Adam Sandler's Netflix deal hits the movie industry while it's down

Netflix has signed a deal with comedian Adam Sandler's production company to produce four upcoming films that will bypass movie theaters and premiere exclusively on the streaming service's website. If others follow the lead of Adam Sandler and Netflix, it could mean huge changes for the slumping movie industry. 

Fred Thornhill/Reuters/File
Adam Sandler attends a news conference to promote the film 'Men, Women & Children' at TIFF the Toronto International Film Festival in Toronto last month. Netflix Inc said October 2, 2014 that Sandler has signed a deal to star in and produce four films that will be shown exclusively on the video-streaming service.

Netflix has already established itself as a force in television programming, with shows like “House of Cards,” and “Orange is the New Black,” garnering millions of viewers and critical acclaim. Now, the streaming entertainment provider is trying its hand at films, and it's added its first big Hollywood name to the roster. 

Netflix has signed a deal with Adam Sandler to premiere four new movies from the comedian’s production company, Happy Madison, exclusively on its streaming site. Mr. Sandler has produced and starred in scores of blockbuster comedies over the past two decades, including “Billy Madison,” “Happy Gilmore,” “The Waterboy,” “Grownups,” and many others.

“People love Adams’s films on Netflix and often watch them again,” Netflix chief content officer Ted Sarandos said in a statement on the company’s website. “His appeal spans across viewers of all ages – everybody has a favorite movie, everyone has a favorite line – not just in the US but all over the world.”

According to the company, Sandler’s films are consistently among the site’s most-viewed, both in the US and in overseas markets like Brazil and the UK.  Under the terms of the deal, Netflix will finance and work with Happy Madison to produce the new films, which will skip movie theaters altogether and stream right into Netflix subscribers’ living rooms.

Movie theaters can’t be too thrilled about that last part, considering that Adam Sandler films have grossed a combined $3 billion globally. The film industry is coming off its worst summer in North America since 1997, making an estimated 3.9 billion in box office receipts in the US and Canada (a 15 percent drop from summer 2013, according to box office data company Rentrax). Getting audiences to theaters when up against cheaper, more immediate entertainment options like streaming TV has proven to be a bigger and bigger challenge for the industry. 

Even Sandler wasn’t immune to the swoon – his latest releases, the romantic comedy “Blended” starring Drew Barrymore, garnered withering reviews and just barely earned back its $40 million budget domestically.

Netflix, meanwhile, has its sights set beyond Sandler fans. The Happy Madison deal was the company’s second of the week; next year, it will release the sequel to “Crouching Tiger, Hidden Dragon,” simultaneously with certain IMax theaters.

Such deals are part of Netflix’s prodigious long-term investment in original content. The company has said that it plans to spend 43 billion on TV shows and films within the next year, and its foray into television has already been successful. “House of Cards,” a Washington drama starring Kevin Spacey, and “Orange is the New Black,” a comedy set in a women’s prison, have been bona fide hits and critical darlings. Netflix content was nominated for 31 Emmys this year, taking home seven. Such success has vaulted Netflix in the same league as traditional TV networks in terms of providing entertainment, leaving rival streaming subscription services like Hulu and Amazon scrambling to produce their own hit shows.

It’s helped financially as well. Netflix nearly doubled its earnings in the second quarter of 2012 as it added an extra 1.7 million subscribers worldwide. Sandler is a star overseas (“Blended” fared much better globally than in the US), so he’s a sensible partner for Netflix, which is expanding aggressively into several new overseas markets.

Of course, Sandler films, while profitable,  have also been widely reviled by critics for most of his career, so the deal may not turn Netflix into an awards season staple as immediately in the film world as “House of Cards” did in the TV world. But if the company's data is right, it will give its original new movies eyeballs, and that’s a good place to start.

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