Netflix co-CEO Ted Sarandos repeated his new pledge to give Warner Bros. movies a 45-day theatrical window, adding that the company had debated “many times” over whether to get into the theatrical business prior to its tentative acquisition deal for the century-old Hollywood studio.
“We have often, in our Netflix history, debated building that theatrical business, but we were busy investing in other areas, and it never made our priority cut,” Sarandos told financial analysts. “But now with Warner Bros., they bring a mature, well-run theatrical business with amazing films, and we’re super excited about that addition.”
Sarandos first hinted at his new openness to a 45-day window — something that theater trade org Cinema United has called all studios to adapt — in an interview with the New York Times this past Friday. This came after Sarandos previously suggested in December that while Netflix would keep Warner films in theaters, it would look into shorter theatrical windows on the basis that they would be more “consumer friendly.”
“We will run that business largely like it is today, with 45-day windows. I’m giving you a hard number,” Sarandos told the Times. “When this deal closes, we will own a theatrical distribution engine that is phenomenal and produces billions of dollars of theatrical revenue that we don’t want to put at risk. If we’re going to be in the theatrical business, and we are, we’re competitive people — we want to win. I want to win opening weekend. I want to win box office.”
When asked during Tuesday’s call about the change in his public stance towards theatrical strategy, Sarandos said that Netflix was “not in the theatrical business when I made those observations.”
“When this deal closes, we will be in the theatrical business. And remember this, I’ve said it many times. This is a business, not religion. So conditions change and insights change, and we have a culture that will reevaluate things when they do,” he said.
But if Netflix does indeed continue Warner’s theatrical strategy, it will have to convince an exhibition industry that is deeply skeptical of such commitments. Hours after Warner Bros. selected Netflix’s acquisition bid, Cinema United released a statement staunchly opposing the deal, calling it an “unprecedented threat” to theaters.
Cinema United then repeated those warnings in a letter to a House antitrust subcommittee earlier this month, saying that any acquisition of Warner by a major competitor, whether it is Netflix or top acquisition rival Paramount Skydance, would be a danger to movie theaters.
“We must heed the lessons of the past: further industry consolidation has consistently led to fewer movies being made, and there is no reason whatsoever to believe the outcome here would be any different, particularly given Netflix’s stated views of movie theatres over the past decade-plus,” the letter read.
Two movie theater chain executives who spoke to TheWrap anonymously over the weekend cited those past views when they expressed skepticism over Sarandos’ pivot on windowing strategy, as well as past promises made by studios amidst a wave of consolidation that has gripped Hollywood.
“Disney promised they would not cut down on the number of movies Fox was putting out when they bought that studio, and then they did cut down,” said one exec. “They will say whatever they need to say to get the deal done.”
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