Netflix Gets Back Into the Movie Business: Big Deal, Little Deal or No Deal? (Updated)

Netflix Gets Back Into the Movie Business: Big Deal, Little Deal or No Deal? (Updated)

Netflix will pursue documentaries more aggressively in bid for more original content

Netflix is back in the movie business after picking up exclusive distribution rights to “The Square,” Jehane Noujaim’s award-winning documentary about recent political tumult in Egypt.

The movie is playing in theaters this week so it can qualify for the 2014 Oscars, and it will return to theaters Jan. 17 for a limited theatrical run in major cities across the country. Participant Media will launch one of its social action campaigns to drum up support concurrent to its release.

The same day “The Square” returns to theaters, the movie will be available to Netflix subscribers as part of a deal that spans several years. That deal gives Netflix exclusive rights in the subscription video-on-demand (or SVOD) window.

Netflix will announce several more initiatives in the coming weeks as part of a new original documentary initiative, and the company announced Tuesday morning it had picked up the rights to “The Short Game.”

The initiative evokes memories of Red Envelope, a now-shuttered arm of Netflix that produced and acquired movies for the company's DVD-by-mail business.

This latest deal is more significant given Netflix’s recent success with original series. The company boasts more than 40 million subscribers across the globe, and its original series have demonstrated its commitment to high-quality entertainment.

See video: Why Netflix Is Greedy – and Right – About the Movie Business (Video)

The “promotional muscle” it exhibited with those series is part of what made Netflix so attractive to Cinetic Media, which sold the documentary rights, according to Cinetic chief John Sloss.

“There is tremendous possibility in getting this film and its message out,” Sloss told TheWrap Monday morning. “We got a very healthy deal, but as much as anything what we got was a group of people with a history where they've taken originals and put them in the conversation.”

The movie could be an Oscar contender and is one of five documentaries in competition for best feature at the 2013 International Documentary Association's Awards. Any additional promotion will help a movie with limited financial resources. Noujaim financed its awards qualifying run.

Netflix has already scored awards gold with “House of Cards,” and Participant Media, a financing and production company, has a strong track record of winning awards.

Also read: Netflix Acquires Egyptian Protest Documentary ‘The Square’ (Video)

So is Netflix suddenly a rival to independent film distributors? Or is this a small deal that will be forgotten?

The answer is somewhere in between.

During the company's recent earnings call Chief Content Officer Ted Sarandos said that it would acquire documentaries and stand-up specials to complement those original series. More deals are expected in coming weeks.

Though Netflix hosted documentaries such as “Invisible War” and “How to Survive a Plague” before the Oscars last year, it didn’t have them exclusively.

“It's the start of a doc refresh where were trying to get documentaries that are available on our service and nowhere else,” a Netflix spokesman told TheWrap. “These documentaries have a few essential attributes — high-quality storytelling with universal resonance from well-known documentarians.”

“They are ambitious and aggressive and they know what they like,” Sloss said. “That is always a positive.”

Also read: ‘Square’ Filmmaker Jehane Noujaim on Egypt: ‘It's a Very Dark Time’

A new buyer is very good news for documentary filmmakers, but this deal does not represent a paradigm shift in the way movies are distributed. Sarandos recently implored studios to release movies on Netflix the same time as they are in theaters. This deal does not do that.

And in any event, Sarandos walked those comments back Monday, saying he just wanted windows between theatrical and home entertainment release to shrink.

Netflix isn’t convincing Disney to put “Thor 2” on Netflix the same day it appears in theaters. It won’t be going to film festivals to get in bidding wars for narrative films.

But it will vie for certain types of movies, taking another page out of HBO's playbook.

In addition to the original series that make HBO indispensable to its subscribers, HBO also releases its own movies. Some are developed and produced internally, such as “Game Change,” Jay Roach’s adaptation of the best-selling book about the 2008 election. Others are acquired, like “The Crash Reel,” Lucy Walker’s gripping tale about snowboarder Kevin Pearce.

Also read: Why Director Lucy Walker Couldn't Say No to a Movie About Injured Snowboarder Kevin Pearce

“The Crash Reel” debuted at Sundance, which is also where the world first became familiar with “The Square.”

There are two differences between HBO and Netflix. Netflix is acquiring, not commissioning — at least for now. And Netflix is doing it faster.