Theaters Would Happily Welcome Netflix Movies, And Netflix Should Seriously Think About That
The notion was put forth at CinemaCon last week. The big industry trade show took place in Las Vegas and, during a press conference, John Fithian, the CEO of the National Asssociation of Theater owners, commented on Netflix’s recent troubles. Fithian represents the interests of theater owners in the U.S. and, interestingly enough, he did not make light of things and did not take the opportunity to seem smug. Instead,he suggestedmovie theaters would welcome Netflix with open arms.
“I represent the movie theater owners but Netflix? We love those guys. [Netflix CEO] Ted Sarandos knows movies and TV better than anyone else in Hollywood. He’s crazed about his content… Our door is open for bigger, broader play of Netflix movies if that is a path they want to go down. They’re movie fans like we’re movie fans.”
This statement opens up a pretty compelling discussion about what this might mean, in practice, and whether or not it’s something Netflix should truly consider even though their business has been built almost entirely on streaming and streaming alone up to this point.
Netflix’s recent troubles
A much-needed revenue stream
What’s interesting about Netflix compared to other media companies that have gotten into the streaming game in a meaningful way largely based on Netflix’s success is that the streamer to rule them all has very little diversity in its business portfolio. Netflix is a streaming service and mostly only a streaming service. Yes, amazingly enough, they still offer a DVD by mail subscription but that is a drop in the bucket. Yes, they are alsogetting into video games, but that is in its infancy and it’s tough to say if that will prove fruitful. Disney, for example, has a robust physical media business, theme parks, product licensing, and theatrical distribution, amongst many other revenue streams. Disney+, Hulu, and ESPN+ are big parts of the equation but, in the end, Disney has other things to fall back on. Warner Bros. Discovery, ViacomCBS, and NBCUniversal are in similar boats.
We’ve seen examples of streaming and theatrical distribution working hand-in-hand over the past couple of years. “The Batman” had an exclusive 45-day theatrical window, made $760 million at the box office, then became one of thebiggest hits ever on HBO Maxin its first week on the service. The two ideas don’t have to be mutually exclusive. Theaters could get some very attractive content and, in turn, Netflix could get some much-needed revenue to offset the costs of these gigantic productions.
Kinks would need to be ironed out
The ideal version of this sounds nice on paper but, as these disparate business currently exist, some major kinks would need to be ironed out for this to all work in practice. Right now, Netflix largely reserves theatrical releases for awards qualifying runs. They are minimal for the most part and the company doesn’t even bother reporting box office figures. These exclusive windows are short, meaning that theaters don’t have a lot of motivation to prioritize the movies as viewers are more likely than not going to wait for them to be available from the comfort of home.
What would ultimately need to happen is that Netflix would need to become more flexible in that department. They would need to negotiate meaningful, exclusive windows for these movies before they arrived on the streaming service. The good news is that these windows for big movies have already been downsized quite a bit in the pandemic era. It used to be nearly three months for blockbusters and now? In most cases, 45 days is becoming the new norm at the top end. There is surely a healthy in-between there that Netflix and theater chains could negotiate.
The point is, the global box office is expected torebound in a big waythis year when compared to last year — and 2023 looks even more optimistic. Theaters aren’t going anywhere and Netflix’s recent troubles have made other media giants reconsider things in regards to theatrical distribution. Netflix would do well to not dismiss this idea out of hand. They say the definition of madness is doing the same thing and expecting a different result. Netflix should try something new and, in this case, maybe that something new is something old.
