Friday, February 16, 2018

Blind Item #8 - Mr. Hedge - The Old Hollywood Con Has A New Name

It is said that history doesn’t repeat, but it often rhymes.  In over 100 years of Hollywood history, once every couple decades some person, or company, has been able to swindle enough cash from investors to even attempt this brazen scheme.

Almost every major studio has attempted some form of this scheme, on a smaller scale, at one time or another in its history.  The most recent example is back in the early 90's, when Sony paid through the nose for Columbia and TriStar Pictures.  Sony lost billions of dollars in the following years.  Each and every single time, the scheme has ended in miserable financial failure for the investors who were left holding the bag at the very end.  Many decades ago, RKO drove itself into receivership, and Warner Brothers almost went bust.

The scheme goes like this: Buy up as much talent in town, as quickly as possible, and it’ll all pay off later.  Doesn’t matter how much you have to pay.  Trust us, the financials will work out very nicely in the future.  Because we will simply chase everyone else out of the game.  Just give us a lot of money, so we can make sure that everyone else will go bust - before we do.  It will only take us a few short years to make that happen.  Then, we’ll be the only option in town.  We will control everything.  We will be able to squeeze the amount of money paid for talent back down, while charging our customers a ton of money.  We will be the last man standing, rolling in dough.

In recent years, an almost TV-network has made that age-old scheme the centerpiece of their corporate strategy.

This almost-TV network will pay at least twice what anyone else will for original content, whether you are selling a TV series, film – or even a stand-up comedy special.

The modern version of this scheme is enabled by a very unique form of accounting hocus-pocus, used by the almost-TV network.  This accounting magic allows the company to claim that it is generating a “profit”.  The reality is that this company burned through about $2 billion of cash last year, and will burn through another $3-4 billion in 2018.

This almost-TV network simply depreciates the value of all these films and shows over a far longer period of time than everyone else ever has.  The company claims that their definition is legit, because the content is in their own “library”.

This almost-TV network is the 1st to deliver its content in a unique way, using relatively new technology – they were the first company to do it this way on a large scale.  This means the Feds presently have no basis to challenge the almost TV-network on its suspect accounting, because the new “definition” has not been proven wrong.  Only the ultimate financial collapse of the company will do that.  In the meantime, the accountants and auditors go along for the ride and happily collect their fees, as they always do.

The almost-TV network tells its stockholders that it can taper down this spending spigot in the future, to generate actual cash.  This is an obvious lie, in 2 ways.

If the almost-TV network ever cut spending and new content, many subscribers would drop them like a hot potato.  Second, the company is making many big public commitments to spend money like drunken sailors, for several years into the future.  The huge deal they made this week – that is just to the head guy alone.  It doesn’t count a penny towards what it will cost to make his shows.

This almost-TV network also doubled down on a sequel for a very expensive recent film.  They literally doubled the bidding price for the original, which was a disaster.
Let’s call these Films A1 and A2.  A1 isn’t still worth most of its massive production cost, which is the value the almost-TV network uses for its accounting - just because A1 is part of their “library”.  Everyone knows A1 is worth pennies on the dollar.  The company claimed that millions of people watched A1.  Maybe, but A1 was so bad that many of them probably turned it off part-way through.  Most of those who watched the whole thing thought it was a lousy film - and won’t bother to watch A2.

Recently, the almost-TV network just bailed out a struggling once-major studio, and bought their awful film for big money.  Let’s call this Film #1.   Film #1 would have completely flopped at the box office, as the reviews were about as terrible as they can possibly get.  Critics have called Film #1 a total mess.  Film #1 is the 3rd film in a sci-fi series, but it is missing the main actors and director from the successful original film.   

Very recently, the almost-TV network bought yet another film, which a major film studio had put on the shelf - rather than bother losing even more money releasing it in theaters. This film stars the lead A-List actress from the original in Film #1’s series. Let’s call this film #2.

Stockholders in the almost-TV network are flying high right now.  In the next couple of years, they will see these heady gains evaporate.  This almost TV-network has a rapidly growing mountain of debt, which is getting much more expensive to finance.


Almost TV network -
Huge Deal This Week -
Film 1  / studio  / amount -
Film 2 -
Original to Film 1 -
Actress -
Film A1 / A2 -

86 comments:

moussemaker said...

Netflix.

sandybrook said...

Netflix
Ryan Murphy deal

no name said...

Is film A1 Bright?

Unknown said...

Netflix but it still sort of sucks.

Lime said...

Yikes, Netflix!
Films A1 and A2 and most likely Bright. The first movie was called a flop (although I didn't hate it) and they promising to come out with a sequel. Don't know about the rest, I'm just a small town girl.

Melvin The Reanimated said...

uh, duh.
Netflix/ Ryan Murphy deal.
A1 and A2 are Bright and it's sequel.
Film 1 was Cloverfield Paradox, bought off Paramount for $50 mil.
Film 2 is Extinction, bought off Universal, which originally slated for release in January. It stars Lizzie Caplan, who was in the first Cloverfield.

Florin said...

Netflix
Ryan Murphy Deal
A1 is Bright
A2 is the announced sequel
Film 1 is The Cloverfield Paradox
Actress would be Lizzy Caplan in Cloverfield
Film 2 is Extinction

bobbykimmie said...
This comment has been removed by the author.
Florin said...

AKA +1 Melvin

Brayson87 said...

Anyone remember back when people said Amazon was a scam because it wasn't turning a profit?

Hatred for Netflix is very real in Hollywood.

sandybrook said...

Cloverfield trilogy the 3 movies gugu Mbatha-raw the star?

Palooza said...

Netflix
Ryan Murphy
Cloverfield Paradox / Paramount / $50mil
Extinction
Lizzy Caplan
Bright / Bright 2

longtimereader said...

Amazon is/was a scam, if they had paid sales tax like regular retailers they would have gone under years ago.

Brayson87 said...

Tell that to closed down shopping malls. Sometimes the myth becomes reality.

Smalls said...

Almost TV network – Netflix
Huge Deal This Week – Ryan Murphy/Five year deal
Film 1 / studio / amount – Cloverfield Paradox
Film 2 - Extinction
Original to Film 1 - Paramount
Actress – Lizzy Caplan
Film A1 / A2 – Bright/Bright 2 (sequel)

Cail Corishev said...

Sheds a little more light on why they spent so much on the media blitz to save net neutrality.

A dumb idiot said...

+1 Smalls. I was thinking of cancelling after they raised rates again after watching Bright.

Brayson87 said...

And why don't we talk about Uber, how the company heavily subsidizes every trip and right now is losing money despite revenue. But I don't see anyone ringing a death knell for them either. Nowadays it's either go big or get crushed by your competition.

http://www.businessinsider.com/uber-leaked-finances-accounts-revenues-profits-2017-2

totaji said...

I miss the old Netflix when it was full of back catalogue, B movies, obscure films and weird stuff. Most of their original content is garbage and a few hits aren’t worth it.

Xpensive Hobutt said...

AmeriKa needs an ALL PORN ALL THE TIME channel. The people demand FUCK FILMS with their SOMA (MARIJUANA).

Brayson87 said...

It's true about losing the old stuff, they lost Buffy, Angel, HIMYM, etc.

Brayson87 said...

Hobutt, they already have it, that's HBO

timebob said...

I liked Bright, there I said it, fuck you critics.

Glitter said...

Yes, I was talking about dropping Netflix this week. Most of its offerings are trash.

.robert said...

Amazon also receives huge government contracts that are probably not properly competed.

Doug said...

I'm going to figure this one out if it takes me all weekend.

David Howes said...

Sounds like a Trump business deal.
He makes money and everyone else gets BK.

=) Ok. My apologies to you Trumpeters. That wasn't called for.

On this, I'll follow everyone else who guessed NetFlix.

Unfortunately, I don't know much about their business dealings.
As for Ryan Murphy's deal, my understanding of these things is he spearheads the production and Netflix pays up to $300 Million to him to produce content. (He doesn't get the whole $300 million in his pocket?)

Anyway, I think it's similar to Howard Stern's Sirius deal, isn't it?

That's it!
That's my guess...

I'm usually way off, so be kind.

PhyllisWhitweed said...

+1000 Brayson This is the same MO used by every tech company I worked for.

Jayne said...

Netflix has very little on that I like to watch anymore and I'm about ready to dump it.

What they are buying and creating doesn't interest me in the slightest.

And I've been wondering how they were turning a profit ever since they went Marvel heavy with Jessica Jones and the like because talent like David Tennant doesn't come cheap.

Sharper Teeth said...

But didn't Lizzy's character explode in the first Cloverfield?

annie roo said...

I am struggling to find anything on Netflix, as a middle aged housewife, who I might add set up the account for family, I think you will find this happens in many cases. My OH certainly wouldn`t have thought of it. I did the same with SKY, I pay for it for the family, I am the one who watches it least with an all male household, discovery sport etc. rule the roost.

So Netflix being all clever with odd productions are risking chasing the silent majority away. I am watching the original Dynasty on Sky at the moment, so yes the old programmes do have a pull.

You think USA Netflix is bad, have a look over at what offerings we in the UK get? I am now paying $14 a month for far less than you get.

No Netflix I am not impressed by the licensing issues you quote every time someone complains about your excessive charges and limited programming.

Ah I feel better for getting that off my chest lol.

cheesegrater15 said...

I hope Netflix stockholders are reading this.

zerooptions said...

Yes! I've been wanting to read about the "creative accounting" and it's use in the entertainment industry!
Thanks enty

RockSword said...

While reading it, the whole time I was wondering how many investors will see this and do some research.

plot said...

I love BIs like this so much.

Netflix is buying up foreign shows like crazy and claiming them as Netflix productions. I wonder how that plays into their accounting? Netflix had NOTHING to do with the production of Casa de Papel (and they've refused to release the ending, too) or the German TV show Dark. Dark was a middling hit for them and I can see them hiding money inside phantom production costs which will benefit the executives later when the bust inevitably occurs. Just thought of another one - The Fall.

I'm in the minority in that I really dislike their Marvel productions. They aren't meant for me, I get that, but for Millenials and their need for the simplicity of a video game narrative but with over-the-top visuals for their "peak" experience. I haven't been able to finish even one of them. I am so bored.

I dearly miss the old catalogues and wondering through them looking for gems. Some have moved to HULU which is buggy as hell ( I wonder often if someone is paying to make it so, with all their buffering issues.) Amazon has the best original content, to my mind, but as such it takes a long time to develop, as it should.

BayAreaGirl said...

@Brayson regarding Uber, umm there is a lot buzz in the Valley that Uber is the next Zynga, but might not make it to IPO. They're losing talent and only attracting 5th-tier investors. I have been flooded with resumes from people who already have or trying to flee Uber.

This blind is definitely Netflix who is overpaying for talent & content. However, we watched Netflix everyday. My kids love their children's content & will watch the same movies repeatedly. The adults watch Narcos, The Crown and many of the documentaries. Perhaps we're the target audience?

BayAreaGirl said...

*watch - present tense

Forgot to mention Stranger Things above. I think these big deals are a loss leader (ex. Costco's rotisserie chicken) to attract subscribers who stay for the less splashy stuff, like Dinotrux & Spirit Riding Free.

MusicDSPGuy said...

The Netflix scam is very different from the Sony Pictures scam so well and amusingly described in the book Hit and Run. The Sony story was a simple tale of straight con-men playing a standard con. The Netflix scam is just a straight rerun of the type of accounting scams used in the AOL fraud and in Softbank/Learning Company fraud back in the 1990's. The AOL scam cost Time Warner about $10 billion. The Softbank/Learning Company cost Mattel $3 billion.

The AOL fraud was based on an accounting scam where they capitalized all marketing expenses. All those CD-ROMs that you got through the mail and in magazines was claimed by AOL as a "research and development" cost. So could be amortized over seven years instead of charging them against that years accounts. So AOL not only never made any profit but had actually lost huge amounts of money. Which Time Warner discovered the hard way after the merger. Many billions of losses. Its not like everyone in the business at the time did not know that AOL was based on fraud.

The Softbank/Learning Company fraud was based on acquiring larger and larger software companies and greatly inflating the "goodwill" of the acquired companies. So their balance sheet looked great and the companies they acquired were cash rich and had great cash flows. But the scam needed bigger and bigger companies to acquire, like all Ponzi schemes, and when they ran out of companies to gobble up they sold the whole festering sack of shit to the nearest clueless idiot with money. In this case Mattel. Who a few years later had to write off $3 billion in losses and almost went bankrupt.

Netflix is a very bizarre company. The HQ in Los Gatos, even by Valley standards, feels more like a weird cult than a tech company. We are not talking the Apple/Steve Jobs 1970's New Age Commune Personality Cult in Cupertino its more like a weird Landmark/Est sort of vibe. Very creepy.

And as for Amazon, it's a straight accounting scam too. But with the added twist that Bezos got his start on Wall St selling very dodgy bonds so knows a thing or two about wrapping an extra layer of obscurity using financial engineering around was is actually a straight accounting scam. Restate Amazons accounts without the hand waving and they have not only lost huge amounts of money over the last 20 years but can never ever make any money. Except as a total monopoly. Which is not going to happen.

Those of you who have seen Bezos in person, up close, will know he is just the classic slimy huckster type. But without the smooth self confident veneer of the straight con man. More like a disreputable small town lawyer.

Unknown said...

Never subscribed to NetFlix.
Don't plan on subscribing.

andy81 said...

I don't are about them buying scifi stuff, even if it isnt that "good".

MusicDSPGuy said...

*correction*. It was SoftKEY, not SoftBANK, who were behind the Learning Company Mattel multi billion dollar scam. Bunch of scheisters out of Boston lead by a con man named O'Leary. These people later went on to run another scam company named Riverdeep, which eventually almost bankrupted the book publisher Houghton Mifflin. Another multi billion dollar scam.

MattDaddy said...

The thing about Netflix that’s so dumb is that they started out trying to make quality shows in order to lure subscribers, but now they’re just tossing millions at whatever they can find and winding up with stinker after stinker.

That loss of interest in quality is what’s going to get them.

xyzxyz33 said...

I agree with Phyllis Whitweed.
This sounds like every tech company I've observed and advised.
A perfect example is the Elizabeth Holmes start-up THERANOS.
Definitely one of the biggest tech investment shitshows in the past few years.
Netflix seems to be skating in "Theranos-Like" territory.

Netflix has a lot of properties that SUCK,
BUT I did just watch a series I loved called RETRIBUTION.
Same writers as The Missing on Starz.
So Good.

If anyone wants to watch a fantastic movie,
watch "BAD DAY FOR THE CUT."
What a sleeper. It was fantastic.

And yet, that being said, cancelling Netflix is something we think about regularly.

We're subscribed to Prime and they've had some great titles over the past year.
Some stinkers too, but we've seen more good than bad.

I would've never thought about subscribing to Hulu,
but it looks like they've got some interesting titles coming out.
The one with my Michigan Neighbor, Jeff Daniels, looks interesting.
Something in the title about towers.

M said...

If you can't find free prn you're blind, deaf,AND missing all your fingers and toes.

beebopcowboy said...

definitely netflix

that cloverfield movie they bought from paramount and put on there was so. bad. I remember seeing it being tossed around between release dates and thinking, hm, this is odd. It used to be called God Particle...it looked good on paper, producer/cast wise...

Shawn McGuire said...

I’m on episode 3 of Retribution. It’s very good. Seems like the best stuff on Netflix comes from overseas.
No one mentioned the Sense 8 show but that might be one of the items in the blind. Didn’t watch that one but it looked kinda cool.

Sign Name Below said...

I am going to rewatch the South Park episode (Franchise Prequel). "Hello, this is Netflix. You're green-lit! Who am I speaking to?" So damn funny because it's true

Brayson87 said...

@BayAreaGirl, shhh I know but I went for example everyone uses now. I could have brought up T's creative accounting but dammit I don't want to interfere with getting off this planet lol.
Oh and keep an eye on Zynga in the near future ;)

Same here at my place with Netflix and the other streamers. We dropped our cable because all we watched was streaming content, we didn't have time for the networks.

MichiganMama59 said...

Blockbuster should challenge netflix and just make you pay for what you actually want to watch.

BayAreaGirl said...

@MichiganMama, I think you should try RedBox, Slingbox or Vudu.

BayAreaGirl said...

@Brayson, gotcha. Interesting info about Zynga, I guess they still have good IP, just had douche bag CEO and business decisions. However, Uber is royally screwed. Bad ethics + frat house atmosphere + losing talent is bad mix.

As for Netflix, Maybe I have low standards, but I usually don't have trouble finding stuff to watch of Netflix.

Amazon is not a scam, it's primary revenue comes from selling staples. Amazon is really a retailer, so their main competitors are Wal-Mart, Costco and Target. Amazon Video is just a perk to get you to join Prime, so that you will buy stuff. I admittedly fell into that trap. Now, I buy everything on Amazon, from diapers to lactase drops to Chinese New Year's red envelopes.

Sal Salington said...

The history of Hollywood is the history of new sets of fools being separated from their money.

One thing the old studios were smart enough to do was use the investment to pay themselves to lease real estate from themselves. Hence the studio lot.

The same with the 15 zillion other 'studio services' provided during production.

Netflix doesn't seem to be playing that game. Maybe they should.

Me2 said...

I just miss the old netflix with back catalogue too. I've been watching the new netflix series River with Stellan Skarsgard and am hooked altho i've got issues with some of it.

LOVED stranger things, and have found some good documentaries (altho heard some things that indicated the documentaries weren't screened for accuracy and some pretty flawed)

I'm on the fence about keeping netflix as long as I'm paying minimal for one screen the tv series (THE OA LOVE that, LOVE the travellers and several others_ are worth paying for but ...............I do wish netflix would pull away from apocalyptic death of humanity crap. (i say that announcing I loved travellers on netflix)

if the good stuff thins out much more I'm bailing.

VDOVault said...

At least with Amazon if they fail at original programming they can fall back on selling other stuff online. Bezos has a finger in everything you could possibly exchange for money (goods, services, you name it).

Like Wal-Mart, if CDs & DVDs aren't selling well, you can sell more garden hoses or groceries or whatever if you're diversified like Amazon (which started with books, music & movies back in the 90s because those were the most workable goods to sell once the NSF lifted the Acceptable Use Policy & allowed commercialization of the Internet back in 1994)

I am sure Amazon bids against Netflix just because buyers remorse can be a brutal thing for your competition to endure. Some bidding wars are so not worth winning.

Netflix isn't all that diversified like Amazon is so if they don't get this right they're toast & so is anyone investing in their business model. Never mind any hanky-panky accounting (which I know both Netflix & Amazon do because they can & if they didn't their competitors would screw them that way).

Also anybody making this stuff for Netflix better get as much as they can upfront like Ryan Murphy. Because there won't be a backend or royalties like there used to be back in the pre-streaming days. There's a telling tweet from Lori Petty bitching about the latest round of giveaways to Big Media Conglomerates via the SAG-AFTRA contract (she's on Netflix's OITNB). I think it's the new normal

https://twitter.com/loripetty/status/964002251051122688

lucy said...

I think I am in the minority when I say I just HATED stranger things. at first I thought ok it is kinda cute. kind of Goonies meets ET meets Poltergeist but I just could never fully get into it and I like Winona Ryder but her character made me manic af. kind of like Carrie in Homeland with the wacky faces but set to words.
I don't have Netflix anymore and won't go out of my way to again subscribe but I did appreciate catching up on Bates motel. really dig that show

Kno Won Uno said...

I appreciated your insight. Good stuff.

Seal Of Lion said...

Netflix has an even bigger mess on its had with the Martin Scorsese film "The Irishman". They bought it from Paramount for $105M, budgeted it at $125M, and now its ballooned past $150M.

Adrian Zmed said...

So Amazon has issues but it has Amazon Web Services which is where they mint money. And they make great money on fees from Prime. But they are at least cash flow positive.

Enty is spot on for Netflix accounting. This is shades of Worldcom type stuff.

I just got Netflix 6 months ago - finally gave in because of kids. Well, it sucks. I struggle to find stuff to watch. Ironically the best was their Bitcoin documentary, which had Alex Winter in it of all people.

Everything on Wall Street works....until it doesnt. There is a reason Buffet owns stock in Apple bUT not AMZN or Netflix. The latter is the scariest. By comparison FB and Google are very real companies.

The ultimate hope for Netflix is that dumb money will buy it (think AOL Time Warner). New sucked ate born every day. Maybe VZ or Google will be that dumb. Not Disney though. Iger has a brain.

Scandi Sanskrit said...

You can try MUBI?

plot said...

@lucy

I didn't like Stranger Things either. It was an amalgam of a lot of 80s shows that weren't that good to begin with. That's a stunt Netflix is pulling a whole lot - making new versions of old shows, even lifting chunks of dialogue. It's not going to work for long as content.

@Adiran Zmed

Yeah, the Amazon Cloud services are scoring big time. Amazon is being both prudent and taking chances in exactly the right ways. Netflix is churning capital but they are going to hit the wall hard as the shows they develop lose their value and Netflix has nothing else in it's catalogue and no other services.

Scandi Sanskrit said...

Plot, thought I'd share this with you:

Apparently I'm technically a "Millennial" (bleccch). I don't need "simplicity of a video game narrative" or "OTT visuals" (I'm a HUGE "Alfred Hitchcock Presents" fan).

However, I do have a VERY short attention span. I had to read yesterday's Himmmm blind item (the Elvis Club one with the Zen rockstar dude) in about 3–4 sittings. IDK if it's just ADHD or also the way people are wired these days because we grew up with everything being so fast-paced.

Maybe the people developing entertainment don't understand how their content is consumed and they're just misunderstanding short attention span as being simpletons? I like complex, but I also wish I could sit still longer.

plot said...

Scandi,

That's interesting because I work around many millenials who have ZERO attention span, NONE. It simply does not exist. And the over-talking! What's that all about? How can you guys understand one another?

Just yesterday I introduced 2 friends who I KNEW could work really well together. Both Millennials who can't shut up and listen, I was right, they talked incessantly (and so loudly) at one another without a single break to listen. I felt it was a success but DAMN I had to walk away, sit outside and demand some silence.

As for reading, what converted me into a reader was great books and good writing. I used to think I just wasn't a reader until I discovered that the writing matters. It's such a pleasure. Try short stories or articles first where the author leads you into this other world where you can trust him/her to deliver you there in the rhythm of his/her choosing.

Yeah Him said...

Thanks @MusicDSPGuy. Great read. I love that stuff.

Scandi Sanskrit said...

I don't think Millenials are good listeners, either.

I'm ashamed to admit this, but I ordered "Bad News" (that's the title of a book by an author named Edward St. Aubyn) and it arrived at my address on January 6 but I've only reached page 36 (it's February 17 today). And the worst part is I've become so reliant on using that built-in dictionary on iPhone that now I have to DRAG myself to look up any English word I don't understand. It's a great book, though, just my cup of tea! Thanks for the advice!

Not many publishers make short story anthologies like the "Birthday Stories" one that Haruki Murakami curated. They could make tons of money marketing that kind of thing to people with short attention spans! LOL.

Juliaph said...

OK, so since I can't complain about it anywhere else (Netflix won't listen to me) I will dump it here and I want to know if anyone else will commiserate with me...

Am I the only one that goes through the Netflix menu and sees a REALLY FANTASTIC movie or show and so I flick it on, only to find that it is in a FOREIGN LANGUAGE WITH SUBTITLES???

NETFLIX: If you are going to put on foreign shows with subtitles, at least identify it as such. PLEASE don't try to trick your customers into thinking you have a bigger library that appeals to your base than you really do.

Drama said...

This may have been the most obvious blind in CDAN history.

Greta Garbo said...

So, uh, is it time to sell or buy more Netflix stick?

MusicDSPGuy said...

@Adrian Zmed

According to the guys who build out very big data centers and know the costs involved, Amazon lose money on AWS, Microsoft lose a lot of money on Azure and Google makes a small profit on their cloud services. But only because Google have been building out massive clusters for almost twenty years. All the hand waving in the public a/c's by Amazon and MS is just that, hand waving. Especially from MS. Amazon would not have to do their fixed capital costs accounting gymnastics if it was actually profitable.

Netflix moving up-stream and trying to become vertically integrated, like pre 1947 Hollywood, makes perfect sense as this was Reed Hastings original business plan. To become a content streaming company. They only got in the physical distribution business, the DVD mailers, because the streaming technical infrastructure was not in place until the last few years.

Now Amazon getting into the content production business makes no business sense whatsoever. Over the years Besoz has aped the Microsoft strategy of getting into large numbers of unrelated business segments. Which never ever made a profit. XBox is still net minus quiet a few billion. But unlike Microsoft Besoz does not have a multi $10B's major segment monopoly with 90% plus net margins to keep the show on the road.

From a business point of view the Netflix strategy does have some logic behind it. The current content production business model is very brittle, with the East Coast money being at the start and end of the chain. So if Netflix can disrupt that chain and become a major funding source then I think they have a sporting chance of recreating the old Hollywood business model of pre 1947 Consent Decree where the movie theater chains were kings and the only function of the movie studios in LA was to keep the distribution channels full of product. The origins of Poverty Row was they were almost all the movie studios who were not owned or controlled by a major movie theater chain.

In my experience people who dont know how the movie business actually works talk about directors and stars whereas the people who do know how it actually works talk about producers and talent agencies. Because its the producers and talent agencies who makes things happen and get things made. Even the biggest names directors and stars cannot make things happen, go into production, unless they have the right producers and heavy hitters at big name agencies to actually put a successful package together.

And this whole process starts with someone to put up the financing. Which is what Netflix is trying to become. A dominant source of financing. With the downstream content distribution channel as the very big carrot for those who sign up.

DDonna Tarttty said...

Not even worth guessing here, since everybody's already gotten everything right. I couldn't make it to the end of either "Bright" or "Cloverfield," though the first one seemed worse. Netflix feels increasingly misanthropic, like it wants to make people feel bad. I'm thinking of canceling it for that reason. Feel like bad people are running things. Sinister, even.

annie roo said...

DDONNA, sounds like the BBC re: trying to make you feel bad. Political agenda do you think?

plot said...

@MusicDPSGuy

Interesting post, thanks so much for that. I disagree that Amazon doesn't have a powerful amount of cash as backup, not as much as Microsoft, but they have plenty there. Also, the Netflix paradigm is bound to lose because so many other services are rushing to knock them off their post while the contents on Netflix gets worse and worse. They cannot control all the product. You've given me a lot to chew on, nonetheless.

DDONNA -

I find a lot of the Netflix offerings to be worse than misantropic (cuz I love a misanthrope), they are downright sadistic, which is what the kids seem to like for some reason. So often I've turned them off and accused others in this house for wanting to watch some sick shit. Maybe it isn't them?

kristaylor6663 said...

So does this mean JJ Abram's bad robot is in financial trouble since it produces cloverfield?

annie roo said...

Music guy, they can put out the sadistic nasty stuff for the young, but the parents pay the bill so can pull the plug.

Jen Ty said...

"Sheds a little more light on why they spent so much on the media blitz to save net neutrality."

Comment above - well there are good reasons to save net neutrality beyond keeping the gubmint out of their bookkeeping. Though actually the end to net neutrality could in fact benefit Netflix depending on how you look at it or how things would shake up if that Ajit Pai has his way. The consumer is the one that gets dinged in the end regardless.

I always wondered how Netflix made enough money to support their programming. They just raised the monthly subscription fee and keep in mind lots of people find ways to steal content from Netflix and other streaming services as well.

Gary Burnaska said...

Netflix is getting Hollywood hate because they are destroying movie going. But movie theatres were already setting themselves up for a disaster. Even before streaming was even possible, going to the movies SUCKED. Concession prices and disruptive audience members were ruining the experience. So when Netflix came around they were vulnerable for disruption Because of this HW has become desperate and depending on more and more expensive tent pole superhero blockbusters. That bubble is going to burst really soon.

MovieBuff said...

Cloverfield Paradox is pretty decent. Bright was okay I don’t like anything Will Smith is in he has one character he portrays in every role and he taught himself to cry in the one episode of Fresh Prince and is all he can use when attempting his best deep acting reach. He has two movies I tolerate Hitch and Seven Pounds.

I didn’t read this whole article but I love Netflix and I will always love Netflix. I have had Netflix since the streaming quality was grainy. The first two movies I watched on my Netflix free trial after I bought my son a Nintendo Wii was Dream a Little Dream which is my favorite childhood movie of all time. Just one of the Guys was also available. That sealed it for me. I told everyone I know to get Netflix. As the years went on and technology improved Netflix got better. Netflix can charge $20 a month if that meant more content I like to watch. Some people like fancy food, alcohol, drugs, vacations. I like movies. I have Netflix which is superior, Hulu, and Amazon Prime. I don’t bootleg movies I go to the theater. I love movies and will love them till my dying day. I don’t want to hear any smack talk about Netflix. Stop playa hatin’

Teeth is still the best gem I have ever watched on Netflix. Jess Weixler did an awesome job in that movie. It was goofy but great.

As long as Netflix keeps the content stocked with what I want to watch long live Netflix.

As you were....

MovieBuff said...

Buffy is on Hulu

Scandi Sanskrit said...

"I Love Misanthropes" sounds like something worthy of printing on a shirt. 🖤

MovieBuff said...

For those who don’t know what to watch on Netflix here are some recommendations. I watch/watched all this.

Shows:

Black Mirror
Lovesick - British show not the Matt LeBlanc movie
Orange is the New Black
American Vandal
Stranger Things
Everything Sucks
Unbreakable Kimmy Schmidt
Santa Clarita Diet

Movies:
Step Sisters
When we First Met
Spread
The Details
The BabySitter
Gerald’s Game
Sleeping With Other People
Heartthrob
The First Time
Good Kids
Holliday’s
As Cool as I Am
Chloe
All Good Things
Spotlight
Definitely Maybe
The Invitation
Little Evil
Yoga Hosers
Oculus
Teeth
Odd Thomas
The Collection
Would You Rather
Circle
Ask Me Anything
The Overnight
For A Goodtime Call
Begin Again




NicQuerica said...

Hehe I like you, you sound like my kinda person. I love movies too. Watching movies on Netflix and Amazon and going to the movies, too. But if Netflix is engaging in some shady business accounting practices, that needs to stop pronto. What Netflix needs to do is expand its existing movie catalog for streaming. There's alot of good movies that Netflix doesn't have and need to get. More quality indie movies, obscure/hard to find, and mainstream hits and classics, too.

MovieBuff said...

Shady accounting is as American as apple pie. In fact we’re in that particular time of year where lots of our brethren will cheat on their taxes to get a better return. I myself am afraid of being caught so in certain areas of my life I practice honesty (not ALL areas because I will massage the truth like anyone else) but if Netflix is fudging the numbers they can be caught like anyone else. Money math is the worst kind of math and math intellects without morals take advantage of what others don’t understand.

Netflix has the best platform for watching movies. Everyone is salty and tries to compete but no one has been able to truly compete.

I subscribe so hopefully whatever shady things they could be into won’t blow up in their faces.

Urban Rosebud said...

Yes. Netflix European programming is good. The French show "Dix en Cent" (10%) about agents is watchable. Shows from the UK, such as Black Mirror is excellent. They have / had the original version of "House of Cards" which is good as well. However, their programs are not as good as they use to be. They cannot keep my attention span. Their programming becomes redundant & boring after a while. But interested in checking out "Chewing Gum"... if anyone has seen it?

Urban Rosebud said...

Thank you MovieBuff for solutions...

More Cowbell said...

Hollywood accounting needs to be addressed by the federal government. It has ALWAYS been shady. They are not paying their fair share of taxes.
Also, think of the people who who work on a movie who are supposed to get a cut of the "backend." Never happens because the accountants ensure there is no "backend."

Man From Atlan said...

MusicDSP Guy, you mean SoftKey/The Learning Company? https://en.m.wikipedia.org/wiki/The_Learning_Company

Man From Atlan said...

Hi, MusicDSP Guy,yeah, it was the "Boston con man" O'Leary who tried, unsuccessfully, to run for leadership of the conservative party then dropped out, dreams of being the Canadian Donald Trump failing him https://www.theglobeandmail.com/news/politics/kevin-oleary-drops-out-endorses-maxime-bernier-for-conservative-leadership/article34818970/

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