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The Cloverfield Paradox may have cost Netflix more than $50 million

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And it still may have been a good bet for both Netflix and Paramount, which sold it off

Scott Garfield / Netflix

According to an article in The Hollywood Reporter, Netflix paid Paramount Pictures “north of $50 million” for release rights to The Cloverfield Paradox, the third movie in the extremely loose trilogy launched by Cloverfield in 2008 and continued with 10 Cloverfield Lane in 2016. The Cloverfield Paradox, initially written as a story unrelated to the franchise, was brought into the storyline with some script tweaks, and premiered on Netflix immediately after Super Bowl 2018, with no advance warning or even a teaser trailer. The move prompted shock and excitement in the film industry (and some ecstatic lead-up and aftermath tweets from prominent filmmaker Ava DuVernay‏), because the release strategy was so unconventional, on a par with Beyoncé’s surprise release of Lemonade in 2016.

But the fallout has been harsher. Critical response to the film has been almost universally negative, while fan response has been mixed but vehement on both sides. Even people who embraced the idea of the no-warning release — the ultimate expression of the cinematic “mystery box” Cloverfield series producer J.J. Abrams has been touting for years — rejected the film itself. And given the quality of the film, the circumstances of moving from a planned theatrical run on April 20th to an abrupt dump to a streaming service looked suspicious, like Paramount was literally throwing the film away.

Given that reported price tag, though, the sale to Netflix seems like an unqualified win for Paramount. Various industry outlets are reporting Cloverfield Paradox’s production budget as somewhere between $40 and $55 million, which would suggest Paramount broke even on the film, or at least came close — a prospect that certainly wasn’t guaranteed with a theatrical release. The original Cloverfield, made on a $25 million budget, grossed $170 million in worldwide theatrical release, and 10 Cloverfield Lane, a more modest production with a $15 million budget, grossed $100 million worldwide. But Cloverfield Paradox came with a significantly higher price tag, and traditionally, that number can double when marketing and distribution costs are added. By skipping the theatrical release, Paramount likely saved money, time, and the scrutiny that comes with embarrassing widespread word of mouth.

For Netflix, on the other hand, viewership numbers (which the company still keeps secret) never seem to matter as much as publicity, notoriety, and staying at the center of the ongoing cultural conversation. As it infiltrates industry awards and alters how movies are marketed to viewers, its corporate strategy seems focused more on claiming the industry spotlight than on producing or purchasing great cinema. That explains the company’s shrinking roster of classic films, as it prioritizes novelty and attention-grabbing new titles over wooing cinephiles with a deep streaming library. It also explains the willingness to put $50 million into this film.

The question is whether the process will eventually hit a backlash point. Netflix’s original TV series — particularly hits like Orange Is the New Black, House of Cards, and Stranger Things — have become a compelling reason to subscribe to the service. But its original films, especially large-scale releases like Bright and Crouching Tiger, Hidden Dragon: Sword of Destiny — haven’t been received with the same kind of appreciation. At some point, the question becomes whether even an immense burst of temporary publicity is worth this kind of high price tag, if it tarnishes the Netflix brand.

For now, though, it seems like the Netflix pickup is serving both companies — especially since, according to the Hollywood Reporter story, Paramount retains the sequel rights, home-release rights, and Chinese market rights, and therefore has more chances to make money with the movie and the franchise. It remains to be seen whether either of those opportunities can be lucrative, given the toxic word of mouth around the film. But Paramount is in a good position to let Netflix take the risks and the backlash, and then pick up any remaining profit to be had.