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Google Just Bought Into the Pipeline Netflix Can't Build
While Netflix spends $20 billion defending a passive viewing model, Google is quietly positioning itself across every stage of the emerging creator-to-theatrical pipeline—except the one Netflix owns.
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This morning The Wall Street Journal reported that Google is “putting around $75 million” into A24, the independent movie studio. Google’s DeepMind AI unit will work with A24 “to create new tools for movie production and distribution.”
A24 partner and A24 Labs leader Scott Belsky (the former Chief Product Officer of Adobe) told The Wall Street Journal that the objective is “better uses [of AI] that preserve creative control and support risk-taking.” He added that the new tools “won’t look anything like the prompted generation type of AI that people feel uncomfortable with.”
But the most notable detail for our purposes is this sentence: “Their multiyear, nonexclusive deal doesn’t give Google access to A24’s data, including its film and television library.” Instead, it is a bet that the studio’s roster of artists and auteurs will gravitate towards the tools.
A24 is known more for “arthouse gems” than blockbuster IP—so this detail makes sense. Also, A24’s recent success with YouTube creator Kane Parsons’ horror movie “Backrooms”—which just had the biggest opening in A24 history at $81.4 million on a $10 million budget—is also on the vanguard of “Internet Collaborative IP“. It understands that a next generation of storytelling is emerging from creators working with their audiences to build and improve stories.
The article reads like Google making a conservative bet on something Runway CEO Cristóbal Valenzuela recently described as a “Cambrian explosion of creativity, weirdness, new media, and new forms of expression and art” that is “just around the corner.” However, when viewed through the lens of “Internet Collaborative IP”, the deal establishes Google in this emerging marketplace for both generative AI and Hollywood: Google’s YouTube is a core engine of ideation, community and distribution of “Internet Collaborative IP” before a studio acquires the IP; and DeepMind now has tools within the studio’s pre-production side and the production processes.
With A24, Google is building the early stages of a seamless path from YouTube to theatrical distribution for content created by YouTubers like Parsons, Curry Barker (“Obsession”) and Markiplier (“Iron Lung”) and generative AI creators. That pipeline effectively looks like:
Creator → YouTube → Community → IP → Studio → Production Tools → Theatrical → Paid Downloads (YouTube) and/or Subscription Streaming (Netflix)
In this model, Google has a role in everything but the last two stages—and the real “meat” lies in the first three stages.¹ It is worth noting it enables paid downloads of YouTubers’ movies in post-theatrical windows instead of subscription streaming.
Looking at this chain, we can immediately see the problem for both traditional streamers and Netflix: Together, Google and A24 will capture more value across the chain. Netflix and other streamers who buy A24 movies and TV shows will be left waiting for the “scraps” of streaming distribution.
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Past essays related to today’s analysis:
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