What Netflix’s Official MPAA Membership Means – Update
UPDATED with Netflix officially joining: It’s official, Netflix is a member of the MPAA. The Washington, DC-based organization just dropped the following release:
The Motion Picture Association of America (MPAA) has added Netflix as a new member of the global trade association that advocates on behalf of the film and television industry.
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“On behalf of the MPAA and its member companies, I am delighted to welcome Netflix as a partner,” said MPAA Chairman and CEO Charles Rivkin. “All of our members are committed to pushing the film and television industry forward, in both how we tell stories and how we reach audiences. Adding Netflix will allow us to even more effectively advocate for the global community of creative storytellers, and I look forward to seeing what we can all achieve together.”
Netflix joins other leading producers of film and television content that make up the MPAA, including Disney, Paramount, Sony, Fox, Universal, and Warner Bros. The MPAA advances the business and art of storytelling, protects our members’ content across all screens, defends the creative and artistic freedoms of storytellers, and supports innovative distribution models that bring an ever expanding array of viewing choices to audiences worldwide.
“Joining the Motion Picture Association further exemplifies our commitment to ensuring the vibrancy of these creative industries and the many talented people who work in them all over the world,” said Ted Sarandos, Netflix Chief Content Officer. “We look forward to supporting the association team and their important efforts.”
PREVIOUS, 11:58 AM: In addition to Netflix shaking up Oscar nominations with a record 15 for the company, news broke today that the streaming giant is in advanced talks to join the Motion Picture Association of America.
If that happens, Netflix would become the first tech company to join the Hollywood trade group that includes theatrical motion picture studios Disney, Paramount, Sony, Universal, Warner Bros and 20th Century Fox. Confirmation of Netflix’s addition to the MPAA could come down as early as today.
Despite some industry assumptions, Netflix enrolling into the MPAA is no way a strategic means to gain leverage in the exhibition community in regards to shortening theatrical windows. The MPAA has typically steered away from such discussions, even when the premium-VOD debate was rearing its head a few years ago. The trade body largely leaves such conversations to the National Association of Theatre Owners.
A Netflix-MPAA partnership would be fruitful in that both are in sync when it comes to many of the latter’s positions in the industry regarding topics like worldwide anti-piracy and state tax film/TV production breaks and credits.
Politico, who first reported the Netflix and MPAA talks this morning, said that over the past two years the streaming giant and Amazon advocated for anti-piracy measures alongside MPAA members and a coalition of other content creators through the Alliance for Creativity and Entertainment.
Another key area where MPAA could possibly help Netflix is China. The MPAA has long lobbied for expanding the quota of Hollywood films in the Middle Kingdom, now numbered around 34 per year (and that’s for any film from any country). Breaking into China’s streaming landscape has been an impossible task for Netflix as the country has a rigid set of restrictions that place a 30% quota on streaming platforms for imported content. Getting TV series or streaming movies kicked out of China is another headache for Netflix given restrictions. Netflix had a licensing agreement with iQiyi, a video streaming subsidiary of Chinese Internet giant Baidu.
“China’s tough for a Western media company to operate in and we’ve not been very active in the market at all — with the exception of licensing some of our shows into the market. And that’s going to be our strategy for a little while,” Netflix chief content officer Ted Sarandos told CNBC back in November.
Sarandos has been public about Netflix’s expansion into India over China, accessing their 450 million Internet homes (half of which watch streaming). That’s where having an anti-piracy partner like the MPAA comes in handy as that country loses around $2.5 billion annually due to IP theft.
Another plus for the MPAA with Netflix’s enrollment is they’ll likely recoup the membership dues they’re bound to lose from 20th Century Fox’s imminent departure from the org thanks to the pending Disney merger. Sources estimate each studio shells out on average an estimated $12M in annual MPAA dues.
In addition, it wouldn’t be surprising to see Amazon join the MPAA down the road.
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