How Streaming Services Have Destroyed the Cinema Business

Introduction

The rise of streaming services has profoundly reshaped the landscape of mass communication, particularly in the realm of film distribution and consumption. This essay argues that streaming platforms, such as Netflix and Disney+, have detrimentally impacted the traditional cinema business by eroding theatrical revenues, commodifying audiences, and exemplifying the logics of platform capitalism. Drawing from the field of mass communication, the discussion will critically engage with key scholars: Henry Jenkins’ concept of convergence culture, which posits potential benefits for cinema through media integration, though this essay disagrees with such optimism; Dallas Smythe’s theory of audience commodification, highlighting how viewers are turned into products; and Nick Srnicek’s framework of platform capitalism, which underscores the monopolistic control exerted by digital platforms. These theories will be linked to case studies, including Netflix’s acquisition of the Knives Out sequels and the day-and-date release models adopted by Warner Bros. and Disney. By examining these elements, the essay demonstrates how streaming has “destroyed” the cinema business, not in a literal sense, but by fundamentally undermining its economic viability and cultural role. The analysis aims to provide a balanced yet critical perspective, supported by academic evidence, while acknowledging the complexities of digital disruption in media industries.

Convergence Culture and Its Limitations in the Streaming Era

In the context of mass communication, Henry Jenkins’ seminal work on convergence culture offers a framework for understanding how old and new media forms intersect, potentially creating synergies that benefit industries like cinema (Jenkins, 2006). Jenkins argues that convergence fosters participatory culture, where audiences engage more deeply with content across platforms, which could arguably enhance the visibility and longevity of films. For instance, he suggests that transmedia storytelling—extending narratives from films to online platforms—can expand audience reach and generate additional revenue streams for Hollywood studios. In relation to streaming, Jenkins might view services like Netflix as complementary to cinema, enabling global distribution that bolsters a film’s cultural impact and draws viewers back to theaters for premium experiences.

However, this essay disagrees with Jenkins’ optimistic outlook, contending that convergence has instead accelerated the decline of traditional cinema. While Jenkins highlights collaboration between media forms, the reality in the streaming age reveals a predatory dynamic where platforms siphon content away from theatrical releases. Convergence, in this sense, does not equitably benefit all stakeholders; rather, it empowers digital giants at the expense of brick-and-mortar cinemas. For example, the integration of streaming into daily media consumption has shifted audience preferences toward on-demand viewing, reducing the incentive for theater attendance. This critique aligns with broader mass communication debates on digital disruption, where convergence often masks underlying power imbalances (Hesmondhalgh, 2019). Indeed, empirical data from the Motion Picture Association indicates a significant drop in global box office revenues post-2019, partly attributable to streaming competition, with 2022 figures still 25% below pre-pandemic levels (Motion Picture Association, 2023). Therefore, while Jenkins’ theory provides a useful lens for media integration, it underestimates how convergence, in practice, erodes the cinema business by prioritizing digital accessibility over communal theatrical experiences.

Audience Commodification in Streaming Platforms

Building on this foundation, Dallas Smythe’s theory of audience commodification, rooted in political economy approaches to mass communication, further illuminates how streaming services exploit viewers to undermine cinema (Smythe, 1981). Smythe posits that audiences are not mere consumers but commodities sold to advertisers, with their attention and data generating value for media owners. In the streaming context, this manifests through subscription models and algorithmic personalization, where user data is harvested to refine content delivery and maximize engagement. Platforms like Netflix commodify audiences by treating viewing habits as tradable assets, often at the expense of traditional media ecosystems.

This commodification directly contributes to the destruction of the cinema business by diverting audiences from theaters to home-based streaming. For instance, streaming services use data analytics to predict and produce content that keeps users subscribed, reducing the cultural pull of cinema as a social event. Smythe’s framework highlights the limitations here: while audiences gain convenience, they lose the collective experience of cinema, which historically fostered community and cultural discourse. Critics might argue that this shift empowers viewers, but evidence suggests otherwise; a report from the British Film Institute notes that UK cinema attendance fell by 30% between 2019 and 2022, correlated with rising streaming subscriptions (British Film Institute, 2023). Furthermore, this commodification exacerbates inequalities, as lower-income audiences, unable to afford theater tickets, become locked into streaming ecosystems that prioritize profit over artistic diversity. Thus, Smythe’s theory underscores a key problem in mass communication: the transformation of audiences into data commodities accelerates the marginalization of cinema, turning it from a vibrant industry into a relic overshadowed by digital platforms.

Platform Capitalism and Its Impact on Film Distribution

Nick Srnicek’s concept of platform capitalism provides another critical lens, emphasizing how digital platforms operate as monopolistic entities that extract value through network effects and data control (Srnicek, 2017). In mass communication studies, this framework reveals how companies like Netflix and Disney leverage their platforms to dominate content distribution, often bypassing traditional cinema chains. Srnicek argues that platforms thrive by intermediating between users and producers, capturing surplus value through scale and exclusivity. Applied to streaming, this means acquiring or producing films that could sustain cinemas but are instead funneled into proprietary ecosystems, thereby “destroying” the theatrical model.

Linking this to case studies illustrates the argument’s validity. Netflix’s acquisition of the Knives Out sequels in 2021 exemplifies platform capitalism’s predatory nature. For a reported $450 million, Netflix secured exclusive rights to Knives Out 2 (Glass Onion, 2022) and its follow-up, effectively removing these high-profile films from widespread theatrical release and confining them to streaming (D’Alessandro, 2021). This move aligns with Srnicek’s critique, as Netflix uses its platform dominance to hoard content, reducing cinema’s access to blockbuster draws and contributing to a 15% decline in US theater revenues that year (Box Office Mojo, 2023). By commodifying these films as subscriber bait, Netflix embodies Smythe’s audience commodification while contradicting Jenkins’ convergence benefits, as the convergence here favors the platform over collaborative growth.

Similarly, Warner Bros.’ and Disney’s day-and-date release models during the COVID-19 pandemic highlight platform capitalism’s disruptive force. In 2021, Warner Bros. released films like Dune and The Matrix Resurrections simultaneously in theaters and on HBO Max, while Disney adopted a similar strategy for Black Widow on Disney+ (Welk, 2021). These strategies, intended as temporary measures, arguably normalized streaming parity, eroding the exclusivity of cinema. Drawing on Srnicek, such models position platforms as gatekeepers, capturing audience data and revenue that would otherwise support theaters. This ties back to audience commodification, as day-and-date releases treat viewers as interchangeable across platforms, diminishing the unique value of theatrical viewing. Evidence from industry reports shows that these releases led to cannibalized box office earnings, with Black Widow’s theatrical haul reportedly reduced by 20-30% due to streaming availability (Fuster, 2021). Moreover, disagreeing with Jenkins, this convergence does not help cinema but accelerates its decline by training audiences to expect home access, thus weakening the business model reliant on ticket sales.

Conclusion

In summary, this essay has argued that streaming services have destroyed the cinema business by commodifying audiences, embodying platform capitalism, and misapplying convergence culture in ways that prioritize digital monopolies over traditional distribution. Through engagement with Jenkins (2006), whom this analysis critiques for overlooking convergence’s downsides; Smythe (1981), who exposes audience exploitation; and Srnicek (2017), who critiques platform dominance, the discussion has linked these theories to case studies like Netflix’s Knives Out acquisitions and day-and-date models from Warner Bros. and Disney. These examples demonstrate tangible harms, such as revenue losses and reduced theatrical exclusivity, within the mass communication field. The implications are profound: without regulatory intervention, cinema risks further marginalization, potentially stifling cultural diversity and communal experiences. Future research could explore hybrid models that balance streaming innovation with cinema preservation, ensuring the industry’s survival in an increasingly digital era. Ultimately, while streaming offers convenience, its unchecked growth poses existential threats to the cinema business, highlighting the need for critical scrutiny in media studies.

References

• British Film Institute. (2023) Statistical Yearbook 2023. BFI.
• Box Office Mojo. (2023) Yearly Box Office. IMDbPro.
• D’Alessandro, A. (2021) Netflix Closes $450M+ Deal for ‘Knives Out’ Sequels. Deadline.
• Fuster, J. (2021) ‘Black Widow’ Lawsuit: How Disney’s Streaming Strategy Could Be Permanently Altered. The Wrap.
• Hesmondhalgh, D. (2019) The Cultural Industries. 4th edn. Sage Publications.
• Jenkins, H. (2006) Convergence Culture: Where Old and New Media Collide. New York University Press.
• Motion Picture Association. (2023) THEME Report 2023. MPA.
• Smythe, D. W. (1981) Dependency Road: Communications, Capitalism, Consciousness, and Canada. Ablex Publishing.
• Srnicek, N. (2017) Platform Capitalism. Polity Press.
• Welk, B. (2021) Warner Bros. to Release Entire 2021 Slate on HBO Max and in Theaters. The Wrap.