Netflix is an internet entertainment service that offers movies and television series to subscribed members. It was founded in 1997 and has now around 150 million subscribers worldwide. Since the early 2010s, Netflix also took an increasingly important role as producer and distributer of films and TV series. The rise of this player bypassing traditional channels of distribution of audiovisual contents has generated several controversies.
Attacking theatrical release windows
For decades, the movie industry has relied on a system of release windows; movies were first released in movie theatres, for around 17 weeks, before being available for sales in VHS or DVD. As Netflix became progressively a major film producer and distributor, it has been at the forefront in attacking this system. Netflix movies have had limited theatrical releases in order to prioritize the subscribers of the platform. But this move has been met with some resistance in the movie industry. As a matter of fact, the organisation running the Academy Awards considered rendering films with less than 4 weeks of theatrical release ineligible to be nominated for Oscars. That said, in the 2019 91st Academy Awards, the film “Roma”, distributed by Netflix after only three weeks of exclusive theatrical release, received three Oscars. Netflix stated that its aim is to make movies accessible to those who cannot afford to go to a movie theatre or do not have one in their own town.
Avoiding corporate taxes
A second controversy has risen from the fact that in many of the countries where Netflix is operating, it manages to get away without paying corporate taxes. Despite generating hundreds of millions in revenue in various European countries – for example, 500 million Pounds in the UK and 315 million Euros in France were reported for 2017 – it declares only very little profit, and pays from little to no tax in these countries. Users who subscribe to the service have a contract with a branch of the firm based in the Netherlands. Through this system, the firm manages to avoid paying most of its corporate taxes. Such practices are widespread among large Internet firms. To respond to critics, Netflix stresses that in the countries where it generates revenue it invests in local movie production companies, bringing benefit to the local audio-visual productions.
Attacking theatrical release windows
For decades, the movie industry has relied on a system of release windows; movies were first released in movie theatres, for around 17 weeks, before being available for sales in VHS or DVD. As Netflix became progressively a major film producer and distributor, it has been at the forefront in attacking this system. Netflix movies have had limited theatrical releases in order to prioritize the subscribers of the platform. But this move has been met with some resistance in the movie industry. As a matter of fact, the organisation running the Academy Awards considered rendering films with less than 4 weeks of theatrical release ineligible to be nominated for Oscars. That said, in the 2019 91st Academy Awards, the film “Roma”, distributed by Netflix after only three weeks of exclusive theatrical release, received three Oscars. Netflix stated that its aim is to make movies accessible to those who cannot afford to go to a movie theatre or do not have one in their own town.
Avoiding corporate taxes
A second controversy has risen from the fact that in many of the countries where Netflix is operating, it manages to get away without paying corporate taxes. Despite generating hundreds of millions in revenue in various European countries – for example, 500 million Pounds in the UK and 315 million Euros in France were reported for 2017 – it declares only very little profit, and pays from little to no tax in these countries. Users who subscribe to the service have a contract with a branch of the firm based in the Netherlands. Through this system, the firm manages to avoid paying most of its corporate taxes. Such practices are widespread among large Internet firms. To respond to critics, Netflix stresses that in the countries where it generates revenue it invests in local movie production companies, bringing benefit to the local audio-visual productions.
- futurelearn.com, European University Institute (EUI)
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