Amazon/Netflix Purchasing at Sundance

At the Sundance Festival of 2016, the top buyers have not been the traditional big market names in the movie-making industry. Rather, the top 2 buyers have been Amazon, and Netflix, purchasing 4 and 3 movies each, respectively only halfway through the 11 day festival. The Sundance Festival is no new market for these two streaming services, however, this time around the two are “driving the deal-making.” And these aren’t purchases of small-time documentaries which have been what Amazon and Netflix are known for purchasing at the Festival; these were purchases of big time movies, some around $10 million each, such as in Amazon’s purchase of “Manchester by the Sea”.

There are multiple reasons behind the two companies’ recent splurge in movie purchases. Not only are they attempting to provide these movies with another option; to go to streaming services rather than attempt the box-offices where, in recent past, they have not done so well. But Amazon and Netflix are attempting to take the rights of these movies away from the other big name brands, and to enlarge their own names and popularity. They are attempting to increase their own networks.

Increasing their networks in two different ways are their current priorities. Increasing it amongst the businesses they are competing against such as Fox Searchlight and other streaming services like themselves, trying to play a more centralized role and adding ties in the network of business. But they are also attempting to increase their network of subscribers. By holding rights to these movies, they can choose to play them exclusively through their streaming system, or to combine that and go box-office as well, such as Netflix did this past year with “Beasts of No Nation”. By doing this, more people then subscribe to their surface in order to be able to view these movies, especially in cases like “Beasts of No Nation” where it proved to be a much larger hit through streaming than it did in the box office. If both Netflix and Amazon continue this trend, increasing the number of exclusive tv shows and movies that their own, they can easily become two of the biggest names in the entertainment world.

If we imagine the movie-rights industry as a network, the nodes can be thought of as the companies that own rights to movies. The more movies a certain company owns, the larger their network is because they are connecting more and more edges to other movie-making companies. In this specific Sundance Festival, Amazon and Netflix each greatly increased their own networks into the movie industry. Increasing the number of edges and other nodes that they are connected to thus increases Amazon and Netflix’s influence and power. If they continue on this trend, then they can each one day potentially become two of the more powerful companies in the movie-making network.

Additionally, you can imagine Netflix and Amazon each have their own individual flow networks in which their nodes are their respective “departments” that they allocate funds towards in order to bring back revenue. These nodes in turn point back towards the “head” or “central” node which is the company itself. By increasing the number of movie rights that Amazon and Netflix hold, each of them in turn increased the number of nodes in their personal networks, thus increasing the potential revenue that will flow back to the head nodes.

http://www.nytimes.com/2016/01/26/business/media/so-far-amazon-and-netflix-are-sundances-top-buyers.html

 

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