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Disruptor Netflix Joins Big Studios at the Table With MPAA Membership, Analysts Say

Yalitza Aparicio as Cleo, Marco Graf
Photo by Carlos Somonte / Courtesy of Netflix

Netflix is starting to look a lot like the media institutions it has been disrupting for years.

In one fell swoop on Tuesday, the streaming giant racked up an impressive 15 Academy Award nominations, including a best picture nod for Alfonso Cuaron’s black-and-white, Spanish-language drama “Roma.” Hours later came official word that the company had joined the Motion Picture Association of America, a trade group that issues content ratings for movies and represents Hollywood’s interests in Washington. It’s the first digital player to do so, potentially paving the way for an Amazon or an Apple to follow suit.

Breaking through the exclusive circles of the Academy and entering into the MPAA fellowship further establishes Netflix as a storied media brand. Is it a sign that a tech player that thrived on being an iconoclast that happily squabbles with legacy industries like the movie theater chains has started to mature into something different? Has Netflix’s rebel spirit been co-opted?

After all, the MPAA is a group populated by Netflix’s frenemies, the major studios: Disney and 20th Century Fox (soon to occupy one slot, post-merger), Warner Bros., Paramount, Universal and Sony Pictures. Joining those ranks is a significant moment in Netflix’s journey to gain the respect of its peers as a cinematic force (despite its nearly-invisible footprint in movie houses), industry analysts told Variety.

“Netflix joining the MPAA is as much about the larger institutional change at Netflix as it is about the other studios adapting to the business model Netflix created,” said Rajiv Menon, a digital and emerging platform consultant with a PhD in American culture from NYU.

“Their commitment to ‘Roma’ shows a pretty radical change in what Netflix wants to provide as a cinema-going experience,” Menon said of the unprecedented theatrical push and and generous awards campaign spending on the Cuaron film, “but those other institutions are already getting in Netflix’s game.”

He refers, of course, to the oncoming glut of in-house Netflix competitors from Disney, Warner Media and Comcast, which will roll out in the next two years.

Kay Koplovitz, a former chairman and CEO of USA Networks, said the MPAA move “isn’t surprising at all. In the last few years they’ve demonstrated their ability to mount award-winning series and now movies. But I disagree with the premise that they’re just like any big media company. The enormous data configuration they have on subscribers alone puts them ahead of the pack.”

Netflix’s entry is welcome news for the studios in one respect. It means that they won’t have to scramble to come up with the millions of dollars in dues that will be lost once Fox is absorbed by Disney. But Netflix gets something out of the deal too.

The MPAA’s policy arm works relentlessly to combat global content piracy, which will top $50 billion between 2016 and 2022, according to a 2017 report from Digital TV Research. That will mostly affect digital players, the report found. Netflix has been subject to several data breaches, instances of piracy that allowed entire seasons of shows like “Orange is the New Black” to leak online before they premiered. If it wants to crack down on that kind of theft, it could use the expertise of some expert Beltway wheel-greasers. Keeping its content secure will only grow in importance as Netflix delves deeper into the original content space. The company’s upcoming film slate includes the Ben Affleck heist film “Triple Frontier” and the Martin Scorsese crime drama “The Irishman” starring Robert De Niro and Al Pacino.

Netflix COO Ted Sarandos hinted as much in a statement, saying joining the MPAA “further exemplifies our commitment to ensuring the vibrancy of these creative industries and the many talented people who work in them all over the world.”

Mary Murphy, an associate professor at USC’s Annenberg School for Communication, said the industry can “either build a wall to block all the disruptors or open up to all the creative intruders.”

For now, Murphy was reminded of an old movie quote: “Keep your friends close and your enemies closer,” she said