Maybe they sold the movie to Netflix... That way the production company makes money and Netflix gets an anticipated movie exclusively on it's platform... I don't follow these things, so don't know what actual deals have been struck with this one..

The way I've heard it explained is that Paramount eliminated all risks for themselves. They have received a certain amount of money so that they no longer have to worry about the potential that this would have been box office flop. I'm sure that the negotiated selling price included some profit for Paramount, and as an added bonus, they didn't have to waste any money in marketing a movie that they weren't releasing.

Now the risk is all on Netflix. Netflix incurred a marketing cost by running an ad during the Super Bowl. They probably also have the option of releasing the movie on home video at some point in the future and keeping any profits from disc sales for themselves.

It is on Netflix to decide if this purchase was worth the cost... Did the marketing strategy increase brand awareness? Were they able to add any new subscribers? Did current subscribers care that this title was added to their content portfolio?

I just think distribution models are changing. I get what you are saying though...how to do they--or Netflix now--make any money on this. Of course, that's like saying "how does Netflix make money on anything they produce." The answer, it seems is in their current (and future) subscriber base. We all think $10.99/month is a great value for unlimited entertainment at our convenience, but I just realized, it's far more than I ever spent on movie theaters (I'd only see a 'new release' about 1-2 times per year), and then rent (or now stream) films after that.

The fact that the future is almost exclusively in streaming is evidenced by each producer (Disney, etc) wanting to create their own streaming platform and the proof-of-concept has been Netflix and Amazon (and to a lesser extent IMO, Hulu). For example, Netflix was on track to exceed $11B in 2017...that covers a lot of production costs. :)

Paramount was looking to unload a few of their films, this one in particular because of its cost in relation to the other Cloverfield films, which is about 20 million dollars more. So they were able to unload it at a good price and Netflix got a movie that many were excited to see and i'm sure when the numbers are released, we will find that this was one of their most watched films. So it's a win win

I'm trying to go for an entertaining, informative youtube channel so, if you have the time, take a look. Hope you enjoy what you see and if you have any thoughts or criticisms, i'd love to hear them. Thanks in advance. Review right here- https://youtu.be/hJYnJuDPdn0

I guess Paramount answered my question today (The Wrap Article)

Read the article just released as of this writing. Most of you called it.

@jorgito2001 said:

I guess Paramount answered my question today (The Wrap Article)

Read the article just released as of this writing. Most of you called it.

Netflix: Hollywood's dumping ground for crappy movies.

Considering that it's only really morons who go to the theatre these days to watch something with either "lots of 'splosions" or "that actor what everybody talks about" then there is no point releasing your movie unless it fits one of those groups. And Cloverfield Paradox is neither directed by master of the big chair Michael Bay nor features all-round acting megastar Mark Wahlberg, you would lose money if you sent this to theatres.

After decades of progress we seem to have regressed back to the 1980's where every multiplex will be showing Rambo but if you're lucky there will be a little art-house somewhere within 100 miles showing all the movies that don't feature Sylvester Stallone.

@AlienFanatic said:

Netflix: Hollywood's dumping ground for crappy movies.

Kinda. But, to be fair, Netflix is also where pretty good movies that might not otherwise get big screen theatre distribution have a chance to be discovered, as I discuss here in this TMDb thread.

At any rate, with respect to the OP's question, it's about understanding that the subscription model is no longer novel, and is changing the movie distribution model, as it did for music, and cellphones, and cars, and...and...