The Sundance Film Festival, the indie film awards and showcase held annually in Utah, has just seen the first instance of streaming services such as Amazon Studios (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) buying up films faster than traditional distributors. Following Netflix’s announcement of a investment to the tune of 6 billion dollars for new content, the studio’s eagerness to snap up new, potentially subscriber-encouraging material should be no surprise. Netflix’s traditional modus operandi has been to premiere films alongside their theatrical releases, though this has occasionally led to boycotts by theatres who claim that their business model is being negatively affected by these side-by-side releases. Amazon, on the other hand, has been preferring to act like a traditional distributor, pushing out films following theatrical release dates. Some films have turned down Netflix’s offers, seeing the commercial flop yet critical success of Netflix Original “Beasts of No Nation” as a warning sign.
It shouldn’t be much of a shocker about streaming making its presence known in the distribution world. Netflix and Amazon have experienced slow rises as traditional TV has begun experiencing declines. This, in part, is likely due to critically acclaimed content on their parts such as Netflix’s “Orange is the New Black” and “House of Cards” and Amazon’s “Transparent” and their adaption of “The Man in the High Castle”. However, it also relies heavily on the fact that Netflix isn’t at the whim of advertisers to push content that will guarantee viewers, and Amazon’s promotion of their own studio through their membership service Amazon Prime has assisted with viewership.
In the case of Netflix, without the need to bow to advertising, they can allow for longer content and disregard ratings systems that traditional TV has relied on so long, specifically the much-maligned Nielsen ratings. While not all of their shows may end up being successes, their hot streak so far has proven otherwise. By developing their own catalogs, Netflix and Amazon have made themselves as distinguishable as HBO and Starz without the minimized content for the sake of ads that networks such as CBS and ABC have long practiced. With streaming making itself known in the bidding war for the content, TV will have to made radical changes to their consumer model if they want to compete.