There is no doubt the biggest disruptor in cinema over the last few years has been the company known as Netflix.  The Silicon Valley startup that had the novel idea of renting out movies through the mail from an online platform has since grown into a megalithic player in Hollywood itself, literally re-shaping the way that business is conducted within the movie industry.  It has also been one of the causes for a lot of destruction of the old standards of production and distribution.  The first casualty of Netflix’s rise was the video rental industry.  Blockbuster Video, which had itself leveled the competition to leave themselves in a position where they were the only video rental option in most markets, fell very quickly in response to Netflix’s easier to use service.  By the time Netflix was moving away from it’s mail service model to a streaming model, making on demand entertainment even more convenient, Blockbuster went from being a national brand to a ghost of it’s former self, now only open in a single location in Bend, Oregon.  The shift to streaming has also led to a significant decline in physical media in general, with most big box stores no longer featuring a movie aisle as most physical copies are now sold exclusively online.  Studios that once made a mint on selling their legacy titles on physical media have instead decided to play in the same field as Netflix, and launch their own streaming platforms instead.  There really is no other company that has changed the culture in the movie industry as much as Netflix has, and after leveling past juggernaut industries like that of home entertainment and video rental, they seemed poised to put another prominent column of Hollywood out to pasture as well; the movie theater industry.  However, this next step has taken some unexpected twists and turns that in some ways has put pressure on Netflix to rethink it’s whole business model.  Is it better for them to seek to destroy the theatrical model of distribution, or is there a better option for them in actually working with movie theaters?

One thing that has surprisingly emerged in the last couple of years in the wake of the streaming wars is that movies that released in theaters first actually perform better on streaming than the movies that were put out as streaming exclusives.  This has been the case with the studio run services like Disney+, Max, and Paramount+.  One noteworthy example is Disney’s Moana (2016), a film released in theaters 8 years ago, years before there was a Disney+, and even after all this time it is still ranked high on the all-time watched list for every streaming platform.  More recent films like The Super Mario Bros. Movie (2023) and Barbie (2023) have also given their streaming platforms a boost after their initial theatrical runs, which by the way both netted over a billion dollars each.  Which is to show that releasing the movies first in theaters does not decrease their viewership numbers once they are released on streaming after.  If anything, it shows that movies have resiliency.  Of course, I’m citing examples of movies that were universally beloved by audiences, and their repeat watching value certainly translated into viewership on streaming.  But, it’s also a sign that a theatrical roll out doesn’t hurt either.  In fact it is more beneficial in the long run for a movie to premiere on the big screen first because of the patterns of viewership that help to spotlight any certain film.  When a movie is in theaters, the choice is limited to the availability of screens, so the customer is making a very active choice in what movie they are going to see.  Whether the experience is good or bad, the movie goer still had a clear idea of what experience they were paying for.  Movies on streaming on the other hand don’t benefit from that factor of audience interest.  They are algorithmically spotlighted on a platform that customers usually spend scrolling through hundreds of titles in order to find something to watch.  At a cost between $10-20 a month, streaming gives it’s customers and abundance of options, but very few quick choices.  And naturally, the movies that people saw on a movie screen will be the ones that they actively seek first, while straight to streaming will tend to be buried.

This has become a contentious thing between Netflix and the movie industry now.  For years, Netflix has been spending billions on expanding their library of movies and TV shows, which was something they had to do out of necessity after studios like Disney and Universal began to remove their films and shows from the platform in order to consolidate for their own platforms.  And as part of this expansion of their in-house production, they also were trying to build their brand as a prestige name in the industry.  They did this by getting big name talent like Martin Scorsese, the Coen Brothers, David Fincher, and Alfonso Cuaron to bring their next projects to their studio.  Netflix developed this reputation for being generous to filmmakers with movie ideas that probably were not going to work in the Hollywood business model as it was.  This attracted a lot of talent to Netflix and away from the other studios, who were starting to fret about the pull that Netflix was having in the industry.  And for a good while, it was working.  Netflix went from being an online streaming platform featuring films from all studios to a major studio within itself.  They were buying up real estate across Hollywood, including the legendary Sunset Bronson studio lot that was once home to both Warner Brothers during it’s early years.  They were beginning to frequently appear at awards ceremonies  including the Oscars and even racked up a fair amount of gold along the way.  But, the streaming market has definitely changed with all the other studios now running their own platforms.  And while Netflix still dominates as the streaming champion, their status as the ideal place for filmmakers to go has somewhat diminished.  Before, Netflix could persuade filmmakers to come to their offices with the appeal of getting their dream projects made, sparing no expense.  But now, the legacy studios of Hollywood are beginning to lure the filmmakers back with a different appeal that seems to be more ideal to them nowadays; that they can get their movie seen on the big screen.

One has to thing that filmmakers are making a calculated risk between these two options now.  One, they go to Netflix and get their strange, unconventional movie made without restrictions but also see it play exclusively on streaming and potentially be buried in the algorithm.  Or, they go to the studios and potentially face numerous obstacles from executive meddling, but eventually they’ll see their work play in front of an audience on the big screen.  But, there are those filmmakers who very much desire to have their movies screened for a wide audience and that’s becoming a more and more desirable option to some.  Box office is a very tangible measure of a film’s success, so it’s a great way to gauge if your movie managed to succeed or not.  On streaming, your movie becomes one of numerous titles listed simply as thumbnails on a smaller screen.  Most streaming platforms don’t even publicly state their internal numbers, so the measure of success is somewhat a mystery.  And there are just a lot of filmmakers out there who are still succeeding without even thinking twice about choosing to go theatrical first.  Christopher Nolan for example clashed with his previous home studio (Warner Brothers) after they were about to push his film Tenet (2020) to streaming during the pandemic against his wishes of waiting for theaters to re-open.  He jumped ship, went to Universal who gave him an assurance of a theatrical first release, and he made Oppenheimer (2023) to resounding box office and awards season success.  Tom Cruise likewise convinced his studio Paramount to sit on Top Gun: Maverick (2022) until the theatrical market recovered, and it payed off extremely well.  So, what filmmakers are seeing is that there is an added benefit to getting the movie seen in theaters to lots of people, because it gives their film an added spotlight that can be tangibly felt.  That’s why a lot more filmmakers are starting to demand a bit more on their distribution front, and ensuring that their film is not just made, but also viewed.

One of the biggest challenges recently to Netflix’s streaming first policy is a recent push by filmmaker Greta Gerwig to get her next film project set up at Netflix released on more screens nationwide.  After her success with Barbie, Greta inked a massive deal with Netflix to launch a brand new take of the Narnia books from C.S. Lewis into a major film franchise.  Clearly, Netflix sees this as a major potential win for them, but Greta Gerwig believes (rightly I’d say) that such a franchise can’t just thrive on streaming alone.  Narnia is a major title to produce, akin to The Lord of the Rings in scale and scope, which is what prompted Disney and Fox’s short lived run with the book series.  They are movies that demand a big screen treatment, and that’s why she’s putting pressure on Netflix to consider a wider release.  It’s not something new for Netflix to go wide with one of their films.  As part of their contract with director Rian Johnson, Netflix did agree to release the first of his two Knives Out sequels, Glass Onion (2022), in a wide theatrical release before it was put on streaming.  However, they limited the amount of time it played in theaters, and the film was gone after only two weeks.  This clearly limited the amount of box office it was going to take, and by all accounts, Glass Onion did pretty well in it’s short run.  Who knows how much money Netflix left on the table by pulling it after such a brief run.  Perhaps the Netflix accountants think that box office is miniscule compared to the $15 a month they currently get from their hundreds of millions of subscribers, but any box office is is helpful to the bottom  line, especially when it can off set production and marketing costs.  For Greta Gerwig, she actually has a powerful ally in her camp; the IMAX Corporation, who are interested in getting Ms. Gerwig’s Narnia films on their screens.  IMAX has a lot of pull in the industry, and have proven to be a big driver of box office for films because of the premium ticket price.  Greta clearly wants to get her movie seen properly on a bigger screen than just having it streamed on a platform; but at the same time, she is working with Netflix’s money, who ultimately have the final say.

Netflix has been defiant, but the other streamers have reconsidering their plans to put a bunch of their movies exclusively on streaming.  Paramount made a last minute choice to take their musical re-make of Mean Girls (2024) and put it into theaters in advance of it’s premiere on Paramount+.  The choice proved fruitful as the movie grossed over $90 million at the box office, making it a hit for the struggling studio that they otherwise wouldn’t have had if it went straight to streaming.  There is also an example of movie studios that were planning on making multi-part mini-series for streaming all of a sudden restructuring them into feature films for theaters.  Disney’s upcoming Moana 2 (2024) was one of those streaming series projects that got re-worked and now it’s being projected to be a box office winner for Disney Animation, which is really in need of one. But perhaps the biggest example of a shift back to the theatrical model that payed off big for a studio was Warner Brothers decision to take Tim Burton’s long anticipated sequel, Beetlejuice Beetlejuice (2024) and put it into theaters after initially greenlighting it as a streaming exclusive.  To date, Beetlejuice Beetlejuice has grossed nearly $300 million domestic and over half a billion worldwide.  Had they gone the streaming route, Warner Brothers would have missed out on a net profit of over $100 million on this film, which they definitely need after the box office flops of Furiosa (2024) and Joker: Folie a Deux.  But there are other examples of some studios doing the reverse.  After a string of box office disappointments like Napoleon (2023) and Argylle (2024), Apple Studios has opted to pull back from theatrical and release more of their films straight to streaming, like they did to the recent film Wolfs (2024) starring George Clooney and Brad Pitt.  That film was planned for theaters, with trailers already running in most markets, and in the eleventh hour the movie was shifted to streaming instead.  While there’s this case to prove a bit of the point to Netflix’s argument, the trend of movies going from streaming to theatrical is growing bigger.

In many ways, it comes down to what type of movie gets either the theatrical or streaming treatment.  The movies that seem to get the lowest bit of interest are the ones that studios feel safer putting out in streaming, meanwhile the safer bets and higher profile projects get the theatrical market.  But with Netflix, they seem content on going all in on streaming; at least up to now.  They only used limited theatrical releases to put their movie out for awards contention, since they still have to play by the Academy’s rules in this regard.  But still, that limits the visibility of their in theaters to just a handful of theaters, namely in Los Angeles and New York, where Academy voters mostly live.  Movies play differently on living room entertainment systems compared to the movie theater experience.  If Netflix wants their prestige movies to gain any traction in awards season, make it so that they have the highest profile in the grandest presentation possible.  When Netflix was starting to disrupt the industry in the 2010’s by investing in Oscar caliber campaigns, they certainly had the kinds of movies to back that claim up.  In some cases, their movies were garnering the most nominations in any year, led by movies like Roma (2018), The Irishman (2019) and The Power of the Dog (2021).  This last Oscars, they had only one nominated film, Bradley Cooper’s Maestro (2023), and it went home empty handed.  Couple this with the fact that straight to streaming films have garnered the reputation of being the new direct-to-video moniker of poor quality, and you can see that Netflix’s brand has somewhat diminished.  All of the Oscar worthy stuff they put out is now being drowned out by the deluge of bad films that get dumped onto their platform, whether made by them or licensed by another studio.   It may now be worth it for Netflix to clean up it’s reputation by putting their name out their more in a theatrical arena, showing that they can be competitive with the legacy studios in Hollywood.

Netflix should not be adversarial with the theatrical market.  It’s a resilient mode of distribution that Netflix has been unable to conquer in the same way it has so many other industries.  Even still, movie theaters are not fully recovered yet from the blow dealt to them by the pandemic.  The problem isn’t so much that people prefer to watch movies at home than go out to a theater.  We’ve discovered in the last couple years that there is indeed a reliable base of customers that will definitely make time to watch movies in theaters.  The issue today is that the movie industry is just not making enough movies in order to fill the demand of the theatrical market, and this is where Netflix could be a lot of help.  Not every movie they make is necessarily worthy of the big screen treatment, but there are a few that absolutely would benefit from a wide release in theaters.  Most people forget that Eddie Murphy made a new Beverly Hills Cop sequel this year exclusive for Netflix, because it never got a theatrical release.  Seeing how much a legacy sequel made so many years later ended up lighting up the box office this fall with Beetlejuice Beetlejuice, perhaps Murphy and Netflix realized they missed out on a gold opportunity this year to bank on the nostalgia driving their movie.  Will Netflix make the change?  It’s hard to say.  In many ways, the streaming market is changing once again to something that favors a symbiotic relationship with the theatrical model and not one in opposition to it.  There are added pressures now for Netflix to reconsider their position, including more demands from filmmakers and more competition from other streamers that are benefiting from the theatrical to streaming mode of release.  Given that Netflix has more to gain than lose by just doing more in the theatrical market, it should be an easy choice.  There seems to be signs that some at Netflix value the theatrical experience; they did help save the legendary Grauman’s Egyptian Theater in Hollywood after all.  Netflix needs to shake off the reputation they have as just a content mill, and actually show that they mean business as a new major Hollywood studio by showcasing what they can do on the biggest scale possible by getting their movies out on the silver screen.  They’ll still remain a top dog in streaming for years to come if people get interested in all their movies again, and not just the ones that the algorithm pushes to the top.    For many, nothing beats the theater experience, so for Netflix’s sake if you can’t beat it, join it.