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Netflix Bows To Saudis, Takes On Movie Industry

MBS

Perhaps it speaks to the growing power of Netflix that Saudi Arabia feels the streaming giant is a big enough threat that Riyadh is compelled to turn the screws to get something removed from the ether.

Both things are certainly true. Netflix is becoming more powerful than Hollywood, and the Saudis have complained.

The Financial Times reported on 1 January that the Netflix actually withdrew an episode of Patriot Act because the Saudi government complained that the comedy show criticized Saudi Crown Prince Mohammed bin Salman (MbS) and Riyadh’s reaction to the murder of Saudi journalist Jamal Khashoggi.

It was only the second episode of the comedy series, too.

But at a time when MbS is seeing his reputation take a beating and weaken his position within the royal family, Riyadh claims that this particular episode of Patriot Act violated Saudi cybercrime laws, which make it a criminal act to criticize the government via any digital medium.

And since Netflix has a service in Saudi Arabia, the law applies, though the streaming giant cannot be made to withdraw the episode in any other country (yet). Nor have the Saudis yet moved to ban viewing of the episode from YouTube in the country.

So, Netflix is growing boundlessly in dangerous times.

And growing, it is, indeed. Related: Tesla To Build Its First Battery Gigafactory In China

Just ask the traditional movie industry about the massive disruption. Or ask cable companies who are struggling with growing numbers of ‘cord-cutters’.

But while the theater business had a stellar year, it’s not as easy to disrupt the box office as it is to disrupt cable. Nonetheless, Netflix is planning to, and if the massive numbers of viewers of Bird Box, starring Sandra Bullock, is any indication … it just may succeed.

The streaming giant says that Bird Box grabbed over 45 million watchers in only seven days, and it was a Netflix original. Not only that, but it didn’t spend hardly anything on promotion to get those viewing numbers. It doesn’t need to because it has a massive distribution platform that promotes everything automatically to 130 million people around the world.  

Some analysts might shrug off these numbers as shaky, but even if they aren’t exact, Hollywood should be concerned and that seems undeniable at this point. The streaming giant has taken over television and now it’s gunning for the movie industry. End of story.

That said, this year we may start to see exactly how Netflix plans to deal with theaters themselves, now that it’s set its sights very clearly on the movie industry. So instead of trying to render them obsolete, the most likely move will be to bring them on board to show original Netflix films. In other words, not to compete directly, but to win over.

Indeed, just a month before the Bird Box sensation, Netflix had told investors of plans to give exclusive rights to theaters to show original Netflix films before they were made available for streaming.

The theaters will be the last challenge for Netflix as it tries to take on Hollywood—and this is the defining moment for both.

Hollywood superstars are already climbing on board, and while no one wants to entirely give up the big screen for the small screen, it’s a relationship between traditional theater and streaming that is rather uncomfortable at the moment.

Which brings us back to that Saudi discomfort: Hollywood doesn’t represent nearly the same threat level as millions of small screens that can reach into everyone’s homes.  

By Michael Kern for Safehaven.com

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