retail news in context, analysis with attitude

by Kevin Coupe

The Los Angeles Times has a story about how Netflix, frustrated by the fact that its original movies are blocked from playing in major theater chains because they are available for home viewing at the same time, has been exploring the idea of buying a movie theater chain in Los Angeles in New York “that would enable it to screen a growing pipeline of feature films and documentaries.”

One of the reasons for wanting movies to play in theaters would be to make them eligible for Academy Award nominations as well as for major film festivals such as Cannes.

The Times writes that “the idea of Netflix buying a theater chain would mark a new phase in the company's rapid ascent to become one of the most powerful players in the entertainment industry.

“Netflix has attracted its 125 million subscribers worldwide by releasing dozens of original films and TV shows annually on its fast-growing streaming service, bypassing the traditional theatrical market, as well as the cable bundle. Netflix has promised to spend as much as $8 billion this year on original and licensed content for its subscribers who pay a monthly fee to binge shows and films.”

When I read this story, I thought immediately of Star Trek II: The Wrath of Khan, in which James T. Kirk explains that as a cadet he finessed the Kobayashi Maru “no win scenario” test by reprogramming “the simulation so it was possible to rescue the ship.” Kirk rejects the notion that this was cheating: “I changed the conditions of the test; got a commendation for original thinking. I don't like to lose … I don't believe in the no-win scenario.”

That’s essentially what Netflix seems to be considering, and what more retailers ought to consider when presented with what seems to be a no-win scenario.

Change the rules of the game. Or, at the very least, don’t play the game that the competition wants to play.

It is an Eye-Opener. And it seems entirely logical.

Oh, and one other thing …

I was interested to see a story in the New York Times about Amazon’s latest movie investment. (Amazon, by the way, has avoided the Netflix problem by being willing to allow theaters to show some of its movies - like The Big Sick and Manchester by the Sea - before making them available online.)

The Times writes that Amazon has just signed a 15-year lease for Culver Studios, a 14-acre studio and backlot that is where Citizen Kane, Gone With The Wind, Raging Bull and E.T. the Extra-Terrestrial, among other films, were filmed. Amazon reportedly plans to move all of its entertainment division personnel onto the lot.

It is yet another example of how companies such as Netflix and Amazon are revitalizing the movie business, and in this case, giving new life to old facilities that have seen better days.

It so happens that during my last year at Loyola Marymount University, I lived in Culver City, and I could see from my street the lion that was perched atop one of the buildings at the nearby MGM backlot. Learning that these places are becoming vital and lively again just makes me happy.
KC's View: