3 Billion
2019: -$3.3 Billion
Its cash flow has reduced continuously because its investment cost in productions has grown continuously. Netflix, repeatedly, has stated that it expects 2019 to be the peak, and this number to reduce. The only way this can happen is if spending gets reduced, it continuously to gain massive acquisition volume, or subscription cost goes up. Netflix's position on this is that 2019 will be the peak as content spend is expected to decrease.
So again, how exactly can Netflix simultaneously produce blockbusters with budget equivalent to Hollywood theatre productions while simultaneously reducing content production costs to make 2019 the peak? Quite literally the only way it can do this is if subscription cost goes up substantially or the subscriber count skyrockets enough to offset the increased cost.
Netflix can continuously report net profits by continuously amortising production cost over the service's lifetime by arguing the content continuously adds value, however it's actually cash flow is not positive.
*EDIT: Net Profit After Tax should have had Operating added
There are other exceptions. Over 800 000 people have seen Vinterberg/Mikkelsen comedy Another Round at the cinema in Denmark. That is almost 14% of the population.
I definitely could see this going poorly for ATT. It'll be really interesting to see how the numbers do, what the fallout is, etc.
I don't see this move and the way they did it as going well in many ways. But I think the industry is in a weird "growing pains" kind of stage and COVID accelerated it. Growing pains means everyone becomes the worse version of themselves often with Corporate shitting on artist and trying to money grab and many artist trying to refuse that the world is changing and things will go back to normal.
Changes like this are often fights for survivability in a game of musical chairs. There aren't enough seats anymore. So either everyone collectively bargains to figure out a new method, or people scramble for their slice and hope to still be there when the dust settles. Given how capitalism typically works. I expect for the latter, but I do hope for the former (or that the artists come out on top).
Well easy to do it for Dune and Godzilla vs King Kong
Where they paid 25% of the budget but will get 100% of the HBO Max revenue after blocking a 200+ million Netflix bid for Godzilla vs King Kong that would have seen money go to Legendary Pictures who paid the bulk of the budget
Judd Apatow chimes in
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Apatow chimes in:
variety.com
Judd Apatow Says Warner Bros. Showed ‘Stunning’ Disrespect in HBO Max Bombshell Decision
"To do that to just every single person that you work with is really somewhat stunning.”
variety.com
Because they provide a viewing experience truer to the creators' intent, and a significant revenue stream that sustains large releases.
As people have already pointed out, though, the cutthroat nature of Hollywood commercial arrangements isn't the end consumer's concern. A lot of the same back-stabbery also went on when it came to negotiating cinema releases and margins, and the same people who are now going to try to squeeze every penny out of streaming arrangements were the people forcing cinemas to consolidate their calendars around an incredibly small number of films, and squeezing their margins tighter and tighter with every tentpole release.
Apatow chimes in:
Judd Apatow Says Warner Bros. Showed ‘Stunning’ Disrespect in HBO Max Bombshell Decision
"To do that to just every single person that you work with is really somewhat stunning.”
Yah, this element of this whole thing is total bullshit. AT&T are definitely assholes here. I hope this shakes up how decisions are made and bargaining works as I've said in earlier posts. It's really unfortunate that they just seemed to pull this move with no discussions.
I agree with the latter, but I continue to roll my eyes at the former.
Can I see the list that Denis requires a theater meet in order for his movie to be played? Shall I start looking for the shittiest theaters we could expect will still get to show dune?
The creator wants me to be miserable for the entirety of the movie? Maybe the consumer should be the judge of what experience is best for them to consume media. And I'm not asking there not be a theater release. If creators and fans want to watch it in that building huddled together, I dont mind. I much much much prefer home, and haven't been to a movie theater in at least 7 years. Maybe one exception I'm forgetting?
And yeah, at&t are dicks, as are most actors and directors. Im just advocating for a method to enjoy movies the same day other people can in the best way possible. Theaters also lead to piracy. Decreased friction is good for combating piracy.
Haha yes I read your long, passionate defense of all viewing formats. There is still a right way to watch a movie, and acknowledging that isn't an insult to single moms watching movies on their iPads.