Last week, Netflix CEO Reed Hastings announced that he would be [joining Facebook’s board of directors](http://tech.fortune.cnn.com/2011/06/27/reed- hastings-facebook-netflix). The overlap between the two tech companies has some implications that could be good for consumers and filmmakers alike. Hastings has earned a reputation as one of the most forward-thinking executives in business (see: the name “Netflix”). I think if we consider where Netflix wants to be in five years, this alliance could have far-reaching effects for the film industry.
Network, Not Utility
A 2009 study told us what we already knew. As published in Variety:
If marketing mavens want to reach younger moviegoers when promoting their films, they need to embrace social networks or risk being ignored.
In short, young audiences go online to learn about what they should watch. A friend’s recommendation holds far more weight than that of a film critic. The trouble is that most studios believe that social networks are a great marketing outlet. I think Netflix realizes that social networks are the network. They are the place where people go not only to discover new tastes but to experience them. Netflix doesn’t want to play the studios’ game anymore. It wants to forge ahead and start something that’s never been tried before.
The first clue as to where Netflix sees the future is their [acquisition of the David Fincher series House of Cards](http://www.hollywoodreporter.com/news/netflix-outbids-hbo-david- fincher-167882). The company bought the 26 episode first season for $100 million, outbidding HBO. This marks their first foray into original content and perhaps paves the way for them to break free of the television networks and studios that license content to them. Netflix doesn’t want to be a utility like water or power; it wants to be a network. And if they start acting like another network, then there will be more opportunities for filmmakers to create compelling content to reach a wide audience.
1.4 Billion Eyes
Current estimates have Facebook at about 700 million active users worldwide. Everyone uses the site differently, but we know they all use it. In the U.S. there is an [estimated 150 million users](http://www.huffingtonpost.com/2011/06/13/facebook-users-members-us- growth-drops-may-2011_n_875810.html) while Nielsen clocks households with televisions at [around 115 million](http://blog.nielsen.com/nielsenwire/media_entertainment/nielsen- estimates-number-of-u-s-television-homes-to-be-114-7-million/). Perhaps a difference of 35 million doesn’t seem that daunting, but consider this: Facebook is everywhere (at work, on your mobile, on your tablet, on your home PC, etc.) whereas your television is only at your house. The potential is monumental.
Netflix has roughly 23 million users in the U.S. and Canada, a healthy number especially for a pay service that requires users to buy devices in order to take full advantage of it. If one third of their user base tuned in to original content, like the forthcoming House of Cards, it would be one of the most popular shows on cable TV. That may seem unlikely, but don’t forget there was a time when no one thought HBO would be able to garner as big an audience as it has. The accepted wisdom was that people wouldn’t want to subscribe just to watch a single show, but once The Sopranos hit the audience came in droves. Netflix wants to be the next HBO.
Look at how many opportunities have opened up over the last few years as pay and included cable channels have beefed up their schedules. Quality work is getting made on a scale that was once unimaginable in the world of network television. Documentaries are more popular than ever. Low budget sitcoms like It’s Always Sunny in Philadelphia and The League are no longer a pipe dream. Indie films are getting snatched up by emerging channels that need content to fill their airwaves. If Netflix starts acting like a network that barrier to entry could be eradicated even further. We’ve already seen them exhume films that would have otherwise been forgotten, small indie gems (or total crap, sometimes) that wouldn’t be worth financing a DVD re-release can now be streamed to new audiences. The internet has always been a boon to filmmakers in this way, but Netflix and Facebook are where people are. It’s a willing audience that filmmakers should be looking to hook.
Today, our social streams and our video entertainment are, for the most, part, separate. Right now I can plop in front of my couch and flip on my Boxee Box and see what my friends are watching or have watched recently through shared links on Twitter and Facebook. It’s certainly a fun way to discover new content, but it’s not very intuitive. For one, the Boxee Box can only pick up video from certain sites (namely YouTube and Vimeo). Once I watch something a friend shared on Facebook, I can’t actually do much of anything from there. It’s not really “social” at all. The friend may as well have mailed me a list of things to watch, and in turn all I can do is hit a “Like” or “Share” button so someone can watch it again later.
There are many services that try to bring social to the media experience (Miso, GetGlue and Squrl come to mind, as do BD- Live Blu-ray discs) but they all suffer from this same short-coming: the experience itself isn’t social. The reason that no one has become a power player in this space is because it’s extremely difficult. Unlike location sharing apps like FourSquare, sharing the title of what you are watching most likely won’t spark an immediate reaction. It’s generally not relevant information right now.
If Netflix and Facebook were deeply integrated with one another, one could set up group-watching sessions through Facebook and chat alongside the film. This is something that happens now with hashtags on Twitter, but it’s clunky at best. Users start a film at the same time then type inanities like “15:42 OMG this is the best movie ever! #Ghostbusters2Tweet” flooding their feed with the experience. What if you could all watch the movie through Netflix while chatting with timestamps in a dedicated Facebook app? Better, you wouldn’t even need to be watching the film at the same time as one another. If the data could get logged alongside the film’s runtime, you could join in with notes a friend left earlier that day, or last week, or last year. Not only would your friends and contacts be curating the discovery process, they’d be curating the actual experience.
The old indie paradigm is dead. Play at fests, get picked up, do a theatrical tour then on to DVD is a plan from the past. It’s not that it doesn’t still happen, it’s that something better has been happening recently. For one, the growth of regional cinema, i.e. films made for and about a certain place, has helped foster whole communities of filmmakers that weren’t heard before. The other thing that has cropped up recently is the microcinema, small theaters that play niche films to audiences that otherwise wouldn’t have access to them.
Here in New York, a great example is ReRun Theater, a 60 seat screening room that plays films from the festival circuit that, for one reason or another, never landed a distribution deal1 have generally gone unseen by a wide audience. Part of the success of ReRun is that these films now get a write up in most major New York publications, which then opens up the conversation about their quality and relevance to a huge audience. They are now part of the conversation on a large scale, even if only 200 people come to the film in the course of a week.
The mentality of the microcinema, curated content for and by tastemakers, is where I see online video headed. We want to see what people are talking about, but we also want to join the conversation. Films need an audience, and the audiences have all moved online. It seems only natural that filmmakers would too. Someone just needs to offer a compelling community for both makers and audience members. I think Netflix and Facebook are poised to do just that.