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A still from Roma. The film is Nexflix’s first to be nominated for an Oscar.

Netflix faces stiff opposition despite 15 Oscar nominations including first for best picture

  • The streaming service has joined the powerful Motion Picture Association of America, but some cinemas still won’t screen Oscar contender Roma
  • Top directors including Alfonso Cuarón, Martin Scorsese and the Coen brothers have worked with Netflix

By earning its first-ever Oscar nomination for best picture with Roma, Netflix has propelled itself into Hollywood’s club of elite filmmakers, but the streaming giant’s hybrid business model still hasn’t won over its sharpest critics.

Netflix earned a whopping 10 nominations for Alfonso Cuarón’s cinematic love letter to his childhood in Mexico City, three more for The Ballad of Buster Scruggs and two for documentary shorts.

It joined the Motion Picture Association of America, the powerful lobbying group – until now the stamping ground of traditional film studios Disney, Fox, Warner Bros, Universal, Sony and Paramount.

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“Joining the Motion Picture Association further exemplifies our commitment to ensuring the vibrancy of these creative industries,” Netflix chief content officer Ted Sarandos said.

While it has progressively been welcomed at most major film festivals, Netflix still finds that Tinseltown’s red carpet is not fully rolled out – with cinemas up in arms about its position as a distribution king and A-list content provider.

Ted Sarandos (left) head of content acquisition for Netflix, and Reed Hastings, co-founder and CEO of Netflix. Photo: Chris Pizzello/Invision/AP

After the Oscar nominations came out, mega-cinema chains AMC and Regal – by far the top two in America – announced that it would not be screened in their annual best picture showcases.

AMC said that as the film was never licensed to the chain for screening upon its release, it would not show it now.

In all, Roma was shown in roughly 900 cinemas around the world more than any other Netflix film, but far short of the norm for a usual wide release. Netflix never released any box office data.

“We are beginning to have our original film offering mirror the success of our series offering for consumer enjoyment,” it said in a letter to shareholders last week. “People love films … at home and in theatres.”

A still from Netflix’s Roma.

The streaming pioneer mounted an aggressive – and expensive – awards season marketing campaign, hosting events, renting billboards in Los Angeles and even sending swag to journalists, according to reports.

Of course, Netflix – maker of hit series like Orange Is the New Black and House of Cards – has been in the film business for several years, but mainly producing documentaries.

Alfonso Cuarón with his Golden Globe awards for best director and best motion picture – foreign language for Roma. Photo: Mark Ralston/AFP

But top directors like Cuaron, Martin Scorsese and the Coen brothers (Buster Scruggs) have been turning to it more and more, finding that the company is amenable to their exacting standards.

Top acting talent has been on board for the shift as well – Oscar winner Sandra Bullock starred in last year’s cult phenomenon Bird Box.

When it published its results last week, Netflix gave more detailed viewership statistics – and said 80 million households had tuned into the film – or 58 per cent of its subscribers.

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While Netflix made some efforts to gain Hollywood’s acceptance, it only made minor concessions – and no changes to its business model.

It only waited three weeks after the release of Roma in cinemas to put it up on its platform far less than the 90 days that cinema owners ask studios to hold back.

Among the roughly 8,000 voters at the Academy of Motion Picture Arts and Sciences, who will choose the Oscar winners, there are some who believe “that a vote for Roma is a vote for Netflix … a company whose streaming model is destroying the traditional film business,” said Nicole Laporte at business magazine Fast Company.

Aswath Damodaran is a professor at New York University’s Stern School of Business.

For Aswath Damodaran, a professor at New York University’s Stern School of Business who has researched the company’s business model, Netflix’s top brass “do not want to be in the movie business. They want to be in the subscriber business.”

And with the exception of Disney – which has trump cards in its arsenal like Marvel Studios, Pixar and the Star Wars franchise – “the rest of the movie business is being destroyed” by Netflix, he said.

“Netflix is pushing up the price of production, the price of content and it’s pushing them out of the business.”

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Analysts say the platform may spend up to US$15 billion on content production in 2019 more than all the major Hollywood studios combined.

Damodaran nevertheless says he is “concerned” about Netflix’s strategy, “simply because of the amount they’re spending on content.”

While he emphasises that the company is hardly in any financial danger, investors could grow skittish if the company continues to grow without generating commensurate cash flows.

“The question I’ve always had for them is – how do you get off the treadmill?” Damodaran said.

“Subscribers have almost been conditioned to expect 100 new films – and TV shows every year. I don’t see how they can stop doing it.”