NFLX Netflix Inc

By R.T. Watson 

Netflix Inc.'s expensive mob drama "The Irishman" attracted 13.2 million viewers in the U.S. during its first five days of availability, according to TV-ratings firm Nielsen, well short of the streaming service's best-performing movie title, "Bird Box," which cost far less to make.

"The Irishman," a critically acclaimed film by a top-flight director, may add to Netflix's prestige. But its relatively weak viewership raises the question of whether it makes sense for the streaming giant to spend lavishly on properties that most subscribers will view only once if at all, as opposed to series that inspire binge watching and repeated visits to the service.

The nearly four-hour crime epic directed by Martin Scrosese and starring Robert De Niro and Al Pacino cost Netflix at least $173 million, according to people familiar with the matter. By contrast, Netflix's post-apocalyptic thriller "Bird Box" cost about $30 million to produce, according to people familiar with the matter. The movie, starring Sandra Bullock, drew 16.9 million viewers during its first five days late last year, according to Nielsen.

Netflix hasn't provided viewership data for "The Irishman," which was released last month, and didn't comment on Nielsen's data. The company has previously said that globally "Bird Box" had 45.3 million accounts watch at least 70% of the movie during its first full week of release. "Bird Box" is the service's most-watched original movie.

Nielsen is unable to furnish a complete picture of Netflix viewership, as the firm tracks television sets in the U.S., not the use of other devices including computers, tablets or smartphones. Nielsen estimates that about 80% of U.S. Netflix viewing takes place on televisions.

Netflix has more than 60 million domestic subscribers.

Before "The Irishman" could be viewed at home by Netflix subscribers, the film played for about three weeks at hundreds of theaters around the country, the widest release yet for any of the streaming giant's titles. Such theatrical releases aren't a core part of the company's business model, which is based on attracting and retaining subscribers, most paying $13 a month for the service. The company distributes some movies to theaters, primarily to qualify for the Oscars and other awards and stoke interest among potential subscribers.

Unlike traditional studios, Netflix doesn't disclose box-office revenue for the movies it distributes in theaters. The country's largest chains, such as AMC Entertainment Holdings Inc., don't typically show Netflix films because they are available online too soon after appearing on big screens. Big theater operators believe a "window" of several months between a movie's theatrical opening and its home-viewing availability is essential to motivating audiences to leave the house.

"The Irishman" opened in a handful of theaters in Los Angeles and New York on Nov. 1, adding more cities and theaters in the following weeks. Then, just in time for the Thanksgiving holiday, Netflix released the film online even as it continued to play in hundreds of theaters throughout the U.S. and Canada.

For Netflix in 2019, "The Irishman" serves as a centerpiece offering in a high-profile slate of original movies that includes the critically acclaimed "Marriage Story" and a big-budget action flick starring Ryan Reynolds called "6 Underground."

Amid competition from new or planned streaming services created by Walt Disney Co., Apple Inc. and AT&T Inc., Netflix has been adding new original movies and series to its library in an effort to offset the loss of its most popular content.

Studios like Disney, AT&T's WarnerMedia and Comcast Corp.'s NBCUniversal have for years licensed to Netflix popular movies and television shows, which have frequently ranked among the most-watched programming on the service. Now those same studios are seeking to challenge Netflix on its own turf, and they are winding down their lucrative licensing deals so they can offer shows like "Friends," "The Office" and "Grey's Anatomy" on their own platforms.

As of October, non-original programming, licensed from other studios, accounted for 72% of the minutes people spent watching Netflix, according to Nielsen data.

Netflix is aiming to keep its more than 158 million subscribers satisfied by adding binge-worthy original series and releasing a steady stream of top-shelf films starring some of Hollywood's biggest stars. Analysts expect the company to invest $15 billion on programming this year.

With "The Irishman," Mr. Scorsese originally planned to work with Paramount Pictures, the traditional Hollywood studio owned by Viacom Inc. But as the budget soared as Paramount balked, Mr. Scorsese and the movie's financial backers began exploring other avenues, according to people familiar with the matter.

Netflix came to the rescue, agreeing to finance the director's extravagant return to the world of mobsters -- which he previously explored in such films as "Goodfellas" and "Casino" -- for at least two reasons, according to a person familiar with the matter. The company was not only eager to work with a director of Mr. Scorsese's professional stature, it was also keen to have a film likely to score with older viewers, this person said.

"The film skewed older and more male," according to Nielsen's report. "On its premiere day, 20% of the viewing audience was comprised of men ages 50 to 64."

Netflix disputes that it made "The Irishman" to attract an older audience, saying the company doesn't track demographic information on its subscribers.

But the decision to produce "The Irishman" is already adding to Netflix's cachet, which could help as the service aims to woo major filmmakers. Unlike "Bird Box," which received a tepid critical response, Mr. Scorsese's new movie has received excellent reviews, with the New York Film Critics Circle naming it the best film of the year.

An expensive R-rated drama from any studio likely would have struggled to turn a significant profit in theaters, according to recent box-office trends that show major franchise films based on comic books and other sources dominating the market. The two best-performing R-rated dramas so far this year cost considerably less to produce than "The Irishman."

"Joker," Warner Bros.'s Batman-villain spinoff and serious character study, has grossed a solid $331 million in the U.S. and Canada, while Sony Corp.'s "Once Upon a Time ... in Hollywood" has made $141 million so far. The two films cost about $60 million and $100 million respectively.

(END) Dow Jones Newswires

December 06, 2019 16:12 ET (21:12 GMT)

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