Netflix and Amazon are scaling up in order to compete directly with studios, according to the findings of a new report by Ampere Analysis.
It notes that Netflix has long been by far the largest SVVOD commissioner of Original movies, which have consistently accounted for around 25% – 30% of its first-run commissions each quarter since Q4 2018. A bumper slate of new projects in Q1 2021 represents the highest number of movie orders in a single quarter.
Now Netflix is looking to play the studios at their own game by developing new movie franchises or acquiring franchise-building Intellectual Property (IP). Franchise building is a key driver of Netflix’s movie commissioning strategy. Of Netflix’s Original movie commissions made this year, 46% have been remakes, sequels, spin-offs, or adaptations of existing IP.
Netflix has been adopting an acquisition-to-Original model in its movie commissioning strategy, acquiring the rights to make sequels to existing box-office hits.
Meanwhile, Amazon Prime Video continues to focus on the markets where its parent company has the greatest foothold. It is instead looking for ready-made franchises to acquire to boost its already strong position in offering a huge choice of movie content.
MGM’s studio’s film library was the driving motivation behind Amazon’s recent acquisition. Prior to the expiration of the company’s licensing deal with MGM subsidiary Epix in June 2021, Prime Video was already home to over 70% of all MGM-distributed movies available on streaming platforms in the US. The permanent addition of those movies alone to Amazon’s catalogue would see its store of in-house movies overtake that of Netflix. With a touted further 2700+ movies in the MGM vault, the acquisition will substantially increase Amazon’s already considerable movies offering.
Commenting on the findings of the report, Alice Thorpe, analyst at Ampere Analysis, said: “While the platforms’ strategies necessarily differ, both Netflix and Amazon are pursuing the same goal of competing with the traditional studios on the level of tentpole titles. Netflix can now lay claim to true studio status in terms of the global production infrastructure it has established in recent years, but it is still chasing franchise success when it comes to movies. What’s clear from its recent commissioning is that the platform is not just relying on sequels to the likes of comic book adaptation ‘The Old Guard’ to make that happen; building local franchises with crossover appeal in multiple territories is also key to its strategy. Meanwhile, Amazon is buying into the franchise game to enable it to scale up from its critical successes. The global brand recognition that comes with a property like Bond will help further assert Prime Video’s independence from Amazon’s ecommerce business by making it a destination for bonafide blockbusters as well as buzzy indie titles”.
