In the wake of freaking out the industry and theater owners with its winning bid for Warner Bros on Thursday, followed by Paramount’s hostile takeover proposal this morning, Netflix co-CEOs Ted Sarandos and Greg Peters jumped on a Wall Street call again Monday to pour cold water on the fire, specifically as it relates to theatrical.
“In this transaction, we pick up three business we’re not currently in, so we have no redundancies currently,” said Sarandos. “One of them is a motion picture studio with a theatrical distribution machine.”
“We’re deeply committed to releasing those movies exactly the way they would release those movies today,” said Sarandos about staying true to the theatrical model once the streamer snaps up the 102-year-old motion picture studio.
“All three of these new businesses, we want to keep operating largely as they are,” he added, specifying that the other two are Warners’ TV production business and HBO.
“The theatrical business — we talked a lot about in the past about wanting to do it, because we’ve never been in that business. When this deal closes, we are in that business. And we’re going to do it.”
To date, Netflix has used theatrical as a means to qualify movies for the Oscars via limited releases and unreported grosses. Technically, its first wide release in north of 1,000 theaters was the late August 2-day play of KPop Demon Hunters. The movie played all circuits except for the No. 1 chain AMC and made $19 million, ranking as Netflix’s first No. 1 title at the weekend domestic box office. Note, the movie hit theaters after becoming the most watched movie ever on Netflix at 325.1 million global views.
Since Netflix won the bid for Warner Bros (which doesn’t include linear networks), Sarandos hasn’t given an exact number when it comes to days for films in an exclusive theatrical window. On Friday, he said he’d like to see the window “evolve.” Today, he changed his tune.
“If we did this deal 24 months ago, all those movies we saw this year do so well for Warner Bros would have been released in the same way in theaters. I’m talking about Minecraft, I’m talking about Superman, I’m talking about Weapons, I’m talking about Sinners,” said the executive, who cut his teeth in home video, referring to Warner Bros’ strong $4 billion-plus global grossing 2025.
“These movies will be released on Netflix through theaters the way Warner Bros did it before, but with the Warner Bros operating entity. It’s really important the way they create, and the way they drive value. We didn’t buy this company to destroy that value.”
Some studio executives Friday expressed their fear that the Netflix purchase of Warner Bros meant a death knell for theatrical and its downstream model, which generates money perpetually for any studio through library titles via various global windows. “Why not just continue to license titles at a fraction of the cost? Why buy Warner Bros?” expressed one studio exec about Netflix’s interest in Warner Bros.
There are calmer attitudes as well in Hollywood. Not everyone believes the sky is falling.
“One studio alone can’t unilaterally collapse the window,” said another motion picture exec, while one optimistic exhibition exec told us, “If Netflix wanted to really destroy theatrical, they would have bought all three circuits for $20 billion, significantly less than the cost of Warner Bros.”
Again, where everyone is wait-and-see with Sarandos is on the theatrical window. It’s not a secret he’s a proponent of 17-days versus the 45-day exclusive theatrical window championed by the top three circuits. One of the reasons why Netflix’s latest Rian Johnson-directed threequel Wake Up Dead Man: A Knives Out Mystery didn’t play AMC, Regal and Cinemark, is because Netflix refused to give the movie a 30-day window before streaming. Hence, the top three chains refused to play the movie, which has had sellouts in arthouse theaters.
On a phoner today with analysts, Paramount‘s David Ellison promised 30-plus movies annually if Paramount succeeds in its purchase of Warner Bros Discovery. Ellison also mentioned how Hollywood talent like James Cameron and Jane Fonda believe a Netflix-Warner Bros marriage “as a disaster for theatrical films.”
