Netflix isn’t the first vidtailer to discover how tricky the acquisitions biz can be. Around the same time Netflix was ramping up its now-shuttered Red Envelope shingle, Blockbuster was getting out of the biz.
Blockbuster launched DEJ Prods. in 1998, acquiring or co-financing a wide range of pics before selling the shingle to First Look Studios for $25 million in late 2005. Pics ranged from straight-up genre fare to Oscar-winning “Crash” at the tail end of its run; vidtailer touted the program as proof of its commitment to indie filmmaking.
Netflix’s goals for Red Envelope were similar: Increasing its breadth as a way to distinguish its offerings and build customer loyalty. The chance to schmooze with filmmakers at Sundance was a bonus for staffers.
However, the Netco ran into its own stumbling blocks — studios were uneasy about the fact it was competing against them — and ultimately decided to fold the label last week. Red Envelope partnered on several well-reviewed offerings with limited theatrical release, but none of its films made a big splash: Its biggest releases include “Sherrybaby,” “This Film Is Not Rated” and “4 Months, 3 Weeks and 2 Days.”
Netco maintains that the label proved there was money in indie fare. But from now on it will be focusing its energies on streaming films rather than finding the latest undiscovered gem.