Oscar wasn’t kind to streaming services last night.
Amazon was shut out while Netflix, which came into the night with an industry-leading 24 nominations, scored only two wins, a best supporting actress award for Laura Dern in “Marriage Story,” and a best documentary feature nod for “American Factory.”
“The Irishman” got whacked, despite 10 nominations, a cast featuring the Mount Rushmore of American movie mobsters and Martin Scorsese in the director’s chair.
Even the best picture statue going to Bong Joon Ho’s “Parasite” could be read in part as a subtle dig at Netflix as the Korean-language thriller is not currently available to stream in the U.S. (it is available to buy or rent online from Amazon, Vudu, iTunes and Google Play).
It seems the more ambitious Netflix gets the more Oscar plays hard-to-get. Last year’s best picture award went to the rather anodyne “Green Book” over Netflix’s critically hailed “Roma.”
Yet, while Oscar may still look down his nose at movies made for streaming, behind the scenes it’s a different story.
Just days before the Big Night, WarnerMedia announced the creation of a new feature film production unit to be called Warner Max that will produce films for its new streaming service, HBO Max.
The new unit is a joint venture between HBO Max and Warner Bros. Pictures and is targeting 8-10 mid-budget films per year that will debut on the streaming service.
“From the get-go we have been strategizing …about HBO Max original films,” HBO Max chief content officer Kevin Reilly said in the statement. “We are going to deliver a collaborative and lean process for talent, make a range of quality films, and provide a platform for each of them to have cultural impact.”
Just days before WarnerMedia’s announcement, Disney chairman Bob Iger told investors the studio is putting the brakes on plans for any more “Star Wars” theatrical films, at least for now. Instead, Disney will continue to develop the franchise via the Disney + streaming platform, following in the footsteps of its hit series “The Mandalorian.”
Franchise extensions have been a mainstay of the major studios’ business model for at least the past decade, particularly so for Disney, and franchise film releases have carried the box office for much of that time.
Though Iger’s comments did not go beyond the “Star Wars” franchise, any shift in the major studios’ overall strategy from relying on $200 million theatrical releases every two years to sustain a franchise to developing spinoffs on streaming platforms could be at least as disruptive to the big screen exhibition business as the challenge posed by Netflix and Amazon has been.
Whether from a creative, commercial or cultural perspective distinctions among films based on where and how they are first released will only grow more meaningless as the industry evolves. And Oscar’s insistence on maintaining those distinctions looks increasingly like Luddism.
Pods and Ends
Spotify closed 2019 with 124 million paying subscribers, up an impressive 29% from year-end 2018. But the growth wasn’t enough to stop the flood of red ink the music streaming service has been awash in from its earliest days.
The company posted a loss of $208.3 million for the year despite $7.58 billion in revenue.
The main earnings challenge facing Spotify is that its licensing deals with the music labels are based on a percentage of its overall revenue, meaning that as its revenue goes up, so too do its licensing costs — not a good formula for earnings growth.
In the past few years Spotify has tried to improve its negotiating position with the labels by investing heavily in podcasts to drive up the share of total listening hours on the service that is not attributable to music.
According to a report in the Financial Times last week, however, the labels are hip to the game and are now pushing back.
Spotify said podcast streaming hours grew 200% in the fourth quarter and that it sees “clear indications that podcast usage is driving increased overall engagement and retention.”
But that may not be cutting much slack with the labels.
With license renewal discussions under way with two of the big three label groups, the time Spotify users spend listening to podcasts instead of music has reportedly emerged as a sticking point in the negotiations. According to the FT report, the labels are determined “to defend their minimum claim on Spotify’s revenues, regardless of how much listening on the app drifts away from their music.”
While it might be cold comfort to Daniel Ek the labels’ demands represent a back-handed acknowledgement of how important Spotify has become to their business.
Short Cuts
Bong hits
Congratulations to Bong Joon Ho for landing the first best picture and best director Oscars ever awarded to a foreign language film for “Parasite.” The Korean-language thriller actually double-dipped on best picture honors, winning best foreign language film as well as the top prize. The thriller also took the statue for best original screenplay.
Melted vinyl
The worldwide comeback of vinyl records may have hit a major snag last week when Apollo Masters’ manufacturing plant in California, which supplies much of the lacquer used worldwide to make the master discs used in pressing vinyl records, was destroyed in a fire, taking much of the lacquer supply with it. Toronto-based Duplication Records called it a “Disaster for the vinyl pressing industry,” that will cause a lacquer shortage and “possibly plants having to close or scale back operations.”
What’s in a name?
Walking down a street in Marina Del Rey last week I overheard a passing cyclist talking on the phone. “I’ll be there in a quibi,” he said, echoing the tag line the new Jeffrey Katzenberg-backed short-form streaming platform tried to get trending with its Super Bowl ad. Alas, the person on the other end of the line clearly had no idea what he was talking about, as the cyclist had to explain the reference. Meanwhile, Quibi took to the Oscars last night in its continuing quest to explain what the hell it is.