DISTRIBUTION COLLAPSE: NO…NETFLIX PAYING FOR BRAD PITT’S “WAR MACHINE” ISN’T THE BLOW TO THE SYSTEM SOME THINK IT IS…

Morning Collapsers:

Beaucoup apologies for the delay between posts.

Your faithful chronicler of narrative morphology had to take trips to the belly of the disruption beast (Silicon Valley), and then into the innards of a whole other type of gorgon (Las Vegas), but as always, he’s been on the case, never letting the sun set on a mutation, so let us not tarry…

During my time away, it hasn’t been quiet OUT THERE — TWITTER has an Interim CEO for example — but for the purposes of our research here, one event should have us all talking, because it SEEMS like a sign of the COLLAPSE, but when you look CLOSELY, it REALLY ISN’T:

NETFLIX agreed to finance Brad Pitt’s next movie “War Machine”.

For $70 million, NETFLIX pays for the film and controls worldwide rights, including a brief theatrical run, before a full-on streaming release. The film itself — although that’s not really important to our discussion here — is a satire based on late journalist’s MICHAEL HASTINGS’ memoirs about his time in Afghanistan and his interactions with later shamed General Stanley McChrystal who was going to change the face of modern war.

So what is important to our discussion here?

The fact that everyone thinks what basically boils down to a GOOD BUSINESS DECISION FOR BRAD PITT, is somehow a sign of the the COLLAPSE OF THE THEATRICAL FILMGOING EXPERIENCE. Now those signs are all around you, but this isn’t one of them. So let’s briefly deconstruct the melding of Brad Pitt and Netflix, and why this isn’t quite the GAME CHANGER, people are making it out to be:

EVERYONE PASSED ON THE FILM:

It’s not as if NETFLIX was PLAN B’s (Pitt’s own production company) first choice. PLAN B has a three-year production deal with NEW REGENCY (run by ARNON MILCHAN, he of the deep-pockets and the scathing late night email) and RATPAC (a film-funding juggernaut made up of equal parts filmmaker BRETT RATNER, DUNE CAPITAL’S STEVE MNUCHIN, and billionaire JAMES PACKER). NEW REGENCY distributes through Fox. RATPAC through Warner Bros.

Both NEW REGENCY and RATPAC passed on WAR MACHINE, likely because it was over-budgeted, political, didn’t scream immediate awards-bait, and is the kind of risky move that costs a ton to MARKET for a proper THEATRICAL RELEASE. If you’re going to go risky: GO CHEAP is the message here…

And a SIDE NOTE: I’ve heard grumbling that NETFLIX swooping in and dropping potentially $70 million in Brad Pitt’s lap puts huge pressure on the INDEPENDENT MARKET — which thrives on producing the films that the STUDIOS WON’T TOUCH — because they don’t have NETFLIX’S deep pockets. Also, these producers can’t compete with NETFLIX’S UPFRONT DEALS, because they’re reliant on international sales to cover their end. But let’s be HONEST: No INDEPENDENT FUNDER (or mix of twelve of them) is going to find $70 million+ in the couch cushions to give to BRAD PITT to film a WAR SATIRE (and it sounds like they had the chance at CANNES to do it…). The next BIRDMAN or WHIPLASH (AWARDS BAIT) will likely not go straight to NETFLIX. It may one day…but NOT YET…

So it’s not as if PLAN B went exclusively to NETFLIX, and this isn’t NETFLIX’s first pickup of a movie that opted to bypass an EXTENDED THEATRICAL, and focus on STREAMING. They’ve also picked up the Idris Elba starring “Beasts of No Nation” and Jamie Dornan’s war thriller “Jadotville.”

SO WHY ARE PEOPLE SO EXCITED?

Because it’s BRAD PITT. But in reality: NETFLIX picked up a movie that NO ONE WANTED, even if it does star BRAD PITT. But they need BRAD PITT badly. Why?

Because Netflix is DESPERATE to GAIN INTERNATIONAL SUBSCRIBERS (they’re pretty much exhausted domestically). NETFLIX plans to be a presence in Italy, Spain, and Portugal soon, and they’re trying to crack into China, even as ALIBABA is starting its own homegrown NETFLIX model. The GLOBAL AUDIENCE loves BRAD PITT. His movies generally OVERPERFORM internationally, and having exclusive rights to his new movie, is an awfully big stick to swing for NETFLIX as they try to conquer international territories.

AND HERE’S ANOTHER ASPECT OF THE DEAL everyone’s focused on, but that ALSO DOESN’T MATTER:

That somehow the “WAR MACHINE” accord made it acceptable for a movie star like BRAD PITT to opt for the STREAMING MODEL, and reject the Hollywood machine. But PLAN B and Pitt didn’t reject the HOLLYWOOD MACHINE. The Hollywood Machine rejected them, and NETFLIX played white knight. And it’s not as if Pitt isn’t going STRAIGHT BACK TO HOLLYWOOD, after this project is done, if you look at his next few films, none of them are STREAMING.

What NETFLIX proved is that if you’re A MOVIE STAR, and have a passion project no one wants to touch, they WILL LIKELY OVERPAY FOR IT.

THIS IS NOTEWORTHY. However, it’s not a MUTATION.

BRIEF SIDE NOTE: DON’T GET ME WRONG. I THINK “WAR MACHINE” SOUNDS TREMENDOUS. MICHAEL HASTINGS WAS MY FAVORITE JOURNALIST IN HIS AGE GROUP. AND DAVID MICHOD — THE FILM’S DIRECTOR — IS AS TALENTED AS ALL GET OUT. I’M NOT KNOCKING THE FILM. I’M KNOCKING THE PERCEPTION…

In many ways, NETFLIX is beginning to resemble the birth and development cycle of —

MIRAMAX AND HBO.

Not to get overly economic for a moment, but NETFLIX is still in a state of primitive accumulation. It isn’t a fully developed economy yet. It needs a tremendous amount of CONTENT to support its model; however, it doesn’t have deep enough pockets yet to outright OWN any of it.

When MIRAMAX and HBO began they were in a similar stage.

In the late 80’s-early 90’s, MIRAMAX overpaid for controversial, frequently foreign art-house films (Henry & June, Hardware, The Cook, The Thief, His Wife and Her Lover, Reservoir Dogs) and turned them into must-see events whipped up by battles with the RATINGS BOARD. They also overpaid for AWARDS BAIT and made sure it was AWARDS BAIT. No one worked harder to get their ACQUISITIONS NOTICED.

Then MIRAMAX was bought by DISNEY, at which point, they turned into TURNAROUND SPECIALISTS instead of ACQUIRERS, picking up projects (with a ton of development fees) laying dormant at other studios and reviving them (PULP FICTION, GOOD WILL HUNTING, SHAKESPEARE IN LOVE) into some of the studio’s biggest hits…

…BUT MIRAMAX began to falter when they went into CONTENT CREATION, which is the next step in the ECONOMIC LADDER.

ACQUISITION SPECIALIST, then VAMPIRIC TURNAROUND ARTIST, and then finally: ORIGINAL CONTENT CREATION. Not everyone can do it. DEVELOPMENT is a tricky and EXPENSIVE procedure, and most can’t either afford it, or do it well. This is why the BIG STUDIOS still exist: They have the deep pockets and the talent to DEVELOP CONTENT from start to finish.

Enter HBO. HBO in its larval state was a BROADCAST ACQUIRER of THEATRICAL FILMS, then it moved into the MINISERIES, SITCOM, and DRAMA GAME, and it didn’t own MOST OF THE CONTENT IT AIRED (LARRY SANDERS for example) EITHER. It was a slow, evolutionary process, that moved from THE SOPRANOS, and crystallized in the beautiful phoenix of GAME OF THRONES that you see today: A show HBO developed from the bottom up and owns FULLY.

NETFLIX has this choice:

Eventually it must begin to produce ORIGINAL CONTENT IT OWNS (remember NETFLIX doesn’t OWN most of the hit shows it STREAMS, House of Cards and Orange Is The New Black included). “WAR MACHINE” is merely the sign that NETFLIX has passed into the 2nd stage of the GROWTH MODEL. It is now in the stage of VAMPIRIC TURNAROUND ARTIST. But you can only sieve off the detritus of other’s development process for so long.

Whether NETFLIX becomes MIRAMAX (unable to pass out of the 2nd stage) or HBO (GAME OF THRONES) is the big question NOW. Because developmentally — it has to become one or the other.

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