Netflix’s recent plan to acquire Warner Bros. for $82.7 million has rattled theater operators. Long seen as a rival, Netflix’s move could change the film landscape, impacting cinemas struggling to bounce back post-pandemic.
Stacey Spikes, co-founder of MoviePass, summed it up: “The world just shifted on its axis.” Cinema owners fear losing Warner Bros.’ 12 to 14 annual releases that are vital for their business. Chris Randleman, a top executive at Flix Brewhouse, voiced concerns, hoping the deal won’t go through. He believes Hollywood talent should oppose it, saying, “All the IP in the world isn’t going to matter without filmmakers and stars.”
Netflix’s leadership insists it will respect Warner Bros.’ theatrical commitments. Ted Sarandos, Netflix’s co-CEO, mentioned that the approach to movies wouldn’t change, but he hinted at evolving film release windows. “Windows will evolve to be more consumer-friendly,” he noted. This left many worried about what “evolve” means. One notable director interpreted it as reducing theater time, raising the question: why release a film in theaters at all if it’s only there for a short time?
Since the pandemic, studios have been releasing films for shorter exclusive theater runs. Before, films stayed in theaters for about 90 days; now, some are available for streaming in just a few weeks. Eduardo Acuna, CEO of Regal Entertainment, warned that shortening these windows could lead to lower revenues, potentially causing theater closures and job losses.
Despite the gloom, some see potential benefits. Tim Richards, CEO of Vue Entertainment, believes Netflix will realize the value in longer theatrical runs once they start releasing major hits. “It could be a big win for us,” he said.
Warner Bros. has been a powerhouse this year, releasing major hits like “Sinners” and “A Minecraft Movie.” Acuna remarked, “Warner Bros. had seven movies open to over $40 million this year. That’s impressive.”
Currently, Netflix has released 30 films in theaters, but many of these are limited releases aimed at Oscar qualifications and don’t perform at the level of blockbuster films. Exhibitors appreciate that Netflix typically takes a smaller cut of ticket sales, around 35%, compared to traditional studios which take more.
Interestingly, some cinema operators hope that Netflix’s debt from acquiring Warner Bros. will push them to seek new revenue avenues. Randleman stated his mixed feelings: “I hate this, and I want it not to happen — but I’m not in full freakout mode.”
As the industry evolves, it highlights the ongoing negotiation between streaming giants and theaters. Observers are closely watching how this potential acquisition might reshape what we see on the big screen and how films are released in the years to come.
For more information on the impact of streaming on traditional cinema, check out this report from the Motion Picture Association.
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