Does a lot of people seeing something make it a hit? Cable channels, for example, played the 1999 minor box office hit She's All That more than any other film except Mrs. Doubtfire in 2014, so an awful lot of people saw it. The same is true for countless comedies that air repeatedly on channels including TBS and FX -- most of us have seen them, but does that make these movies hits?
That's a question worth asking Netflix (NASDAQ:NFLX), which touted on social media that its film Bird Box had been watched by 45,037,125 customers in its initial week of release. That's the best first seven days for any film, according to the company, making it a success for the streaming leader, but is it a hit?
Yes, the company's subscribers watched the movie, but that's not the same as buying a ticket. Bird Box is a hit when it comes to viewership, but those views are not the same as tickets sold.
It's about the Netflix business model
Bird Box has a 65% rating from critics and a 68% from audience on Rotten Tomatoes. A Quiet Place, the film it's most often compared to, had a 95% from critics and 83% audience approval, which powered it to $340 million in global box office.
It's fair to say that the lower level of critic and audience approval suggests that Bird Box would not have been as successful even with Sandra Bullock as its star. Netflix, however, does not require members to pay more to see the film. It's part of the service, and that makes it much easier for subscribers to decide to watch it.
That makes the film a hit in the way that a chocolate fountain is a hit on a dessert buffet. Yes, everyone tries it, but would anyone pay for it on its own?
In reality, that's enough for Netflix. Bird Box has engaged its subscribers base and generated some buzz -- which may lead to new subscribers. The film only has to be good enough for the people who watched it to think it was worth their time -- not to be worth the $9 or $10 a ticket would cost at many movie theaters.
Netflix needs enough new content each month for subscribers to think that a subscription remains worth its costs. That's why it can invest in low-quality/high-appeal movies, such as its slate of Adam Sandler films. These aren't movies most people would pay for, but they are appealing enough for fans of the comedian to watch when they're part of the package.
A new kind of hit
In many ways, Netflix has become a safe place for stars. Since very few (if any) names can guarantee that a film has a strong opening -- let alone that it goes on to box office success -- paying big money for Bullock, Julia Roberts, Bradley Cooper, or any star for a traditional film is a risk (unless that movie comes from a major franchise).
For Netflix, though, the goal is about getting attention. That's why films like Bird Box or Will Smith's Bright have become a key part of the company's strategy. Movie stars bring attention, and that's enough to let Netflix subscribers and potential subscribers know the film exists.
Just the presence of the stars makes people watch it because there's no direct cost associated with watching. Under that model, "not bad" is good enough, and really anything short of "that was awful and a waste of time" adds value to Netflix, thus further tightening its ties with subscribers.
Check out the latest Netflix earnings call transcript.