Since Saturday, the 1997 mega-hit movie “Titanic,” starring Leonardo DiCaprio and Kate Winslet and depicting the sinking of the RMS Titanic in 1912, has been available on Netflix in the United States and Canada, allowing subscribers to watch one of the highest-grossing films of all-time.
Normally that wouldn’t qualify as headline news, as a large streaming service such as Netflix regularly releases classic flicks.
But when word spread in late June about the apparent sudden availability of “Titanic,” criticism of Netflix, largely on social media, abounded.
Netflix was chided for seemingly trying to “cash in” on the recent Titan submersible tragedy where five individuals – four passengers and the sub’s pilot – died in a “catastrophic implosion” while on a tourist voyage to view the Titanic’s rubble at the bottom of the Atlantic Ocean.
But Netflix doesn’t operate that quickly. As noted by The Hollywood Reporter, Netflix released its film lineup for July before the Titan was reported missing and “licensing deals for films are struck far in advance of the air date.”
Anthony Palomba is an assistant professor at the University of Virginia’s Darden School of Business who studies media, entertainment and the dynamics of the subscription video-on-demand marketplace.
We caught up with Palomba to get a sense of the process Netflix might have gone through to have “Titanic” available on its platform this summer, of all summers.
Q. What is the typical process for how Netflix adds content to its library on a monthly/regular basis?
A. First and foremost, you’re licensing content either to keep people (maintain) or to gain people (acquire). So, what kind of content is going to bring momentum to your platform? What kind of content is going to maintain momentum in your platform? I don’t mean to make things so simplistic – of course there’s far more that goes into the decision-making – but some of it really is: What’s the binge-ability of the series, the watch-ability of the series? How might we scaffold episode releases? Should we do it over days, weeks, or months?
“Titanic” is one of the highest grossing movies of all time. It makes perfect sense to think about licensing a big budget blockbuster like “Titanic.” It had the crown for quite some time as the highest-grossing movie.
And it’s the summer. Netflix isn’t putting movies into movie theaters, but if you’re going to compete against blockbuster movies in movie theaters during the summer, this is a great way to do it, to reaffirm or re-exhibit a movie that is very much popular, that everybody is familiar with and has seen.
Q. How much does seasonality play a role?
A. “Titanic” is just a summer movie and, in this case, it’s tied to the free dive documentary Netflix is coming out with (July 14) – “The Deepest Breath.” They’re strategic here. They’re trying to pair content together.
It absolutely makes sense. When do people want to learn about deep sea diving and scuba diving? Not in January, right? It’s in the summer, when people are traveling to tropical destinations in which they can deep sea dive, snorkel, or go scuba diving. This is why “Shark Week” on Discovery is in late July and not in February, as people are at beaches in July and can relate to this.
So there is a large seasonality dimension here. You only have good weather from May to August, right? This is before school starts again and people are done being on vacation.
I’m 99% certain Netflix wasn’t desperate to cash in on the tragedy. It was just a strange confluence of licensing, a tragic event, and seasonality that met in a serendipitous manner that may have bit them a little bit.
Q. Does Netflix have the authority, in reaction to the news cycle, to pull programming before it’s made available?
A. Absolutely. I mean, if I purchased a license to showcase something, and then I don’t want to showcase that, who cares if I’ve already paid the intellectual property rights owner (such as producers or a studio), right? So, certainly Netflix has the opportunity to not showcase it.
There could be a few reasons why a producer/studio IP rights owner, despite earning a licensing fee, could still be angry with the firm if it did not show “Titanic.”
Depending on the structure of the licensing deal, it could be that the IP rights owner is compensated after its exhibition run on Netflix based on completed views or total time spent with the content. It could be that the final license fee (or the back half of a license fee) was based on these metrics.
There may have been other geographic territories that would have placed higher bids for rights to the movie during this same time, but for whatever reason, were passed over for exhibition in the United States. It could also be that there were other platforms (such as Hulu or Amazon Prime) that were competing for the property for the same time frame.
It could also cause some temporary brand damage to the “Titanic” movie, though this might be a stretch. Unrelated to this premise, it could also upset Netflix subscribers, too, who may have looked forward to viewing the movie. Of course, it’s in Netflix’s best interest to show the movie, as it likely paid a large license fee for it.
Q. How far out in advance, do you think Netflix set July 2023 as the time to offer the movie?
A. Having worked in an entertainment law firm that specialized in theater and Broadway deals, I know this stuff isn’t done overnight.
For third-party licensing deals, I think they likely plan a year out, six months out or three months out. My suspicion is it’s one of those, as you want to secure licenses to content that are in line with consumer preferences and tastes, but you don’t want to overschedule releases and exhibitions to the point where you can’t pivot if some topic becomes hot. For original series, it’s usually at least several years out.
Anyhow, maybe they were thinking about this a year ago, maybe they were thinking this six months ago. Three months seemed a little bit soon, but then again, they might have realized that there was an opportunity to gain the rights to “Titanic” in this particular seasonal window, as it may have no longer been available on another streaming service.
It was on Amazon before it came on to Netflix. So that’s kind of the other thing – what’s the window in which you can rent something? You can’t just pick a movie or other content to license whenever you want as you’re competing against other streamers, FAST (free ad-supported television) channels, cable channels and television networks for the rights to license and exhibit third-party content.
Q. “Titanic” came out more than 25 years ago. Why, of all summers, was this the summer to make it available to a long-running streaming platform like Netflix?
A. I think it goes back to “The Deepest Breath.” If Netflix is releasing this documentary and they’re worried about how many people will view it and they want to make sure they’re getting good utility out of it, pairing it with “Titanic” is a way to reduce the risk and further capitalize on interest surrounding viewing “Titanic.”
Maybe they’re banking on people seeing “Titanic” and developing this curiosity about the ocean and deep diving. They think that can channel people from the “Titanic,” which is a big get, to “The Deepest Breath,” which is a documentary that they’ve secured sole distribution rights to and want to be sure it is viewed by many subscribers.
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May 4, 2024
