How the Cloverfield Paradox Deal was a Good Idea for Everybody

Note: Nothing in this article is intended to be a commentary on the quality of the new movie Cloverfield Paradox. It simply focuses on the business strategies behind the deal.

Joel: Last year during the Super Bowl, Netflix released a trailer for the movie Bright, a movie that would be released eleven months later in December of last year. This year, Netflix’s big trailer release was for Cloverfield Paradox, a movie that, much to everyone’s surprise, was released right after the game was over. Even for those that have been following the story of the third Cloverfield movie, this movie was entirely unexpected, but it’s release is a clever play on the part of both Netflix and Paramount, and is worth taking a closer look at.

For those that don’t know, Cloverfield Paradox was originally a movie titled God Particle. It was an original movie that was later retroactively changed to serve as the third installment in the Cloverfield franchise. This isn’t a huge deal as the second Cloverfield movie came about very much the same way with the movie being based on an original spec script titled The Cellar. It’s been interesting to see the shifting information that’s been surrounding God Particle/Cloverfield 3 for the past several months. The release date has changed several times, moving from February 2017 to October 2017 to February 2018, to April 2018, which was the last release date that was officially announced before the Netflix trailer. Usually long delays like that are a sign that something is going on behind the scenes, and may be an early warning sign that a movie might be in trouble. Still, that’s not always the case, and it’s easy to suggest that the delays in this case may have been about getting the original storyline to fit into the Cloverfield universe.

Upon the movie’s release and initial critical reaction, it’s easy to see that the movie’s behind the scenes problems were more extensive. The movie currently sits at 18% on Rotten Tomatoes (compared to the 77% and 90% the first two Cloverfield movies have respectively). It’s likely that the delays were due to Paramount knowing that they had a flop on their hands. Again, this isn't’ to say that you’re wrong if you happened to enjoy Cloverfield Paradox, but it’s clear that there were concerns at Paramount that the movie wouldn’t be able to make its money back, and it seemed that attempts to right this supposed sinking ship weren’t working.

This is where Netflix steps in. Netflix reportedly paid $50 million for the rights to distribute Cloverfield Paradox, which can be seen a sa sort of lifeline for Paramount. Now, this movie that was expected to be a box office bomb was profitable for the company before it had even been released. (For the record, the budget for Cloverfield Paradox was quoted as being somewhere between $40 million and $50 million.) This means that Paramount was able to get their money back without having to spend anything on advertising, as well as getting to keep the Chinese distribution rights for the movie. Perhaps most importantly of all, Paramount gets to keep the rights to all future Cloverfield properties meaning that Cloverfield 4 will still likely be a theatrical release like the first two were. In many ways Netflix seems to have stepped in and saved the day for Paramount. But that begs the question, why would they do this. It’s clear how this was a great deal for Paramount and Bad Robot Productions, but Netflix just spent $50 Million on a movie that’s supposedly terrible, why would they do that?

To answer that we have to remember how Netflix works. It’s harder to measure the success or failure of any particular Netflix property. One way to do that is to look at viewership of each Netflix original, but we can’t do that if for no other reason that Netflix keeps those numbers secret. They have occasional press releases where they will announce that this show or that movie has been viewed more than X number of times in its first twenty-four hours, but we don’t have a real way to break down the numbers behind each original property that Netflix has. Rather than numbers, Netflix is more focused on Netflix the brand.

Netflix has solidified themselves as a powerhouse when it comes to TV shows. But, when it comes to movies, Netflix has yet to make the same level of an impact. And that’s not because they haven’t tried. Though you may not have noticed, Netflix released sixty original movies in 2017, that’s more than one a week, and they plan to meet or exceed that number in 2018 and beyond. Despite that, Netflix movies still don’t have the same feel of “real” movies the way that there TV shows do when compared to show released through a more traditional model. This is a view that Netflix has been working to change for the past few years. You have examples like their four picture deal with Adam Sandler, and Bright is another great example of a movie that feels like it was made to bring the big screen “real” movie feel to Netflix. Cloverfield Paradox is the latest, and perhaps the biggest step in this direction. Here we have a movie that is the third movie in a theatrical franchise, a franchise that will continue to be a theatrical franchise by the way, that is a Netflix movie. Netflix wants you to think of them as a movie provider just as much as a television provider and this is their way of doing that.

When looking at how Netflix operates, it’s important to remember that Netflix isn’t trying to sell any one movie or show, they’re trying to sell Netflix. They don’t want you to get Netflix because you need to watch the new season of Orange is the New Black, they want you to get Netflix because you need Netflix. There goal is to be an integral and continuous part of your entertainment One way to do that is to constantly have new content to offer. In addition to the aforementioned sixty movies in a year that Netflix released there were also plenty of TV shows and stand up specials that came out. It seems that there’s always something new that’s just come out or is about to come out on Netflix. And the release strategy of Cloverfield Paradox plays into that. Most people first heard about this movie when they saw the trailer during the Super Bowl that ended with coming soon. Soon apparently meant very soon as another trailer, right after the game ended with “now available.” Netflix is portraying themselves as a provider of instant entertainment.

Cloverfield isn’t making Avengers movie or anything, but it’s first two movies grossed over $100 Million each, so this isn’t a small franchise. And the latest installment just showed up on Netflix without warning. For non sports fans, it was one of the biggest stories to come out of the Super Bowl. Netflix payed not so much for the rights for the movie, but to make sure they are front and center in one of the biggest, most unexpected entertainment stories of the month. Despite the response to the quality of the movie, The handling of the premiere of Cloverfield Paradox has worked out wonderfully for Netflix. Both companies have been able to get exactly what they needed out of this deal, and the Cloverfield franchise is able to move forward. Cloverfield 4 is said to already be underway, and reported rumors about Cloverfield 5 have already started. Netflix has implanted themselves as a part of a major franchise, and Paramount gets to continue production on a series that they have yet to officially lose a cent on.