Why the Film Festival Circuit Is So Important for Video Streamers

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Cheyne Gateley/VIP

Three of the biggest fall film festivals — Venice, TIFF and NYFF — have helped the big streamers bulk up their original movie catalogs with prestige and potentially awards-contending films.

Netflix was particularly active in the film festival market. It picked up drama “Malcolm & Marie,” featuring Zendaya and John David Washington, for $30 million, a big value by festival standards. The company also got the rights to “Pieces of a Woman” (featuring Vanessa Kirby and Shia LaBeouf) and “Shiva Baby” (starring Rachel Sennott), both of which seem to be generally embraced by critics so far.

Meanwhile, Amazon scooped up films showing at Venice and TIFF, though Regina King’s “One Night in Miami” may be the company’s most significant get. That film, which marks King’s directorial debut, generated largely positive critical reception as of early October and may even help Amazon’s chances of not walking away empty-handed again at the Oscars.

That film reportedly cost Amazon eight figures, which makes it one of the bigger purchases on the film festival market.

However, streamers buy films all the time, so why does this all matter?

For one, video streamers are likely hungry to have more success than they did at the Oscars last year. While Netflix won two Oscars, it failed to win any of the 10 awards for which “The Irishman” was nominated. Amazon went home empty-handed.

Any of the films these streamers picked up at the fall film festivals winning major awards like an Oscar ups the attractiveness of their film operations and could make recruiting high-profile directors and actors for future projects easier.

Second, and potentially equally important, is what these prestige films can do for the brands of Netflix and Prime Video, even if they don’t win major awards.

If “Malcolm & Marie” and “One Night in Miami” don’t land any major awards nods but still get good critical reception, Netflix and Prime Video are better positioned to battle notions that they chase quantity at the expense of quality.

Some consumers may feel that way toward Netflix and Prime Video simply due to the sheer number of films the two currently count in their catalogs. Amazon had over 13,600 movies in its U.S. catalog as of September 28, versus roughly 3,500 for Netflix, according to data from Reelgood provided exclusively to Variety Intelligence Platform.

Sure, those huge numbers mean Prime Video and Netflix have some of the biggest catalogs of well-reviewed films. But that also means they have some of the biggest catalogs of poorly reviewed films.

Reelgood analysis of IMDb data found that just 28% of Prime Video films had higher than a 6 rating among users and critics as of September 28. For Netflix, this figure was 52%, which was higher than Prime’s score but tying for the second-lowest ranking when compared with other major SVODs.

A few festival films won’t significantly tip the scale in the other direction for Prime Video and Netflix, but they still can give something critically acclaimed for consumers to associate with those SVODs.

And that type of brand boost could lead to more Netflix and Prime Video subs to give their original films a shot, which is something streamers would be thankful for as they ramp up their content spending in 2020.

BMO Capital Markets in January predicted that Netflix in 2020 would spend about $11.1 billion on content, on a P&L basis.

The P&L basis reflects spending on projects that get released during 2020 and is different from the content budgets you’ve probably seen reported on a cash basis, which reflect 2020 spending on projects released in future years.

On a cash basis, BMO predicted Netflix in 2020 would spend about $17.3 billion on content, up from $15.3 billion in 2019.

Something that won’t benefit from this content spending is Telluride, another influential fall film festival that was scheduled to take place Sept. 3-7 but canceled in July due to the pandemic. It still announced a lineup that included “The Bee Gees: How Can You Mend a Broken Heart” and “MLK/FBI” (also included for NYFF/TIFF), which have since been picked up by distributors.