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Can Netflix Take Over Hollywood?

The streaming service is producing more content than ever. The problem is that a lot of it is mediocre.

Matt Kennedy/Netflix

Next month, the Cannes Film Festival will kick off without any films from America’s largest film studio. That wouldn’t be Paramount or Disney or Fox—that would be Netflix.

It’s a particularly 21st century kind of culture clash. The tiff between the festival and the upstart media company began a year ago, when Netflix refused to make some of its titles available for theatrical distribution in France. Cannes responded by requiring that every film shown in its festival be played in movie theaters across the country. Netflix fired back by pulling out of the festival altogether, after it refused to distribute its movies, including Orson Welles’s long-lost The Other Side of the Wind and Alfonso Cuaron’s Roma.

For Netflix, a feud with the world’s most prestigious film festival is a branding opportunity. “[T]he festival has chosen to celebrate distribution rather than the art of cinema,” Netflix’s chief content officer Ted Sarandos said. “We are 100 percent about the art of cinema. And by the way, every other festival in the world is too.” As it has established itself as a premier home for original content, this has been Netflix’s core message: A few cinephile dinosaurs might be concerned about a change in medium, but its platform supports high-quality art for the masses.

As The Ringer’s Sean Fennessey reported last week, the company, has, in the first four months of 2018, released exactly as many movies as the six major film studios combined. By the end of the year, it will have released nearly 60 films. Its television arm, meanwhile, racked up 91 Emmy nominations in 2017. On Monday, Netflix announced that it would sell another $1.5 billion in junk bonds—it raised the same amount only a few months ago—to produce even more content.

Netflix isn’t a martyr, whatever Sarandos says. The case could be made that it is the most important mass entertainment company in the world. Still, Netflix’s real revolution has been one of distribution, rather than in the “art of cinema.” And with a Disney streaming service coming, Netflix’s agnostic approach to quality may come back to haunt it.

Although the company has been around for over two decades, Netflix’s rise to the top of Hollywood happened in a remarkably short period of time. House of Cards, its first foray into original content, debuted only five years ago. By shelling out cash to produce more shows and movies, it has managed to grow so rapidly that even its own executives are surprised. “We’ve outperformed the business in a way we didn’t predict,” David Wells, Netflix’s chief financial officer, said last week, after the company announced that its subscriber base had increased by over seven million in the first three months of 2018, its largest increase ever.

The company now has more than 120 million subscribers worldwide, making it comparable to Amazon Prime, which has over 100 million global subscribers. And Netflix is keeping its foot on the gas, for good reason.

Though still in its infancy, streaming television is very crowded. Amazon has invested heavily in its Prime Video offerings, and, like Netflix, has also made movies a priority. (Unlike Netflix, many of Amazon’s movies play in theaters and have arguably been better received—Amazon Studios is responsible for Manchester By The Sea and The Big Sick.) Hulu has become an important competitor, both because of its network TV offerings and, increasingly, because of original shows like The Handmaid’s Tale.

And, sometime next year, Disney will unveil its streaming service, which is expected to be a major competitor. As Derek Thompson outlined in The Atlantic earlier this month, Disney could make offerings from its lucrative brands—it owns both Marvel Studios and the Star Wars franchise—exclusive to its new platform, garnering millions of new subscribers and hundreds of millions of dollars in revenue.

For Netflix, original content is an important safeguard. It needs to create new things for people to watch on Netflix, or else people will watch other new things on Amazon or Hulu. But this has led to a new version of the old “57 channels and nothing on” problem, to borrow from Bruce Springsteen. Over the last few years, it has splurged on just about anything, with a lot of the results—particularly in its film division—being pretty mediocre. Fennessey thoughtfully dissects the problem, using the Netflix-produced Jason Sudeikis vehicle Kodachrome as an example:

Kodachrome is emblematic of the morass of Netflix movie offerings. Neither comedy nor drama, neither special nor terrible, neither quotable nor truly forgettable, it is the embodiment of so much we consume in 2018; it’s just sort of … there. In theory, this makes for a convenient experience and a low-stakes bet. There’s no $17 ticket, no $6 popcorn, no parking structure, no babysitter, no emotional gamble, no accessibility issues at all. Ostensibly, this approach works incredibly well for TV series, where the chance to binge leads to satisfying, controlled consumption patterns for subscribers and extended periods on the service. It’s mutually beneficial. Movies are different. They’re immersive, designed as a single-serving experience.

While there is some hope that movies from Cuaron and Paul Greengrass will reverse the company’s movie losing streak, the bulk of Netflix’s films have a Kodachrome problem—when they’re not total duds like The Cloverfield Paradox. Netflix’s TV arm, by contrast, has produced plenty of hits, like Stranger Things, American Vandal, The Crown, and BoJack Horseman. But it has just as much crap—Iron Fist, Disjointed, Fuller House—along with a host of shows no one has heard of, like Between and Haters Back Off.

What’s maybe most surprising is how unoriginal most of the work is. While Stranger Things and American Vandal are unique products of the streaming era, nearly all of the shows on Netflix would be at home on a network. (The Get Down, another exception to the rule, was cancelled after one season because it was too expensive.)

In the past, technological and financial changes—such as the demise of the old studio system—have altered the art forms themselves. That has occurred to a certain extent in the streaming age, but it is also true that Netflix for the most part has aped existing trends.

Amazon has shown some discomfort with this model (owner Jeff Bezos reportedly wants it to concentrate on Game of Thrones-style mega-hits). For Netflix what matters is eyeballs first, everything else second. While the company keeps its data under wraps, it has used its popularity as a defense. When critics mocked Bright, its bizarre buddy-cop science-fiction show, it claimed that the movie was a hit and that the “critics were disconnected.”

While Netflix’s trove of data undoubtedly plays a role in its decision-making process, its content creation and acquisition suggest that it’s far from a perfect science. Instead, Netflix’s rush to create as much content as possible reveals a company that’s throwing everything at the wall. At the same time, it is locking out competitors (which is why it keeps signing people like Ryan Murphy and Shonda Rhimes to massive contracts) and attracting new users (Adam Sandler fans have to watch movies somewhere, right?). Netflix is good at recreating an existing film and television world, with all the blandness that implies. But it isn’t so great at creating a new one.