Why Streamers Prefer a Hit TV Series to a Hit Movie

Netflix this week announced a new star-studded slate of feature filns for 2021, including at least 70 titles as part of its plan to draw in subscribers with at least one movie every week. While this bold move suggests a strategic decision to lure and keep subscribers, some entertainment industry watchers suggest that a hit TV series — more so than a movie — may bring a streaming service more bang for its buck. “It’s the amount of time that eyeballs are on a movie vs. a television series,” said Vanessa Roman, an entertainment partner at Akin Gump Strauss Hauer & Feld. “In the streamers’ eyes, all that matters is (what) turns into eyeballs.” David Offenberg, an associate professor of finance at Loyola Marymount University with an expertise in entertainment, said that a series allows a producer to amortize the cost of sets, costumes and props over multiple hours of screen time. The same goes for hiring the bankers, lawyers and deal-makers. Spreading out the costs over a number of episodes rather than just building it into one film makes sense. “Streamers hate movies,” he said. “The reason that series have so much value to a streamer is that they make it easier to do all three things they need to do to be successful: They need to make the shows; they need to have consumers find the shows; and they need to make the consumers watch the shows. In other words, production, marketing and distribution.” While other streaming industry watchers might call “hate” too strong a word for how streamers may feel about movies, most agree that certain economic advantages may make a hit series a better long-game bet for a streaming service than trying to make a splash by producing a big-budget movie. They say the comparative value of an investment in popular original series — such as Netflix’s  “The Tiger King,” “The Queen’s Gambit” or “Bridgerton,” or Amazon’s Emmy-winning “The Marvelous Mrs. Maisel” — versus producing or acquiring a new movie may be more likely to cultivate loyal subscribers than a film that is watched just once. The biggest movie news of 2020 came in December, when Warner Bros. said it would release its entire 2021 motion picture slate on WarnerMedia-owned HBO Max on the same day they hit theaters. Leveraging new subscribers with concurrent streaming/theatrical release of “Wonder Woman 1984”  or the upcoming “Dune” on  HBO Max,  or Pixar’s streaming-only premiere of “Soul” on Disney+ , creates a different financial model than a movie created by a streaming service for exhibition on their platform. Still, Roman said, even in the case of a planned theatrical release pivoting to streaming during a pandemic, the long-term value of a feature film may be dwarfed by the loyalty a series can build in a subscriber. “We all watched ‘Bridgerton,’ and we’re all waiting for Season 2,” she said. And binging a 10-episode season over multiple hours offers “an incentive to stay on a streaming platform and your subscription in a way that even something like ‘Dune’ isn’t going to be able to do,” she added. Offenberg pointed to numbers from Antenna Data that show the comparative spikes in subscriptions driven by Disney+’s “Hamilton,” and “Soul,” as well as “WW84” on HBO Max. (See chart in Antenna’s tweet below).  “There can be some incredible value in having really big-name movies on your platform,” Offenberg said. “At the same time, you can only watch ‘Wonder Woman’ for two hours.”

The Biggest Films of the Year Were Direct-to-SVOD: WW84 drove more Sign-ups in its opening weekend than any other release  –  Hamilton generated 71% as many; and Soul, 35%

Note: this analysis includes only net new HBO Max Sign-ups and not Activations pic.twitter.com/cHqUbeDOLd

— Antenna (@AntennaData) January 4, 2021

John Mass, an executive vice president with Content Partners, an investment fund and asset management company that acquires intellectual property in media and entertainment, took a more balanced view of the comparative value of movies and series to a streamer, saying each must be looked at on a case-by-case basis. Mass cited Netflix’ 2020 movie “Extraction,” an action thriller starring Chris Hemsworth and set in Bangladesh. Although the streamer rarely makes its ratings public, Netflix announced that a projected 90 million households tuned in to watch the $65 million-budgeted film in its first four weeks on the platform, making “Extraction”  Netflix’ biggest performing movie to date. “Imagine if that were a (theatrical release) and you had 90 million admissions — that’s a billion-dollar box office movie,” he said. “With the exception of Hemsworth, they put in a big star, they didn’t have to spend a lot of money.” He added that the cachet of making movies attracts big talent to a streaming service. “Look at Kevin Hart: He made a deal with Netflix, and it’s not about comedy specials. He’s making feature films,” Mass said. “They still want to be in the feature film business.”

Mass acknowledged that the astonishing viewership for “Extraction” represents a rare case.  In general,  he said,  when considering the number of dollars spent to create an hour of content, the series is often a better deal for the producer. But not all TV watchers are hooked by a series, he added. “Some people just do not want to watch (multiple episodes),” he said. “Maybe they just want a quick fix.” Meanwhile, some television critics say the business value of multiple episodes to a streamer can sometimes lead to bad creative choices, including what one called “vamping” to stretch out a story into a standard number of episodes. Emily VanDerWerff, critic-at-large for Vox.com, applauded Craig Mazin, director of HBO’s Emmy-winning 2019 limited series “Chernobyl,” for deciding to limit his series to five episodes. “I hate to be prescriptive about this, but I believe stories have a natural length,” VanDerWerff told TheWrap. “I just watched the FX miniseries “A Teacher.” It was 10 half-hour episodes, and it was just right for that,” she said. “But as much as I loved (Netflix’ seven-episode) ‘The Queen’s Gambit, ‘I can’t say it wouldn’t be better an hour shorter. There’s a lot of space there.” Added VanDerWerff, “I think that most stories, especially if you are adapting a novel, fall into the range where three to four hours is best.  That’s a very short miniseries or a very long movie — not a great economic proposition, especially for these streamers.”