Netflix - Do We Still Need Cinemas - Essay Example

 Netflix Verses Cinema Introduction Since its inception, the film industry has undergone a sequence of major transformative events. Some of these notable changes include the advent of video, incorporation of sound during viewing, invention of technicolour, the portrayal of films on big theater screens, and most importantly, the emergence of digital film distribution. During each of these industry-altering incidents, many often believed that the film industry did not wield the capacity to adapt and keep functioning profitably (François and Maria, 2010). However, contrary to this widespread misconception, the industry has continued to adapt to emerging changes and made equally large strides in guaranteeing consumers the entertainment they yearn for. This persistence is evident from the continued production and portrayal of movies from diverse global cultures and generation of large amounts of money from the same. In the conventional film distribution setting, cinemas or movie theaters have often been the first point of sale for movies. After cinematic or theatrical distribution, the second traditional channel comprised of broadcast via television, followed by DVDs. Majority of film producers opted for these three modes of distribution, in an attempt to ensure optimal viewership and reap maximum profits. Recently, however, the pervasive nature of the internet has influenced film distribution, paving way for digital online platforms. The latter include video on demand (VOD), mobile applications, and live streaming. This paper seeks to provide insight into the evolution of film distribution within the context of traditional cinema versus popular digital platform, Netflix. Even though Netflix is a key player in film distribution, cinemas are still a vital part of the entertainment industry and should not be entirely written off. Background Traditional Film Distribution Pioneers of movie distribution since the advent of the film industry, were traditional theaters and cinemas. Cinemas were rather popular, as people increasingly embraced movie going as a weekend form of relaxation with family members and friends. The earliest theaters did not project movies on a screen. Rather, the films were showcased using peep-show machines referred to as kinetoscopes. The latter were developed by Thomas Edison and W. Dickson, and they remained popular till the end of the 19th century. As the world ushered in the 20th century, similar peep-show gadgets referred to as Mutoscopes were introduced in continued popularisation of theatrical portrayal of film. During the early 20th century, that is, around 1913, theaters began building large spaces to attract larger audiences. Between 1914 and 1917, film producers perfected the art of silent comedy, portrayed on relatively large theater screens. In France from 1918 to around 1920, war newsreels become widely popular, as people chronicled the war. The latter paved way for theatrical portrayal of motion pictures, with Eastman Kodak developing kodachrome colour film. By the 1950s, movie theaters had evolved extensively, showcasing 3-D colour feature films. In 1953, 20th Century Fox developed CinemaScope, which made use of anamorphic lenses thus creating the illusion of bigger screen projection. The other traditional mode of film distribution, that is, TV also attained a significant milestone in the same decade, by broadcasting throughout with colour. In 1972, cable service offering pay TV was developed, while in 1975, Sony developed VCRs making it possible for people to record and view videos at home. Other notable developments in traditional film distribution included the public portrayal of digital cinema by Sony Pictures Entertainment and Pacific Bell, followed by the launch of DirecTV in 1994, CD-ROM disks in the subsequent year, and the 1998 introduction of DVDs. The beginning of the 21st century saw continued growth in popularity of DVDs for home entertainment, coupled with worldwide adoption of digital cinema (Christopher, 2012). Some of the most popular cinema houses around the world include Cinemax, Fox, and Regal. These film distribution holdings have movie theaters in various regions around the world. Even though the theaters may vary from one company to another or one region to another, they share numerous characteristics. Key among these similar features include adding value to movie watching by providing viewers with accessible and comfortable locations, where they can view both recently released films and remakes of the same. In addition, most of the movie theaters are often equipped with up to date technological inventions (Christopher, 2012). For instance, in contemporary cinema, most movie theaters have opted to shift from analogue to digital film projection. Most theaters have also developed XD cinema experience. In the latter, the screen covers an entire wall from the floor to the ceiling. This is done in the effort to ensure that viewers are able to experience a movie in its best form, as is often the case with advanced technical provisions. One can also not overlook the fact that modern cinema companies are transforming their auditoriums through installing stadia seating. This provides comfort and improves the movie watching experience, since every member of the audience sees the screen clearly without being impeded by the person in front. It is important to point out that the cinema environment within the global context still wields significant film distribution potential. For instance, in 2013, movies released via box office internationally accrued sales of about $36 billion. This was a 4 percent growth over the preceding year ticket sales. Even greater box office growth was achieved in China, attaining $3.6 billion ticket sales, which was 27 percent more than in 2012. Box office cinema in the global environment has grown by 33 percent over the past half decade, especially due to continued growth in markets like Mexico, Russia, and China (MPAA, 2013). These statistics clearly demonstrate that cinema is still a vital part of film distribution. In addition to movie and location quality considerations, cinemas or movie theaters place much emphasis on the customer and catering service provided to moviegoers. This is evident from the presence of concession stands offering confectionaries, drinks, and movie paraphernalia. Provision of these services shows that, movie theaters foster relations among moviegoers, between service providers and the moviegoers, as well as, between the film distributor and confections or grocery retailers. Cinemas have, therefore, evolved over time, but maintained their fundamental objective of providing communal film entertainment, while benefiting various stakeholders in the film industry including affiliates like grocers and confection suppliers. Rise of Netflix Given the comprehensive information on traditional film distribution approaches, with particular focus on cinema, it is imperative to examine the other end of the spectrum, that is, the digital distribution channel. The latter is best exemplified by Netflix, an internet based movie streaming platform. Netflix was conceptualised as an online extension of the conventional video renting service. The company began its operations in the year 1997 by providing DVD services ordered via mail (Charlotte, 2011). In 1999, Netflix launched a service facilitating online movie subscription for clients. This allowed the company to offer viewers unlimited movie rentals after making relatively low contribution fees per month. In the subsequent year, Netflix launched an individualised film recommendation system. The system made use of subscribers’ movie ratings, to precisely calculate and further recommend their best film choices. This enhanced the platform’s popularity further, since subscribers felt that they were getting value for their money and they did not have to fuss over the movies to rent for later entertainment. It was in the year 2002 that Netflix made its IPO and at this point in time, it had 600,000 subscribers in the United States (Netflix, 2014). The other significant milestone attained by Netflix was in 2010, when the online movie streaming service became available on internet connected gadgets like the iPhone, iPod Touch, and iPad all by Apple, as well as, Nintendo Wii. It was also during this year that the digital movie platform officially launched its services in Canada. In 2011, the platform was introduced to the Caribbean and Latin America regions, registering even more members. The on-demand movie service was made available to the European market, targeting Ireland, the United Kingdom, and Scandinavian nations. Following its extensive network and exceptional work in providing accessible and affordable movie entertainment to subscribers, Netflix was awarded an Engineering Emmy in 2012. The following year was equally successful, as Netflix extended its services to Netherlands. By the end of the year, the company got 31 award nominations for providing several TV comedy and drama series, as well as, documentaries. It effectively became the first online TV network to be nominated for such awards. By 2014, Netflix had expanded its service provision to six additional European nations, including France, Germany, Switzerland, Belgium, Austria, and Luxembourg. The online service currently has more than 50 million subscribers around the world, clearly demonstrating its immense influence in the film distribution industry. Netflix and other online film distributors have made it possible for interested parties to stream their favourite TV series and movies from their computers and mobile devices in an instant. This has become popular owing to the convenience it presents, especially in a society where people are increasingly becoming used to accessing virtually everything by simply demanding for it (Netflix, 2014). Current State of the Film Industry In 2014, attendance of movie theaters in the US dropped by more than 5 percent. The drop is significant, despite the fact that the American populace has continued to grow vibrantly over the past twenty years. Consistent attendance of movies by young couples has also continued to decline. It is apparent that movie theaters are no longer as popular as they used to be. There is a clear shift of film consumers from traditional patterns like going to cinemas, as more of them embrace video streaming based on one’s demand. This is fuelled further by the easy accessibility of mobile gadgets like smartphones, which allow one to stay entertained at any time and any location. Notwithstanding, Netflix and other digital film distributors offer a wide variety of movies and TV shows. The company has even opted to venture into actual production of its content targeting youths aged 12 to 24 further posing a threat to traditional film producers and distributors (Matheny, Vivanco and Maleter, 2003). Comparative Analysis It is imperative to note that there are a lot of changes that have been introduced by Netflix compared to traditional ways of movie distribution which is explained herein. Digital Distribution (Netflix) Value In order to show the differences, it is important to consider the average price of a movie in America is about $7. This was evident from the sales that had been made in 2014. In the theaters, it will cost a normal family about $40. Considering that people in the theater are supposed to take a popcorn and Soda, this raises the average price of watching a movie. This means that it will cost the family about $100. It is crucial to note that Netflix has introduced a better and cheaper way of watching enjoying movies. This has become one of the best ways of watching movies. It is also clear that the cost of flat TV screens has dropped and many families are able to afford decent entertainment center. This means that a family will manage to have a good home theater they can use to enjoy movies instead of going to the cinema. This means that there is a better and cheap value for using Netflix by families compared to watching movies. It is estimated that a family can use about $900 every year, which is extremely expensive. However, while using Netflix, a family will use and average of $350 every year on entertainment. This is inclusive of all subscriptions as well as the marginal electrical cost (Matheny, Vivanco and Maleter, 2003). Nevertheless, there is value in watching movies from the Cinemas. This is because of the fact that from the theatres, there are a lot of intangibles that make it different from watching at home. For instance, theatres provide a sense of community because one watches a film from a social setting. However, this is still not as good as using Netflix. This is attributed by the fact that there are numerous disruptions that are not there at home. There are buzzing phones all over which many people are using and sometimes one can have a problem of concentrating due to such kind of disruptions. Despite the fact that there is a social aspect that is considerably imperative while utilizing the theater, there are annoying things which make it impossible to concentrate. For one to enjoy a movie, there is need to not only consider the quality of the picture but also learn from it. There are many moral aspects that are considered to be learnt from a movie which can only be gotten at home. Some movies will assist families to be more cohesive and that is why Netflis has really simplified and added value to family values. In the theaters, people have taken advantage of the dim lighting to misbehave, which does not add any value to the family (Graeme and Jonathan, 2010). Therefore, it is crucial to consider Netflix as a better option than the theaters. Additionally, it is extremely annoying when one is watching a movie from the theater and people are applauding while others are screening especially when watching a horror movie or a comedy. It is therefore crucial to note that there is a huge difference between Netflix and the theater. This is evident from that fact that Netflix is mostly used for domestic consumption. This means that there is control of what a family can watch. Additionally, a family can have rules that can be followed while watching like no use of phones. In theaters, one is not in control of sound unlike home and one cannot miss any parts when one is going to the bathroom. This is because with Netflix, one can either pause the movie or rewind to the place where they left which is not possible in theaters. With Netflix one is able to find out more about the actors without worrying that another person will be offended. Nevertheless, there is still value in watching movies from theaters, which is discussed hereunder. Traditional Distribution (Cinema) Value It is said that “old is gold” and since Cinema brought films to the present world, it is imperative to save this channel of entertainment. Therefore, there are numerous ways that cinemas can operate in order to save their reputation and compete with the new improved technology of home theaters. It is evident that Netflix has threatened theaters since many people in the U.S have adopted watching movies from their living rooms. Therefore, cinemas have improved their presentation by utilizing color film and wide images. There is also limited restrictions on violence and sex compared to the past, thus people are more attracted to the theatres. This means that theaters are striving to offer something which is not offered by television and Netfix at large. Cinemas have also introduced 3-D which is attracting a huge crowd. This means that there is a huge effort being made by theater owners in order to attract more people to their establishments. Creativity is one of the major ways that they are doing this which is extremely imperative (Charlotte, 2011). It is, therefore, imperative to note that movies still have value and it is worth going to watch them from the theaters. It is easy to argue that Netflix has offered more choices in entertainment channels since it is cheaper and unique. Nevertheless, it is still worth going to the theaters. Having improved home theaters, some of the movies are only made to be screened on huge screens which cannot be offered by the normal size television. Movie theaters are now upgrading to include better features in order to accommodate more people especially the youths. Therefore, most of the theaters have installed digital gadgets that will assist them in presenting a better view. Today, theaters are presenting their films in a better way and also catering for the whole experience of watching movies. Many organizations are offering good food and drinks in order to have their organizations visited. More importantly cinemas offer people a platform to socialize and this is incomparable to watching from home (Charlotte, 2011). Film Distribution Perspective It is crucial to note that traditional distribution is costly. This means that this mode of distribution does not get a lot of returns. Additionally, some of the people that usually use it do not have the necessary or expected gains. There is little attention offered to the theaters, especially their advertisements and this has caused a lot of imbalance compared to Netflix. The film distribution should embark on taking control of their products. This is unlike digital distribution which makes sure that there is money getting back to the filmmaker. However, digital distribution makes a lot of money, but that does not mean it will make much money. Many filmmakers do not benefit much from this medium of distribution. This is because people tend to share files of the movies instead of getting them from the expected sites. This method is still new to many people and do not know how to generate money from it. Additionally, the people that are using the service of digital distribution are adamant about the use the internet as a source of entertainment. People are also afraid of disclosing their personal information while paying for subscriptions and other internet contents. People have not gotten a chance to enjoy films for free and this is a huge issue for the people (Ian, 2013). Using cinemas might present a problem of getting the right audience. This is because there is a limitation to the people that can access this mode of entertainment. Mostly theaters are located in precise locations and this might cause a problem of reaching the target audience. This is an issue that has affected not know if their work will reach the public. However, digital audience has eliminated this worry since many people are able to download and watch it. This ensures that the content reaches the necessary people and target audience. The film is usually a click away and this makes distribution easier. However, the digital mode of distribution is more competitive, making it extremely difficult for people to watch a certain film. Therefore, filmmakers have been forced to make better marketing strategies in order to have their movies watched (Graeme and Jonathan, 2010). Conclusion Based on the discussion above, it is evident that the traditional mode of entertainment delivery has declined. Netflix has taken over the film distribution industry becoming one of the most principal competitors in the world. It is therefore imperative to note that utilization of new and advanced technologies from dissimilar eras has revolutionised the way people get access to video entertainment. Nonetheless, this rapid development of digital film distribution does not entirely render traditional distribution systems useless. Theaters and cinemas must make concerted efforts to remain afloat in the film distribution industry. Through aggressive promotion measures, these distributors can convince consumers of the communal importance of cinemas and theaters, where entertainment can be enjoyed in unison, as originally intended. Cinema creates an aggressive nature in a culture where growth is the central aspect. Therefore, the comparative analysis between the digital film distribution platform, Netflix and traditional cinema, clearly demonstrates that the latter still has numerous benefits to offer. Bibliography Charlotte, C. 2011. Cinema distribution in the age of digital projection. Post Script, 30(2), 82. Christopher, J. 2012. The adoption of social networking technologies in cinema releases. Information technology and management, 13(3), 167-181. François, A., and Maria, T. 2010. Cinema beyond film: media epistemology in the modern era. Amsterdam: Amsterdam University Press. Graeme, H., and Jonathan, R. 2010. Cinema and Landscape : Film, Nation and Cultural Geography. Bristol, London: Intellect Ltd. Ian, C. 2013. Where Is National Cinema Today (and Do We Still Need It)? Film History, 5(1/2), 19-30. Matheny, S., Vivanco, F., and Maleter, A. 2003. Film Distribution Offers Niche. Satellite News. 26(46), 1. Motion Picture Association of America (MPAA). 2013. Theatrical Market Statistics 2013. [pdf]. Available at [Accessed 4 January, 2015]. Netflix. 2014. A Brief History of the Company that Revolutionised Watching of Movies and TV Shows. [online]. Available at [Accessed 4 January 2015]. Read More