ByRicky Derisz, writer at Creators.co
Staff Writer at MP. "Holy cow, Rick! I didn't know hanging out with you was making me smarter!" Twitter: @RDerisz.
Ricky Derisz

At $50 million, Okja is one of the most expensive South Korean films ever made. It's directed by Bong Joon-ho, one of the most high-profile South Korean directors in the industry, acclaimed for hits such as Memories of Murder, The Host and Snowpiercer. It's a project that Bong has had complete creative control over, and stars South Korean child actress Ahn Seo-hyun in the leading role, flanked by Tilda Swinton and Jake Gyllenhaal. But, due to its simultaneous release on Netflix, Okja will be boycotted by 93 per cent of South Korean cinemas.

Although the common adage boldly claims that "there is no such thing bad publicity," Okja's marketing campaign has been polluted with controversy, detracting from the content of the film itself. The title — a reference to a mysterious, giant animal — acts as a nice metaphor for Netflix, the elephant in the room of Hollywood that can't stop marking its tread. The South Korea boycott followed boos at the Cannes Film Festival, where audiences gleefully jeered the streaming site's logo and criticized its consideration for the elusive Palme d'Or.

But why? Why are people within the industry so worked up over Netflix and Amazon Studios as they metamorphosize from simple content providers to movie studios in their own right? For us audiences, the prospect of viewing the latest movies in the comfort of our own home, consequently sidestepping extortionate theatre costs, can only be a good thing. For studios, the inherent fear of losing money is a direct threat to their existence. Like all things in life, in Hollywood's battle between old and new, there are winners and there are losers.

Streaming Giants Are Infiltrating A Select Group

All the signs suggest streaming services will have the same imprint on Hollywood as they did on television. In terms of quality and recognition, Amazon Studios trail-blazed a path into the heart of the industry, with Manchester by the Sea becoming the first streaming service to receive a Best Picture nomination at this year's Oscars. But Netflix is hot on their heels, hiring well-respected producer Scott Stuber as head of their film division as they leap into big-budget feature film production.

Brad Pitt fronted War Machine, which cost $60 million. Another leading name, Will Smith, has joined forces with Netflix to make Bright — his production company Overbrook Entertainment will produce the film on a budget of $90 million. Martin Scorsese will go even bigger, and more costly, with his crime thriller The Irishman, which has a budget of over $120 million. Tom Hardy, too, will turn to Netflix for a leading role in Navy SEAL thriller, War Party.

For and Netflix, the economic structure of monthly subscriptions has removed the cage of capitalist constraint, helping them to pierce the previously impenetrable armour of Hollywood royalty. The major movie studios, known as the Big Six (20th Century Fox, Warner Bros., Paramount, Universal, Disney and Colombia, who are now owned by Sony) are arguably facing their biggest ever challenge.

These studios (sans the fall of MGM and rise of Disney) have ruled supreme in Hollywood since the 1930s. Traditionally, their size and wealth primed them for casting, filming and distributing movies to theatrical audiences. In short, their ability to get coverage was hard to match, especially for smaller studios. But Amazon and Netflix have caused a cinematic revolution by completely reworking this process, giving them something the Big Six don't have — a captive audience of millions, who can access their content from any device with an internet connection.

A Boost To Creativity And Risk Taking

Looking beyond the blinding glimmer of glitz and glam, it's easy to forget that Hollywood is a money-making industry, with the same constraints of any business model. For major studios, the risk needs to be worth the reward. With the reduction in star-power and the continual rise of box office clout for movie franchises, from the Marvel Cinematic Universe to Star Wars, injecting multimillions into an already-established product is seen as a safe bet.

For that reason alone, most major studios stick with franchises and spectacles. And, although audiences may bemoan the lack of originality in modern films (between May and August alone this year Hollywood will release 15 spinoffs, sequels or reboots) the box office numbers speak for themselves — audiences, too, like the safe-bet of familiarity. That's backed up by Paul Dergarabedian, a senior media analyst at comScore, who told Variety:

"As much as people like to decry the lack of originality in sequels, audiences tend to want to bet their money on more of a sure thing."

Globally, box office revenue is increasing, year-on-year. However, the list of top performers and that sweet box office treasure is tightly guarded by the Smaug of franchises, with eight of the top 10 performers in the past two years "recycled" concepts. But there are two sides to every coin, and streaming services are the perfect antithesis to this issue, they're the brave Bilbo Baggins, courageously waving a sword of creativity into the fiery breath of the reboot.

Amazon Studios' Award-Winning Approach

It's important to note that streaming services aren't "saving" cinema; plenty of exciting, profound, life-affirming films are made. But, crucially, the dynamic of Amazon and Netflix opens the door to a different way of working. Imagine a graph, with a direct correlation between budget and creative risk. The higher the budget, the lower the creative risk-taking. Streaming services can scrunch up that graph and slam-dunk it into the nearest bin — for them, no matter the budget, their reach is consistent, liberating them from the need to entice audiences to cinemas.

That same graph leaves a number of gray areas, places where certain projects can fall through the gaps. On one hand, low to mid-budget ventures may not be made as they lack the financial scope of spectacle movies, while also being too expensive for independent studios. On the other, major studios are cautious to green-light a big-budget movie that doesn't already have an established fanbase. This is where Amazon and Netflix conveniently step in.

To date, Amazon has taken the route of pursuing modest but prestigious, auteur-driven work. They've collaborated with the likes of Woody Allen, Jim Jarmusch, Park Chan-wook, Nicolas Winding Refn and more. This approach has landed them genuine acclaim from the industry, the ugly-duckling-turned-award-winning-swan. They've produced a string of respectable, indie-esque films on budgets below $10 million, including Paterson, The Handmaiden, The Neon Demon, and most significantly, Manchester by the Sea.

That's not to say they don't splash the cash when necessary. Café Society was made on a budget of $30 million (running over the planned $18 million budget, becoming Allen's most costly film). James Gray's The Lost City of Z also cost $30 million to make, and is a prime example of the type of project that would usually fall through the cracks. It's an ambitious and flamboyant adventure, lauded for its throwback to classical elements from the golden age of cinema. They say they don't make 'em like this anymore, but Amazon proves that to be false.

Netflix Is Flexing Its Financial Might

In an attempt to play catch-up, Netflix hasn't only loosened the purse strings, but cut them completely, filling in another gray area by financing unconventional projects that also require a substantial budget. Or, as War Machine director David Michôd says: "the ability to make films that are unusual and risky with the resources to do it properly." And those resources are exceedingly generous; the $60 million spent on Michôd's anti-Afghanistan flick is a figure conventional studios simply wouldn't invest in a highly politicized war satire.

Brad Pitt's 'War Machine' cost $60 million [Credit: Netflix]
Brad Pitt's 'War Machine' cost $60 million [Credit: Netflix]

Compare that to Mel Gibson's Oscar-nominated war movie, Hacksaw Ridge, which cost $40 million and occupies a much safer, more palatable pro-America space. Such comparisons are telling; for example, Netflix's upcoming sci-fi fantasy film Bright, starring Will Smith in the lead role, will cost $90 million. That's almost double the production cost for last year's Oscar-winning alien-encounter, Arrival, which cost $47 million and, even on that budget, took years to reach the big screen.

Furthermore, Martin Scorsese's The Irishman is the biggest indication of changing times. As well as significant salaries for Al Pacino and Robert De Niro, the story requires expensive CGI to create younger versions of the leading men, reportedly ramping the budget to somewhere between $120 million and $150 million — which caused Paramount to back out of the project. However, their exit was justified. As Scott Mendelson points out in Forbes, crime films don't make megabucks at the box office, and The Irishman would have to be one of the all-time most successful movies in that genre to even make a profit.

The Great Debate: Theatrical Vs. Simultaneous Release

As well as investment, Amazon Studios and Netflix also differ in their approach to distribution. The former respects the "theatrical window," taking the traditional route of a theatrical release, followed by home release and, of course, access on Amazon Prime some time later. The latter is upsetting the apple-cart by insisting on its model of releasing simultaneously at home and in cinemas (usually a limited release for award recognition), a stance Netflix's head honcho Ted Sarandos looks unlikely to surrender.

Cinema chains don't support this technique, unhappy that they may be losing money, while also dismantling the tradition of viewing feature films in their rightful home on the big screen. As the stakes ramp up, so too does the controversy, which takes us back to . The negative response at the Cannes Film Festival was partly due to the fact the film doesn't have a theatrical release date in France, which has led to the festival changing their own rules to avoid this issue in future.

Further still, the South Korean boycott is related to procedures in place that insist on at least three-weeks between a film's theatrical release and release for home consumption. Even director Bong Joon-ho explained that he wanted to see his film on the big screen (which director wouldn't?) but that he also respected Netflix's solid stance to allow its 93 million subscribers access on the same day. This is a stand-off of epic proportions, which will no doubt lead to significant changes in the future.

The Other Losers In The Streaming Revolution

Amazon and Netflix are clearly winning, cinema chains feel scorned and major studios are facing serious competition. But there's also another forgotten victim of the unstoppable surge of the ballsy newcomers. By filling in those gray areas, streaming services might be providing monied competition for major studios, but they're also pricing out independent distributors who focus on smaller movies — such as A24, who distributed this year's Best Picture winner, Moonlight.

Nowhere is this more evident than the festival circuit. Despite only entering the bidding war three years ago, Netflix and Amazon have dominated the acquisitions at the Sundance Film Festival for the past two years, acquiring 15 films between them for 2017 — compared a single purchase in 2015. This included Netflix's $12.5 million purchase of Mudbound and Amazon's purchase of The Big Sick for $12 million. Economically, this influx is causing overall costs to soar.

According to Variety, the average Sundance film costs double than it did three years ago. In 2014, there were no films that sold for over $5 million. Compared to four in 2015, five in 2016 and 11 this year (of which Netflix acquired four and Amazon two). This injection of cash was also responsible for Fox Searchlight's record-breaking $17.5 million bid for The Birth of a Nation last year. To put that into perspective, Little Miss Sunshine held the previous record from 2006. It sold for $10.5 million.

While it's refreshing to see interest and investment in the film industry, it's also a reminder that things aren't all positive, with a threat of serious monopolization taking place in the future. Personally, I'm torn; I believe movies should be experienced in the theater, in a welcome ritual that only enhances the levels of enjoyment. That being said, despite the controversy, the allure of sitting in my underpants with a cup of tea, logging in to Netflix and streaming Okja is too strong to ignore.

And that's why Netflix and Amazon will continue to win.

What is your stance on the rise of Netflix and Amazon? Is it good for the industry? Or is it bad?

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