Netflix: From movies in the mail to movies on demand?
Netflix is going to extraordinary lengths to become one of Hollywood's top powers. It even infiltrated Alcatraz.
ALCATRAZ ISLAND, CALIF.
Birds circle and scream overhead as winds howl through the wreckage of burned-out buildings. Waves crash against the rocky shores in the gathering dark, while dock hands work to berth our wildly bucking boat. No doubt about it, Alcatraz Island, or "The Rock," is long on the kind of atmospherics moviemakers love. Ever since it stopped being a prison (and before that, a fort), Hollywood has been making the trek across the San Francisco Bay to cash in on all these natural special effects.
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Tonight, it's Netflix's turn. This is the online DVD-rental company that is spooking all of Hollywood with its unexpected success in getting consumers (5 million and counting) to change their movie-watching ways. The company has brought a group of 125 lucky film buffs to tour the island and then watch Clint Eastwood's "Escape from Alcatraz."
The total audience for tonight is small (and cold). But as all of Hollywood warms up for what everyone agrees is the next big thing – digital delivery of home entertainment – ironically, the little Los Gatos Internet upstart that relies on the first-class postage stamp to deliver its discs has become the player to beat. It now finances films. It scours independent festivals to procure movies that the studios miss. It's even begun exploring video on demand.
"We want to find unique ways to bring film to the people," says Leslie Kilgore, chief marketing officer for Netflix, explaining how tonight's festivities fit in with the overall Netflix vision. This event, held in the damp chill of the former inmates' chapel, is the final stop in the summer-long "Rolling Road Show." The company has also screened classics such as "Jaws" and "Field of Dreams" where they were made (Martha's Vineyard, Mass., and an Iowa cornfield, respectively).
"The company is a game-changer," says branding expert Morris Reid. Getting people to alter their behavior is the holy grail of modern business, he says, and when a company succeeds, everyone pays attention. "They've changed the model, not just by making [renting movies] more convenient, but it shifted the ground around them so that now everyone else has to react to what they're doing."
No late fees, (mostly) overnight delivery, and, most important, a deep catalog of more than 65,000 titles linked to a sophisticated, proprietary searching software that allows customers to find obscure films and introduces them to new ones, have been the keys to the company's success. In the past two years, Netflix executives have begun to find new ways to expand their reach. They have inked distribution deals for small, independent films such as "Embedded Live," "The Girl from Monday," and "Assisted Living." In July, they signed a deal with NBC to distribute new TV shows, including Aaron Sorkin's "Studio 60 on the Sunset Strip," even before some have aired.
