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With Millarworld, Netflix Makes a Risky Bet for Its First Acquisition

So much energy has been expended over the past 12 months anticipating the potential acquisition of Netflix by conglomerates like Disney that Monday’s announcement by the streaming service made for a surprising reversal: Netflix turned out to be a buyer.

What also made the streaming service’s first-ever acquisition in its 20-year history so counter-intuitive was that CEO Reed Hastings has always assiduously played down any acquisitive tendencies. If anything, Hastings has always positioned Netflix as something of an island to itself, as if it was so successful at its core business that there was no need to attach itself to something else.

What wasn’t anticipated either was the object of Netflix’s affections: Millarworld, a comic book publisher that has generated some fairly compelling intellectual property capable of inspiring film-friendly franchises like “Kick-Ass” and “Kingsman.” As accomplished as founder Mark Millar is, hearing Netflix content czar Ted Sarandos hail him as a “modern day Stan Lee” may have sounded puzzling to those who had never heard of his low-profile company.

But that doesn’t mean Netflix’s strategic rationale isn’t clear. Instead of getting gobbled up by Disney, Netflix is trying to become more like Disney by bringing in a superhero factory capable of filling the seemingly bottomless appetite Hastings and Sarandos have for original content.

Marvel set the template for what Netflix could do with Millarvision, generating not just film or TV vehicles for heretofore untested properties like “Jupiter’s Legacy” or “Empress,” but an entire cinematic universe in the mold of what Warner Bros. is doing with DC Comics. No major studio can go without these interconnected collections of blockbusters dense with the mythologies and special effects that have an excellent track record doing something that’s become increasingly difficult in our fragmented media age: putting young butts in theater seats. Cinematic universes are almost as important to preserving the theatrical business model for the conglomerates as sports rights are to maintaining the value of its pay-TV channels.

What’s more, Hollywood is getting increasingly adept at translating cinematic universes that were once strictly the domain of film to TV. That must make cracking the superhero code an irresistible challenge for Netflix, which conquered TV years ago and stands ready to do the same for film. What better way to knit together the inevitable one-two punch than with a cinematic universe all its own, courtesy of Millarworld?

In one respect, this is also the right time for Netflix to take on Millarworld because the company is currently well into a transitional phase that Sarandos has been handling brilliantly: weaning Netflix off the licensed catalog shows and movies that helped build their subscriber base and becoming more reliant on its own original content.

Marvel is currently well represented on Netflix through its roster of “Defenders” original series, but the streaming service won’t be able to depend on that kind of content in the future. Disney and other conglomerates are waking up to the fact — perhaps a little too late — that they’ve cannibalized their audiences in pursuit of the short-term gain that comes from licensing revenue, and are better off keeping their content in-house, whether in the pay-TV ecosystem that has been even more valuable to the bottom line than Netflix, or with their own fledgling direct-to-consumer efforts.

So Netflix needs to make a Marvel of its own, and that’s where Millarworld comes in. No doubt Sarandos is armed with data from the Marvel content on Netflix that made Hastings comfortable signing off on the acquisition, though it probably doesn’t take fancy algorithms to know that building a cinematic universe is a good idea.

But is the Millarworld acquisition a good idea? It’s difficult to assess just how much of a risk is being taken here without knowing the price Netflix is paying. Millarworld could be a total bust — but a negligible one if it came cheaply.

Still, it’s worth questioning a presumption underlying the deal: that the superhero genre that has been so culturally dominant for most of the 21st century will stay that way in the future. Look what happened at the box office this past weekend: Sony and MRC saw the linchpin of their planned cinematic universe built around “The Dark Towerget off to a wobbly start.

The Dark Tower’s” $20 million opening is not a bad number, considering production costs were modest relative to the typical blockbuster, but this puts Sony back in the same territory it was in last summer with the underwhelming performance of its “Ghostbusters” reboot, also intended to be the first step toward its own cinematic universe. And these false starts are limited to Sony either; earlier this year Universal got lackluster results from its reboot of “The Mummy,” part of the studio’s Dark Universe.

As tremendous as a cinematic universe can be for a studio, these are not guaranteed successes. Yes, the recent stellar outings of “Wonder Woman” and “Spider-Man” tell us there’s still some power left to be unleashed, but when you consider the sheer volume of superhero titles that will bombard theaters well into the next decade as their mixed track record, Netflix’s Millarworld move is hardly a sure thing.

No doubt Sarandos will put his own unique spin on the deployment of a cinematic universe; Netflix never does anything the traditional way, and bypassing theaters is probably just the beginning of how that will play out. But given it will probably be 2019 at the earliest when a new Millarworld property will appear on the streaming service, it’s worth wondering whether Netflix is a few years too late to a trend that may already be losing steam.

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