Netflix Clearly Remains Movie Theater Curious
Drew Taylor and Sharon Waxman
Well would you look at that... despite Netflix losing out on the deal to buy Warner Bros, it seems like they're still interested in the box office business...
Ted Sarandos might be changing his tune when it comes to theatrical exhibition.
The Netflix co-CEO came to Las Vegas on Sunday night and met with several heads of exhibition, including AMC Theatres CEO Adam Aron, Regal CEO Eduardo Acuna and Cinemark CEO Sean Gamble, talking over the possibility of putting more Netflix films into theaters, according to two individuals with knowledge of the meeting. He’s “dipping his toe in the water,” one individual said.
My guess remains that he's doing more than that. Of course, I've been guessing that for a while now. Long before the surprise Warner Bros offer, I wrote an entire post in October 2024 predicting that Netflix's next change in stance (following ads and sports) would be around starting to truly leverage movie theaters. Yes, they had "dipped their toes" here and there, but largely for awards qualification reasons. My bet was that they would fully embrace the theaters.
Well, maybe not fully, but only because it doesn't actually make sense in our current age to "fully" go all-in on theatrical. If a movie is going to bomb, what's the point? And Netflix makes a lot of movies that would bomb at the box office (but do quite well on Netflix). It would be a more hybrid approach, leveraging the theatrical window where it made sense. Which is also what all movie studios should be doing, obviously.
Anyway, my prediction looked great when Netflix announced the Warner Bros deal and Sarandos immediately changed his (quite loud and divisive) tune on theatrical. Netflix was going to keep the distribution system fully in tact for Warner's movies – note he specifically did not say all of Netflix movies, because again, that would be silly. But the implication was that because Netflix was buying this new "muscle" for how to do theatrical, the company would be leveraging it.
I mean, sure, on some level, what else was he going to say? Hollywood already hated the notion of Big Bad Tech swooping in to take out a historic studio – even though relative to the other giant companies that have bought studios throughout the years, Netflix looked like a relatively great buyer! – and Sarandos had to sell it. So he was telling anyone and everyone that he was all about theatrical now – even doing so under oath!
Still, I believed him! Perhaps because I was biased by my prediction, but I only made the prediction because it makes sense! Netflix absolutely should be leveraging theatrical more than they have to date. They clearly left a ton of money on the table with the Knives Out franchise. And Warner deal aside, I think the "stunts" like KPop Demon Hunters and releasing the finale of Stranger Things in theaters showcased this potential to Sarandos and team.
To the point where I kept saying that I would bet that Netflix continues down the theatrical path even if they don't get the Warner Bros deal. And well, here we are!
Further, the fact that now both Apple and Amazon – Netflix's tech brethren – have had big theatrical hits in the form of F1 (which, to be clear, likely didn't even break even at the box office, but that's only because of Apple pulling out all the stops, marketing and cost-wise, to make sure the film was a success – perhaps tied to their eventual takeover of the actual F1 sport broadcast rights) and now Project Hail Mary (which will end up a legitimately huge hit for Amazon MGM). For the right project, Netflix can also earn hundreds of millions at the box office, if not billions for their biggest hits, obviously. Why leave that money on the table?
Well...
In his meetings, he told the exhibitors that he is thinking about changing Netflix’s policy on theatrical, but that “the problem is it hurts the platform,” citing what he said were lackluster results for Apple or Amazon releases after a theatrical run, according to one of the knowledgeable individuals.
To which the theatrical side apparently noted that F1 has had an "incredibly successful" run on streaming. And one presumes Project Hail Mary may have an even bigger one given the relative size of Prime Video to Apple TV...
But even putting Project Hail Mary aside, Amazon has been able to leverage streaming to salvage clunkers that they put in theaters. And, you could certainly argue, that some such movies have done well on streaming because they were in theaters. Good or bad reviews aside, it gives them an aura that draws people in on the streaming services. Unlike Project Hail Mary, this is not rocket science.
Netflix has a huge slate for the rest of the year, including but not limited to the Russo Brothers-produced thriller “The Empty Man,” the animated fairy tale “Steps,” the David Fincher-directed, Quentin Tarantino-scripted follow-up to “Once Upon a Time in Hollywood,” animation legend Brad Bird’s “Ray Gunn” and Greta Gerwig’s big budget fantasy “Narnia.”
“Narnia” has already secured a limited IMAX engagement on Thanksgiving — a first-of-its-kind release for Netflix — before streaming on the platform at Christmas. But if Netflix changes its strategy and goes wider with “Narnia,” it could go toe-to-toe with all of the big holiday movies this year, like Marvel Studios’ “Avengers: Doomsday” and Sony’s “Jumanji 3.”
Yeah, Narnia will obviously be a big hit, and Greta Gerwig was clever in her "hacking" of the Netflix (and theatrical) system by doing the IMAX deal. And while Wuthering Heights hasn't been a massive hit at the box office, you can still certainly argue that Netflix should have done that to keep stars like Gerwig's Barbie collaborator, Margot Robbie, happy – and, with hindsight, all of Hollywood.
Anyway, just from a pure box office perspective, it makes sense for Netflix to do more theatrical – if they can do it more their way. Again, not every movie, and not the massive windows that studios are suddenly backing into again. It's a business, all of these companies should do what makes business sense. That's some level of theatrical for certain types of movies, but that's not something theater owners and their lobbys are going to want to hear!
So Sarandos and Netflix will have to figure out a way to outsmart them to get what they want out of the business. And they have a long history of doing just that. But step one is definitely showing up to Cinemacon even after you lost out on a deal to buy a studio. Who knows, Netflix may end up owning some such assets yet. And if not, they're going to be putting more of their content in theaters.
Don't be shocked if they start to dominate that business too...
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler