









































Communication, Society and Media 
ISSN 2576-5388 (Print) ISSN 2576-5396 (Online) 

Vol. 6, No. 4, 2023 
www.scholink.org/ojs/index.php/csm 

1 
 

Original Paper 

The Influence and Fusion of Online Films with Traditional 

Cinema: A Case Study of the Netflix Platform 
Anran Liu1* 

1 Hong Kong Baptist University, Kowloon, Hong Kong, China 
* Anran Liu, Hong Kong Baptist University, Kowloon, Hong Kong, China 

 

Received: August 31, 2023    Accepted: September 8, 2023    Online Published: September 15, 2023 

doi:10.22158/csm.v6n4p1                         URL: http://dx.doi.org/10.22158/csm.v6n4p1 

 

Abstract 

The emergence and popularization of streaming movies have witnessed the change in acceptance mode 

and acceptance psychology of traditional movie and television, and broke the confinement of time and 

space. Taking Netflix, a streaming online platform, as a case study, this research endeavors to explore 

the impact of streaming movies on traditional cinema movies and their convergence utilizing literature 

analysis, classification and comparative analysis, case study research method, and data collection and 

analysis method. 

Keywords 

streaming movies, cinema movies, Netflix, streaming media platforms 
 

1. Introduction 

1.1 The rapid development of the Internet: a new product of “Internet + movie” 

Since the advent of the booming development of the Internet, the movie industry and the streaming 

media industry have been more closely integrated, establishing a unique movie viewing mode, i.e., 

streaming movies. 

The fast-paced societal development and the widespread popularity of internet culture have 

increasingly led to the dominance of “fragmented” time in people’s daily lives. The emergence of 

streaming movies, on the other hand, aligns perfectly with the current “fragmented” lifestyle. The 

profound development of digital technology and streaming media has drastically transformed the movie 

consumption habits of global audiences. The traditional movie viewing mode, constrained by time and 

space, is gradually being supplanted by online streaming platforms. Moreover, the mobility of 

electronic devices has enriched the viewing experience in no small degree. With the advancement of 

video streaming technology and the 5G internet, the streaming movie viewing experience has become 



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notably clearer and smoother, amplifying the audience’s sense of enjoyment in watching movies. 

The evolution of the streaming movie industry showcases a profound convergence between digital 

media technology and the cinema sector, giving rise to a dissemination model and creative paradigm 

that distinctly diverges from traditional cinema movies. This transformation has ushered in structural 

changes across movie production, promotion, and financial aspects. The internet, as a communication 

medium, has provided a global platform for the expansion of streaming movies worldwide, allowing 

audiences to directly engage with a diverse range of global streaming movie works through various 

channels. Streaming movies, as a result, wields an immediate and far-reaching clout on an international 

scale. In the long run, streaming movies are poised to become a direct and convenient presentation 

format, even transcending cultural and geographical boundaries. 

1.2 Video media platforms are “catalysts” for the growth of streaming movie industry  

Taking Netflix as a prime example, established in 1997, the platform began its journey as an online 

DVD disc rental service, later transitioned to online streaming, and eventually evolved into a hub for 

producing high-caliber original content. By continually refining user experiences through technological 

innovation and big data analysis, Netflix has now risen to become the world’s foremost online video 

streaming service provider. 

High-quality streaming movies can reflect the brand identity of a certain video platform, nurturing a 

stronger sense of trust from the audience in the platform’s brand. In this way, it not only enhances user 

engagement but entices a considerable influx of new users, thereby solidifying the platform’s position 

as a stable and enduring competitive force. Consequently, an innovative model for streaming movies 

has taken shape, wherein the platform takes charge of copyrights, development, investment, and 

production, and subsequently carries out the marketing and distribution efforts in-house. Recent years 

have seen the seismic impact of the COVID-19, which inflicted the widespread closure of cinemas and 

became a substantial blow to traditional cinema movies. The pandemic necessitated that numerous 

viewers remain confined to their homes, consequently transforming them into potential streaming 

customers. This unfolding situation has provided unprecedented growth prospects for streaming 

movies. 

1.3 Series of IP drives the development and rise of streaming movies 

The creative genesis of streaming movies primarily stems from the meticulous collection, investigation, 

integration, and iterative refinement of voluminous datasets sourced from the internet. Alternatively, 

they may directly adapt premium IPs from the online sphere. Each strategic approach innately 

establishes a receptive audience base for streaming movies, which further ensures revenue stability. 

In the late 20th century, the Hollywood movie industry embarked on a series of strategic commercial 

endeavors, notably involving high-profile science fiction IPs such as Star Wars, Star Trek, and Harry 

Potter. These initiatives artfully leveraged the loyal fan communities associated with the iconic IPs to 



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make substantial financial gains. Notably, of all the global movie releases of 2019, the top ten 

highest-grossing movies exclusively featured sequels from renowned movie series or adaptations of 

established IPs. In comparison to traditional cinema releases, streaming movies possess a deeper 

alignment with the prevailing currents of mass culture. Their inherent audience base, coupled with 

fervent fan loyalty, renders IP-based streaming movies particularly adept at reaping latent dividends. 

Illustratively, following the collaboration with the celebrated writer Stephen King, the prominent 

U.S.-based Netflix platform has successfully ventured into the realm of streaming movie production, 

resulting in such critically acclaimed works as In the Tall Grass, Gerald’s Game, and 1922. These 

exemplary productions underscore Netflix’s prowess in the effective utilization of IP-driven content. 

 

2. The Distribution Mode and Viewing of Streaming Movies 

Streaming movie, as a novel cinematic art form, predominantly relies on the Internet for distribution 

and presentation, exhibiting a heightened level of flexibility, diversity, and rapidity compared to its 

traditional cinema counterparts. This variance in medium profoundly shapes audience interaction and 

viewing patterns. The experience of conventional cinema movies is marked by constraints, passivity, 

and a one-way flow, whereas the viewing mode of streaming movies is characterized by autonomy, 

liberation, proactive involvement, and interactivity. The disparities between cinema movies and 

streaming movies, however, primarily reside in the realm of psychological perception rather than 

fundamental differences in content essence. 

2.1 From passive consumption to proactive aesthetic engagement 

Compared to the traditional cinema movies, streaming movies exhibit a distinct absence of social 

attributes, but leaning more towards individualism, and breaking free from the constraints of time and 

space in the meanwhile. The audience are free to select their preferred viewing times via any medium 

and is accompanied by the ability to exercise control over the pace and the viewing environment, thus 

granting them an unprecedented level of autonomy. 

Firstly, in terms of time, the structural design of information in streaming movies takes a “non-linear” 

approach, diverging from the linear viewing experience inherent in traditional cinema movies. The 

intermittent operability of personal media empowers the audience to pause, play, accelerate, or revisit 

segments of their interest, while skipping over those less engaging ones. Such an arrangement affords 

viewers the discretion to determine the sequence of viewing. Consequently, streaming movies offer a 

remarkable degree of flexibility compared to their cinema counterparts, enabling viewers to seamlessly 

integrate movie-watching into their personal schedules. Secondly, in the realm of “space”, despite the 

fact that the overall sensory impact of traditional cinematic experiences may surpass that of online 

streaming viewing, it remains a passive aesthetic process, as one must visit a physical cinema to 

partake in the movie-watching experience under the traditional movie paradigm. In contrast, streaming 



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movies exist within a controlled physical-audiovisual milieu. Disruption of this nature of the traditional 

movie framework grants audiences the prerogative to choose their preferred viewing location, 

effectively transcending the limitations of time and space. Moreover, the introduction of compact 

network terminals, such as laptops, iPads, and smartphones, has catalyzed a shift from collective 

appreciation to individualized engagement. While platforms like Netflix exemplify such transformation, 

offering software compatibility across diverse hardware devices, so that seamless transitions among 

television, gaming consoles, set-top boxes, tablets, and smartphones are possible. Finally, regarding the 

content, the extensive library available on streaming movie platforms significantly broadens the scope 

of viewer choice, deviating from the practice of cinemas dictating “what to watch”. Instead, viewers 

exercise autonomous selection over the movies they wish to watch, free from the confines of cinema 

schedules. Such empowerment allows them to revisit movies from any historical period, thus 

transitioning the viewing experience from passive consumption to proactive aesthetic engagement. 

2.2 From recipients to creators: interactivity 

Certain streaming movies exhibit the remarkable capacity for dynamic adjustments based on audience 

feedback, leading to potential alterations in plot trajectory and casting choices, thereby ensuring 

alignment with audience preferences. This transition from the conventional passive reception of 

information in traditional cinema to the egalitarian exchange of information on streaming movie 

platforms, facilitated by an open production process, affords audiences an unprecedented level of 

involvement in the creative process. Interaction between these platforms and fan communities 

engenders the assimilation of superior creative concepts, adeptly catering to audience exigencies, 

thereby amplifying impact, elevating movie prominence, and strategically prepositioning for 

promotional endeavors during the production continuum. In real-time playback scenarios, the ability to 

produce and shoot subsequent plot nuances, responsive to the pulse of audience sentiment and 

anticipations, assumes paramount significance. Consequently, throughout this entire process, the 

confluence of audience engagement, leveraged by the cost-effective and profoundly interactive nature 

of the internet, plays an unequivocally pivotal role. 

Furthermore, some streaming movies introduce diverse plot trajectories, allowing audiences to exercise 

autonomy in determining the narrative course and ultimate denouement, effectively empowering them 

as co-authors of the storyline. An exemplar in this regard is the interactive movie Black Mirror: 

Bandersnatch, a brainchild of Netflix, which catalyzed extensive discourse among its viewers. This 

paradigm shift denotes the dissolution of the traditional unilateral dissemination model, replaced by a 

reciprocal selection mechanism, effectively reshaping the social dynamics between content producers 

and recipients. In this digital ecosystem, recipients also serve as disseminators, epitomizing the 

transformative influence of streaming movies on audiences. 

 



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2.3 From unidirectional dissemination to bidirectional interaction 

In the traditional realm of cinematic experiences, audiences were subject to a communication model 

that followed a linear path of “creation-dissemination-appreciation”, characterized by its passivity and 

unidirectional flow. The emergence of big data, employed by streaming movie platforms, 

notwithstanding, has irrevocably reshaped the traditional unidirectional broadcast paradigm, but 

ushered in a new era featured by heightened information timeliness and increased audience engagement. 

As per user behaviors, these platforms now tailor content recommendations for each user, leading to a 

more dynamic human-machine interaction and transitioning the communication paradigm from a 

“unidirectional dissemination” model to a more interactive “bidirectional interaction”. 

Taking Netflix as an illustrative case, the high-performance Cinematch system deployed on Netflix 

empowers viewers to access precisely what aligns with their preferences, epitomizing this new 

bidirectional mode of communication. As a matter of fact, Netflix processes an astounding daily data 

volume exceeding 10 petabytes, coupled with the analysis of over 40 billion new events, all with the 

objective of comprehending the nuanced viewing habits of its users. The data encompasses an array of 

meticulous attributes, including peak service usage times, currently watched movies, viewer ratings, 

and the diverse devices utilized to access Netflix, among other granular categories. Furthermore, 

Netflix employs a row-based two-tiered ranking system in its homepage design, strategically 

positioning the most strongly recommended content on the far-left side of each row, with 

recommendations gradually tapering as one moves rightward. Likewise, as one scrolls downward on 

the page, the recommendation intensity for each subsequent row diminishes, ensuring that the most 

prioritized content occupies the viewer’s central visual field, thus maximizing engagement. 

Furthermore, on the Netflix platform has established a specialized recommendation engine, 

complemented by the utilization of a “Thumbs System” for user rating. Through this system, users can 

express their evaluation of movies by giving a “Thumbs Up” or “Thumbs Down”. Netflix 

synergistically leverages both rating mechanisms to deliver customized content recommendations to its 

users.  

The copious data derived from these rating systems is harnessed by Netflix’s sophisticated 

recommendation algorithm software to identify audiences with akin preferences. Beyond this, Netflix 

employs a granular classification of streaming movies, and a substantial workforce is dedicated to 

meticulously annotating movies, marking such elements as creative origins, temporal settings, viewing 

maturity levels, and other pertinent aspects. This meticulous process results in the creation of a diverse 

array of over ten thousand distinct tags. By seamlessly integrating these tags with the nuanced viewing 

habits of users, Netflix meticulously tailors bespoke content, aligning with individual preferences. 

In the contemporary landscape of new media and the digital environment, the mode of information 

dissemination has transitioned from the conventional unidirectional broadcast of traditional cinema to a 



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bidirectional paradigm, where audiences cease to be passive recipients of information. 

 

3. The Creative Approach and Artistic Attributes of Streaming Movies 

The dissimilarities in the dissemination modes between streaming movies and traditional cinematic 

movies engender distinct cinematic artistry. Drawing on the unique approaches of dissemination and 

reception inherent to streaming movies, a novel array of creative production strategies and artistic 

attributes emerge, setting it apart from conventional cinematic releases. 

In the realm of production, steaming movies capitalizes on significant real-time advantages, primarily 

attributable to their compressed production timelines, lower entry barriers, and reduced complexity 

during phases such as thematic selection and post-production. Edges of this nature afford streaming 

movies a formidable immediacy, enabling swift responses to contemporaneous trending topics while 

facilitating nimble adaptations based on audience feedback concerning narrative trajectories, character 

ensembles, and other pivotal facets. In stark contrast, traditional cinema movies adhere to lengthier 

creative periods, thereby presenting challenges in modifying core elements like the script, cast, or even 

the set design and musical score once crystallized. Moreover, the discerning use of internet-generated 

big data within steaming movie platform significantly shapes project determinations, narrative 

evolutions, casting decisions, audience profiling, and prognostications of box office potential, exerting 

profound influence over the formative stages of streaming movie production. 

Admittedly, it is evident that certain streaming movies, in pursuit of entertainment value, may 

inadvertently compromise on overall quality. Nevertheless, this should not misconstrue the broader 

context. Consider Netflix, a paragon in this domain, allocated an extensive budget of $17.3 billion 

(equivalent to approximately 118.9 billion RMB) in 2020 for the creation of movies and television 

content. Such a substantial financial commitment underscores Netflix’s unwavering dedication to 

content quality. As emphasized by Marc Randolp, the co-founder of Netflix, their foundational mission 

persists—to create culturally resonant, high-caliber movie and television productions is an aspiration 

guiding them throughout their professional trajectory. 

Irrespective of the cinematic domain—be it the conventional cinematic experience or the dynamic 

realm of streaming movies—content reigns as the preeminent factor. Absent a robust content 

foundation, even the most astute marketing endeavors inevitably falter. The adulation of audiences is 

reserved for movies of elevated quality, engendering financial viability and fostering a self-sustaining 

cycle within the industry. 

3.1 Genre: Diversity and youthful IP 

In the pursuit of optimized investment returns, both narrative themes and storytelling techniques in 

movie production are evolving toward diversification and rejuvenation. This evolution, marked by 

rebellious and innovative departures from traditional cinematic norms, reflects the distinct nature of 



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streaming movies. 

The commercial dynamics of traditional cinematic movies inherently compel a focus on the popularity 

of individual works, operating within a framework of “singular consumption”. The success of a movie 

correlates directly with the extent of its audience engagement, thereby leading production studios to 

meticulously select established, high-grossing genres. These productions often boast star-studded casts 

and employ visually captivating effects, and hence, they generate anticipation even before their release. 

The costly traditional cinematic market typically aligns with the Pareto principle, where a mere 20% of 

top-tier movies yield approximately 80% of the profits. In contrast, streaming movies operate under a 

subscription-based model, emancipating itself from the confines of time and space. This model caters 

to the broad user base while simultaneously targeting niche markets, a phenomenon akin to capturing 

the long-tail effect of audience preferences. 

Netflix is an exemplary case in this regard. As a streaming media platform, its revenue solely derives 

from user subscription fees. When evaluating the investment prospects of a movie, Netflix places 

paramount importance on its potential to attract new subscribers. This broader audience necessitates a 

more diversified content offering. Harnessing intricate algorithms, Netflix creates a myriad of content 

tailored to micro-audiences. The personalization extends beyond interactive services for each user to 

encompass a diverse portfolio of content. Remarkably, Netflix categorizes movies into 19 “Umbrella 

genres”, further subcategorizing them into 400 “subgenres”, and an astonishing 76,897 “micro-genres”. 

These comprehensive classifications integrate seamlessly into the algorithm, enhancing the diversity 

and personalization of recommended content. 

3.2 Visual elements: primacy of content, relatively reduced visual demands 

Compared to traditional cinematic movies, the narrative of streaming movies embraces influences from 

classical cinematic storytelling while simultaneously undergoing a shift away from grand narratives, 

manifesting a preference for fragmented storytelling with pronounced digital characteristics. 

Streaming visuals distinguish themselves from their traditional counterparts by adopting a narrower 

aspect ratio and relatively lower pixel density. This results in finer details, distinctly visible on large 

cinema screens, appearing comparatively blurred or often overlooked in the streaming medium. 

Constrained by the limitations of hardware, streaming movies tend to limit the usage of wide-angle and 

panoramic shots. From a lighting and color perspective, the absence of the ability to convey the rich 

spatial intricacies in streaming visuals necessitates a departure from the elaborate lighting effects and 

intricate color palettes commonly employed in the grand cinematic experience. Instead, a preference 

emerges for a more expressive use of color and light schemes, striving to create a simplified yet 

aesthetically pure visual ambiance. 

Additionally, within the confined frame of streaming movies, the perception of multi-layered depth 

becomes less discernible to the audience. Consequently, the pursuit of extended takes and deep-focus 



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shots, often characteristic of traditional cinema, experiences a relative reduction in steaming cinematic 

practice. Instead, a shift towards montage theory is evident, emphasizing that each individual frame 

must possess impact and convey a clear message, with the overall significance of the imagery realized 

through the meticulous editing process. 

3.3 Narration: “Engagement” and relatively compact narrative rhythm  

Given the unique distribution mode of Streaming movies within the context of a fragmented 

consumption era, the audience’s attention spans are notably limited. In contrast to the more contained 

offline cinematic environments, attention in the online setting tends to be more susceptible to diversion, 

coupled with a significantly higher degree of viewer autonomy. Consequently, streaming movies are 

compelled to consistently seize the audience’s interest through a taut narrative pace and strategic plot 

arrangements. This typically involves opting for concise storytelling durations, characterized by 

suspenseful plot developments engineered to maintain the viewers’ undivided attention. 

The distinctive viewing conditions and the mindset of the audience in streaming movies diverge from 

those of traditional movies, thereby giving rise to differential psychological rhythms in the editing 

process. The physical constraints prevalent in the traditional cinematic milieu curtail viewers’ ability to 

interrupt or regulate the pace of their viewing. Moviemakers can therefore design the overall editing 

rhythm, using the duration of a movie as a fundamental unit for shaping the cinematic experience. In 

contrast, the online streaming viewing context empowers the audience with a considerably higher 

degree of freedom, enabling them to halt viewing at any juncture and frequently prone to distraction. 

Consequently, the requirements imposed on streaming movies necessitate a concerted effort to 

consistently capture and maintain viewer “engagement”, an imperative aimed at sustaining a vigilant 

and absorbed audience. 

 

4. Industry Characteristics and Fundamental Advantages of Streaming Movies 

Streaming movies has not merely revolutionized the dissemination methods and artistic techniques of 

traditional cinematic movies; it has significantly reshaped the movie industry’s business model and 

operational procedures. The intrinsic nature of Streaming movies embodies a revenue model hinged on 

the effective clicks of paying users, leading to a profit-sharing arrangement between distribution and 

production entities. This model is exemplified by prominent video platforms like iQiyi, Youku, Tencent, 

and others. In parallel, an alternate approach involves the provision of subscription-based services, with 

platforms such as Netflix deriving profits from membership fees. A distinguishing feature of traditional 

cinematic movies is that the pivotal roles of distribution and screening are predominantly assumed by 

online video platforms. 

 

 



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4.1 Industry traits of streaming movies  

Contrasting with the industrial model of traditional cinematic movies, using Netflix as a prime 

illustration, the industry model of streaming movies exhibits several noteworthy characteristics: 

4.1.1 Click-through Rate: A dual-circulation industry model  

In the realm of streaming movie creation, as compared to traditional box office revenues, the 

Click-Through Rate (CTR) and subscription memberships have emerged as pivotal revenue streams. 

However, what merits attention, CTR is not a perfect proxy for movie quality. For instance, a 

poorly-reviewed streaming movie might still achieve a substantial CTR. Diverging from the one-to-one 

correlation between the box office and the number of viewers seen in traditional cinema, CTR 

possesses the ability to generate multiple repeated clicks. 

The distinctive attributes of online platforms afford streaming movies a unique space for survival. The 

sustained nature of CTR in streaming movies surpasses the limitations imposed by traditional box 

office metrics, thus opening novel avenues within the movie industry. Artistic movies of high quality, 

albeit catering to a niche audience, find an extended life cycle on internet platforms and amplify their 

visibility.  

Furthermore, the interactivity facilitated by online platforms has transformed the movie evaluation 

landscape from being solely channeled through official platforms to a broader array of movie 

enthusiasts. Each viewer can articulate their viewpoints on movies, giving rise to an ecosystem of 

audience word-of-mouth effects. Streaming movies can further establish a distinctive dual-circulation 

industry model, wherein a search for a specific star’s works, for instance, may lead to related movies, 

and an exploration of a particular movie genre may unveil other relevant movies. Such a mode 

perpetuates the cycle of information and augments the CTR. Movies within this dual-circulation 

paradigm can be viewed multiple times, signifying a departure from the linear constraints of the 

traditional movie industry model. 

4.1.2 Screening: Disruption of the “theatrical window” 

The concept of the “theatrical window”, originating from Hollywood, represents a distribution strategy 

designed to safeguard box office revenues for movies. Traditionally, movies are initially released in 

cinemas, followed by subsequent showings on platforms like videotapes, DVDs, cable television, and 

pay-per-view after the movie concludes its theatrical run. However, with Netflix acquiring extensive 

distribution rights to a plethora of movies and TV shows, the platform has gained substantial control 

over international release strategies. Consequently, Netflix often sidesteps the conventional theatrical 

window, and frequently opts to premiere them exclusively on its own streaming platform to entice a 

broader subscriber base, rather than debut movies in cinemas.  

The traditional cinema industry expresses a desire for Netflix to align with the established theatrical 

window, yet Netflix’s position remains steadfast: its primary goal is to attract a robust user base to its 



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streaming platform, as subscription fees form a significant portion of its revenue stream. In recent years, 

the U.S. theatrical window has undergone a gradual contraction. A pivotal industry conference between 

U.S. theaters and cinema chains in April 2017 in Las Vegas introduced a novel model, permitting 

movies to appear on video-on-demand platforms within a 17 to 45-day timeframe following their initial 

premiere. Users are required to pay a single-viewing fee ranging from $30 to $50, with cinemas 

receiving a share of this fee. Owing to this mode, the tensions between Netflix and traditional cinemas 

have seen gradual alleviation. A case in point is Marriage Story, one of Netflix’s original movies, 

premiered on its streaming platform a month after the theatrical window. 

4.1.3 Vertical integration: Direct path from content production to consumption 

Netflix, originating as a streaming platform, has evolved into a comprehensive industry player, shifting 

towards original content creation and securing distribution rights at prominent movie festivals. This 

evolution has enabled Netflix to achieve full vertical integration, encompassing the entire industry 

value chain. Nearly all of its original content is exclusively showcased on its proprietary streaming 

platform, negating the necessity for external distribution agreements. Consequently, other distributors 

and exhibitors have not suffered due to any vertical monopoly bundling practices, as Netflix’s vertical 

integration has already been executed directly in a manner that preserves the interests of the broader 

industry. 

Vertical integration has provided Netflix with a direct route from content creation to audience 

consumption. In the traditional cinema landscape, movies typically traverse various intermediary 

channels, such as cinemas, DVDs, and television networks, before reaching the end viewers. 

Conversely, Netflix’s “self-produced and self-distributed” model empowers it to engage directly with 

audiences via its internet-based platform. This direct connection with consumers circumvents 

intermediary bottlenecks, allowing Netflix to derive profitability from worldwide subscription revenues 

while concurrently sustaining the consistent delivery of high-quality content. 

4.1.4 Profit Model: Disrupting traditional revenue sharing 

In contrast to the revenue-sharing modes of traditional cinematic movies, streaming movies have 

introduced a paradigm shift. Instead of adhering to the conventional model, a multifaceted approach 

has emerged, encompassing elements such as minimum guaranteed rights fees, user acquisition revenue 

sharing, viewing revenue sharing, and ad revenue sharing. This versatile revenue-sharing framework is 

projected to gain prominence within a specific timeframe, and it’s noteworthy that major streaming 

video platforms adopt distinct revenue-sharing mechanisms. 

Illustratively, consider the case of Netflix. The platform’s primary revenue source does not hinge on 

advertising. Rather, it achieves profitability through the provision of subscription-based services, 

offering streaming access to a diverse range of movies, television series, and documentaries. Following 

several iterations, Netflix’s current subscription pricing structure is tiered based on device availability 



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and video quality, comprising three plans: $7.99/month, $9.99/month, and $11.99/month respectively. 

The bulk of Netflix’s revenue, approximately 98%, emanates from subscription fees.5 

This profit model underscores Netflix’s relentless commitment to consistently delivering high-quality 

content. The allure of exclusive and superior content is pivotal in expanding its global subscriber base, 

thereby yielding augmented returns. The accrued profits are subsequently reinvested into content 

creation, fostering an ongoing cycle of user subscription growth, thus culminating in the establishment 

of a virtuous industry cycle. 

4.2. The Industrial advantages of streaming movies 

When juxtaposed with conventional cinematic movies, the streaming movie industry boasts a distinct 

value chain, manifesting potent industry advantages in several critical facets: the audience market, 

production, and distribution. 

4.2.1 Advantages in the production process 

Compared with the traditional cinematic industrial chain, the production process in the steaming movie 

sector exhibits distinct advantages in terms of flexibility and cost-effectiveness. Leveraging the 

inherent interactivity of online platforms, steaming movies engage in proactive interaction with the 

audience right from the inception of their creation. This real-time exchange of feedback allows 

moviemakers to swiftly capture market demands, ultimately maximizing market alignment. 

Furthermore, the streaming movie industry benefits from lower production costs and shorter production 

cycles, thereby creating the potential for higher profits. Streaming movies shed the burden of relying 

solely on box office revenue, affording creators the freedom to experiment with diverse genres and 

styles. The flexibility in duration also significantly broadens creative horizons. From this vantage point, 

streaming movies provide a more conducive environment for artistic creation, enabling the realization 

of themes and techniques that are less prevalent in the relatively conservative realm of traditional 

cinema. This openness also facilitates alignment with the requirements of advertisers. Online video 

platforms prioritize the long-tail effect in non-linear dissemination, catering to movie types with strong 

long-term profitability potential, even if their short-term profit per unit of time may be moderate. This 

inclusiveness benefits genres like art movies and documentary movies, as they can find suitable 

audience segments online, extending the profitability timeline and unlocking greater financial support 

and profit opportunities. 

Lastly, streaming movie production possesses robust resource integration capabilities, including 

investment, creative elements, and marketing strategies. This integrated approach ultimately maximizes 

the overall impact of streaming movies, serving as a novel model that fuels the rapid development of 

the online movie industry. 

 

 



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4.2.2 Advantages in the distribution process 

Streaming movies exhibit distinctive advantages in their distribution, characterized by their freedom 

from temporal, seasonal, and geographical constraints, not to mention its notably economical 

distribution costs. Once a streaming movie is produced and released on the internet, it gains access to 

an extensive audience base, endowed with the capacity to amplify its reach. Notably, high-quality 

online movies tend to stimulate spontaneous word-of-mouth propagation among viewers on online 

platforms, with each viewer potentially assuming the role of an enthusiastic promoter. 

Concerning distribution channels, streaming movies offer a notably diverse array compared to their 

traditional cinematic counterparts. The conventional cinema industry relies heavily on box office 

returns as its primary revenue model. After the designated “theatrical window”, alternative distribution 

avenues might be considered, including television, online streaming, and DVD releases. In contrast, 

streaming movies operate on a markedly different paradigm, leveraging their unique digital 

characteristics to circumvent the linear sequence; instead, they manifest a fan-shaped trend, employing 

a variety of channels for distribution and dissemination to span the realms of the internet, mobile 

devices, and mobile TV platforms. This multifaceted approach facilitates continuous propagation, 

transcending temporal and spatial boundaries, thereby optimizing overall profitability. 

4.3 Taking Netflix as an example to analyze the impact on the traditional movie and television industry 

in the United States 

From an industrial standpoint, streaming platforms, led by Netflix, have exerted a substantial and 

far-reaching impact on the traditional movie industry, solidifying their position with formidable market 

competitiveness. 

As indicated by a report from The Motion Picture Association of America, the global movie market has 

witnessed a more robust growth trajectory in digital distribution channels in comparison to 

conventional cinematic outlets since 2015. Regarding content output, in 2018 alone, Netflix released no 

fewer than 86 original movies, surpassing the aggregate number of movies planned for release by the 

four major traditional movie companies. By 2019, streaming platforms claimed a market share of 48% 

in the global digital distribution domain, whereas the share of the traditional cinematic market 

accounted for 42%. This disparity was even more pronounced in the United States, where streaming 

platforms commanded a 56% market share in digital distribution, while the cinematic market share 

lagged at a mere 31%. The North American box office experienced a noticeable year-on-year 

contraction of 4%, further compounded by a 5% decline in the number of cinema-goers. 

Netflix, in terms of content creation, actively delves into diverse themes rooted in regional and cultural 

nuances. The platform’s ventures into international co-productions serve as a means to augment not 

only its content competitiveness but also its overarching dominance within the distribution channels, 

resulting in the global resonance of its original content themes and expressive methods.  



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In the sphere of content dissemination, Netflix collaborates extensively with prominent overseas 

operators, continually fine-tuning its content distribution and delivery capabilities to enhance the 

overall user experience on the platform. Since the initiation of its international expansion in 2010, 

Netflix has significantly accelerated its outreach to foreign markets, drawing audiences from every 

corner of the world, and leading to a robust upswing in user acquisition. 

Furthermore, beyond its digital domain, Netflix diligently engages in movie festivals as a strategic 

avenue. A notable example is the movie México '68, which clinched three Oscars, thereby signifying 

the gradual and broader acceptance of streaming movies within the mainstream U.S. movie industry. 

 

5. The Integration Path between the Development of Streaming Movies and Traditional 

Cinematic Movies 

Following the initial theatrical run of a movie in traditional cinemas, the subsequent sale of rights to 

online streaming platforms for a second round of distribution is a common practice to augment the box 

office revenue of cinematic movies. Given this, a cyclical mechanism between streaming movies and 

traditional cinematic ones, such as the advanced on-demands via streaming platforms, can be 

introduced, which would enable certain audiences to preview movies in advance, and allow production 

companies to gain real-time insights into audience reception and genuine word-of-mouth. Consequently, 

this data-driven approach can facilitate more precise scheduling and promotional strategies for diverse 

movies. Additionally, the allure of exclusive visual effects and pivotal plot elements reserved for the 

theatrical release can be retained, enticing a greater number of moviegoers to cinemas.  

Furthermore, within the traditional cinema landscape, it is crucial to address the revenue disparities and 

screening allotments faced by niche movies. The current allocation of screening opportunities, 

particularly for high-quality but low-budget art movies, is often unjust. In the context of the streaming 

media era, streaming movies have introduced a novel distribution method, especially beneficial for 

quality low-budget art movies, substantially extending their life cycle through online platforms. 

Moreover, leveraging the “viral-spreading” potential in the digital realm, online traffic can be harnessed 

for promoting offline cinematic releases, thereby benefiting both streaming and traditional cinema. 

In the traditional cinema market, there are ongoing efforts to enhance the cinematic experience, 

including the application of 3D, IMAX, ScreenX, 4DX, and innovative concepts like the “bullet 

comment theater”. Such initiatives aim to integrate the advantages of the internet medium into 

traditional cinema, strengthening the experiential attributes of movie-going. As media convergence and 

technological advancements continue, the experiential gap between cinema viewing and non-cinema 

viewing is progressively narrowing from the audience’s perspective. 

 

 



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6. Conclusion 

As the Internet and streaming video platforms continue to evolve, streaming cinema has forged its 

distinct dissemination methodology and viewing dynamics. The paradigm of movie consumption has 

shifted from passive aesthetic appreciation to active engagement in aesthetics, while audiences have 

transitioned from mere recipients to active contributors, transforming the propagation model from 

unidirectional communication to interactive exchange. Due to the divergence between the distribution 

models of streaming and traditional cinema, there are discernible differences in the artistic 

characteristics and creative approaches of the two. Streaming movies places greater emphasis on 

diversified thematic content and the narrative's “appeal”. Notably, in the realm of industry, exemplified 

by the Netflix platform, it has disrupted the conventional concept of the “theatrical window”, 

overturning the traditional revenue-sharing model. The platform’s ability to reach audiences directly 

from content production highlights a departure from the conventional distribution model, inflicting 

significant repercussions within the traditional American movie industry. Driven by technological 

advancements, in the era of media convergence, streaming movies are embracing interactivity and 

venturing into the realm of Virtual Reality (VR). This trend unveils a multitude of new possibilities for 

movie viewing experiences. 

The traditional movie industry and the steaming movie sector coexist in a dynamic interplay of 

competition and collaboration. The exploration and harmonization of the convergence of media within 

the movie dissemination process are essential to facilitate the transformation of movie propagation 

toward diversified modes. This strategic approach constitutes the genuine path toward mutual 

prosperity between streaming movies and traditional cinematic movies. 

 

References 

Haibo, L. (2020). Data-Driven Content Sorting Platform: Development Strategies of Film and 

Television New Media Platforms under the Threshold of Big Data. Journal of Film Literature. 

Lei, D., & Dachuan, X. (2018). The Composition and Characteristic Presentation of Online Movie 

Industry. Journal of Film Literature. 

Na, G. (2021). Status and characteristics of international audiovisual media convergence development. 

Journal of Radio and TV. 

Ruiqing, M. (2020). The Rise and Impact of Streaming Platforms and Non-Theatrical Films in the 

United States. Journal of Film Art. 

Yu, C. (2009). China Online Movie Research. Paper presented at the Forum on Sixty Years of New 

Chinese Cinema. 


