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How Netflix and Paramount Pictures took a crappy movie and turned it into gold

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The art of the deal

The Cloverfield Paradox - Mundy looks concerned with his chin in his hand
Mundy (Chris O’Dowd) looking pensive in The Cloverfield Paradox.
Scott Garfield/Netflix

The Cloverfield Paradox isn’t a very good movie, but that fact doesn’t really matter to any of the companies involved in its production or distribution.

This is the sort of movie that would have lost money at the box office after a typical, and expensive, run of trailers and promotion. A standard theatrical release would have been poisoned by poor reviews and word of mouth, but the current situation allowed everyone to walk out of the film a winner.

Well, except the audience. And even that is arguable.

Taking a bad movie and turning it into gold

It has been reported that the film’s budget was around $40 million, and it seems as if everyone knew it was in trouble for some time.

“Sources say the movie needed some work, and while Abrams expressed an intent to get down to business in postproduction, it was too little, too late,” The Hollywood Reporter stated. “Several sources suggested that Abrams’ attention may be taken up by his unexpected new assignment, the final installment of the Star Wars Skywalker episodes, which he signed on to in September after the firing of director Colin Trevorrow.”

The Cloverfield Paradox would have cost Paramount more money to promote before a theatrical release, and the first run of bad reviews would likely have been followed by a second run of stories about how the film failed to do well at the box office. The standard approach to releasing a film in theaters, in this case, would have turned a known issue into a very public way to lose a large amount of money.

But Netflix provided a way out. The Hollywood Reporter is now saying that Netflix paid around $50 million for The Cloverfield Paradox, which means that the movie became instantly profitable for Paramount. The studio no longer has to worry about ticket sales or post-release promotion. It just signs a few papers, and suddenly a flop becomes a film that made back its budget and then some. After that, it becomes Netflix’s problem.

If these numbers are correct — and that’s assuming a lot — The Cloverfield Paradox is one of the most deft handlings of a stinker in Hollywood history.

A Super Bowl ad isn’t cheap, but it’s a lot cheaper than a full promotional campaign, and Netflix was promoting itself as much as it was promoting the movie. That wasn’t a trailer for The Cloverfield Paradox; it was a commercial for Netflix that sold the idea that surprises could come at any moment. Netflix bought a lot of promotion with that movie and its one ad.

Netflix doesn’t need to sell tickets; the company just needs to bring buzz to its platform. And promoting a surprise film release during the Super Bowl before allowing subscribers to stream the whole thing after the game is certainly a great way to build some buzz. Netflix looks like the platform where anything is possible, and big releases can happen at any time. You better subscribe so you don’t miss out!

We don’t know how many people have watched The Cloverfield Paradox, but viewership numbers are almost beside the point. Netflix bought a movie with a big name attached for a song, and turned it into a smart promotional message for its entire business. It’s the service where anything is possible, and surprises are inevitable. Paramount was able to take a movie that would have lost a significant amount of money, and sell it for a profit without pouring any more money down the drain. Everyone wins.

So how did the audiences feel? The Cloverfield Paradox isn’t good, but Netflix audiences likely expect less from a movie that’s streaming on a service they already pay for than from a theatrical release that requires the cost of a few tickets and a night out. Even if people were disappointed in the movie, Netflix is selling the idea that you don’t know where the next blockbuster is coming from on its service, nor when it will arrive.

There is also the possibility that the studio or Netflix has costs that aren’t accounted for in this sort of napkin math, but even if that’s the case, everyone did the right thing to minimize their losses and make the most out of what they had.

You may not have liked The Cloverfield Paradox, but the money was well spent if you signed up or continue to pay for Netflix while hoping that the next movie released on the service is better.