Sundance Takes on Netflix, but Successfully?

Netflix has some new competition from a recognizable brand: Sundance, specifically an on-demand website branded SundanceNow. But how big of a threat is SundanceNow to Netflix’s dominance?

I doubt they’ve even blinked.

SundanceNow seeks to serve a niche audience of indie film enthusiasts, which makes sense since the Sundance brand is synonymous with independent films. As profit margins grow thinner and accessibility expands, it only makes sense that the company seeks to go directly to consumers in a new way.

With independent film making taking a hit in the recession, it’s also great to see a new avenue for such films to gain exposure. Audiences outside of major markets like Los Angeles and New York rarely have access to such movies and as a result largely are ignorant of their existence. SundanceNow seeks to overcome that.

Of course, Netflix already carries a deluge of independent films and at a glance, SundanceNow isn’t prepared to take on the innovative rental company.

Here are a few of the issues that SundanceNow is going to face:

  1. The movies available on SundanceNow are already available on Netflix. Of the first 20 movies featured on SundanceNow’s website, only one isn’t yet available on Netflix. Approximately 75% of the movies are available via Netflix’s streaming service.
  2. SundanceNow is Blockbuster expensive. A rental costs an astronomical $3.99 ($4.99 for some films), and for only a 24-hour rental period. Netflix provides unlimited monthly access to its streaming service for $7.99.
  3. This is a guess, but I imagine that people who really like independent film are likely to watch more than one movie a month. SundanceNow becomes more expensive after its second rental.
  4. Market growth could be an issue. People who don’t watch independent films currently aren’t likely to be drawn to a website like SundanceNow, but are more likely to watch movies recommended through them by watching similar mainstream fare.
  5. SundanceNow isn’t built into Blu-Ray players and probably won’t be anytime soon. You have to hook up your computer to watch the movie on a television.

In an interview with Indiewire, Jonathan Sehring, President of IFC Entertainment – parent company of SundanceNow – said:

“There are companies out there that do things the same way for every movie. That’s fine, but that’s not how we operate. We’ve got just a phenomenal staff and we’re always looking not necessarily to break the mold but to see what’s the best way to reach an audience for a certain film from a certain type of filmmaker. We approach each film uniquely.”

That’s not what I see with SundanceNow. It presents movies in much the same way as Netflix (albeit with a design that seems a bit hurried), but is limited to independent movies. In the world of search, independent movies are just as easily accessible from one place as another. And if you’re entering the quickly evolving world of online streaming but are not looking to “break the mold,” that’s a dangerous approach to take.

SundanceNow has some potential, but it’s going to struggle to realize it.

First, the business model has to change. Charging $3.99 per movie for only 24 hours – and delivering via a platform not easily viewable on television – is ridiculous. I’m actually stunned they launched with this model. SundanceNow has to move to a subscription format, and an affordable one at that.

Their best chance at survival is to build the service around a community of independent film activists. Their offering and price isn’t going to attract or keep people; appealing to what indie fans like about indie films is where the gold is. Acquiring some like-minded websites might be an approach to build that community quickly, but the Sundance brand is strong enough they may be able to do it on their own. Again, I’m a little stunned they didn’t launch with this in mind.

One good perk – SundanceNow is available anywhere in the world, whereas Netflix has country controls.

I doubt SundanceNow will survive. Netflix continues to be extremely innovative and aggressive, and it’s not the only player out there doing cool things. The entire launch of SundanceNow seems behind the times – it’s salvageable, but they are going to have to mix things up quickly to stay relevant. Or become relevant.

By Erik Samdahl
Related categories: Movies