NATO (THE THEATER ONE) Should Go To The Mattresses With Netflix
The National Association of Theater Owners should not play nice with Netflix, their main competitor.
There’s no doubt that Greta Gerwig’s much-anticipated adaptation of The Lion, the Witch, and the Wardrobe is exactly the type of movie that deserves to be seen on the big screen…but not when it is produced by Netflix.
Why? Well, there is no greater threat to the future of movie theaters than the streaming giant. If you are a theater owner or a studio and your opponent has used their considerable resources to outbid you and is openly looking to eat into your business, should you open your doors to them?
That’s the question facing theater owners as Netflix tries to get Greta Gerwig’s much anticipated adaptation of The Lion, The Witch, and The Wardrobe to play on movie theater screens, including the premium format ones like IMAX.
To put it bluntly - theaters would be out of their freaking minds to let this happen. There is no doubt that they should move to DEFCON 1 and set up a blockade around their screens. Netflix has done traditional studios and movie theaters dirty. Movie theaters would be fools to let the fox into the henhouse.
For some context, here are some examples of Netflix looking to shove studios and movie theaters aside.
During Thanksgiving Week 2022, Universal Pictures released Steven Spielberg’s The Fabelmans. Netflix also released the Knives Out follow-up, The Glass Onion, in theaters that same week. Now, releasing two movies during a holiday weekend isn’t necessarily antagonistic. Still, they released the movie that weekend, only had it in theaters for a week, and then bounced it until it was released on their platform a month later. Suspect, sure, but admittedly not exactly a slam dunk.
Fine, let’s look at Richard Linklater’s Hit Man which he co-wrote with Glen Powell and independently financed for somewhere between $5M and $7M. Neon founder/CEO Tom Quinn offered $10M and was confident that they could bring in at least $25M theatrically. Welp, Netflix doubled the bid and said they would give it a theatrical run before debuting on the service. They gave it an extremely limited run. It only played at the Alamo Drafthouse for two weeks here in Chicago.
Again, this wouldn’t hold up in court, but there is something there. Unsurprisingly, Netflix CEO Ted Sarandos isn’t impressed with the movie theater business saying, “we can uniquely spend $200 million on a film and have enough scale of viewership to put it directly on Netflix without trying to recover some of the economics in the theater, which I think is a fairly inefficient way to distribute some movies.”
Yes, it is not efficient for *his* business. Movie studios, however, need movie theaters to make back some of their money. Movie theaters need studios to provide them with movies to keep the lights on. For them this symbiotic relationship is very efficient. Netflix can do it all on their own1. Good for them, I guess.
Listen, I got nothing against Netflix. They do pretty good TV shows and when it comes to movies they are to streaming what cable was to television. Which is to say that it’s a perfectly good place for a studio to licenses their films to bring in some revenue.
Where Netflix excels is a) making TV shows like Bridgerton, Stranger Things, The Crown, and Nobody Wants This and b) making tons of money from being THE streaming service. A streaming service where people like to watch TV shows and movies produced by other studios.
When it comes to original films, they have struggled. Case in point even their awards contenders like last year’s Maestro didn’t really catch on. I mean, despite being an awards contender the film was the 558th most watched film on Netflix between January 2024 and June 2024.
They have made some solid plays to try and win a Best Picture at The Oscars but as of 2024 they have come up short. They haven’t given up either. They want to keep making movies and keep trying to win an Oscar. Granting Gerwig’s request for a theatrical release after her last movie, Barbie, was a critical and commercial hit makes sense.
Still, Netflix has been trying to eat the theater owners and studios’ lunch. There is no reason why the theaters or studios should offer them a plate to eat from. Instead they should wise up and deny them this request. Maybe it will cost Netflix this film from Greta Gerwig, but that ain’t AMC or Alamo’s problem.
I recently listened to a great interview with Kara Swisher and director John Chu. Chu was offered a bunch of money to take his film Crazy Rich Asians to Netflix. He turned them down to go with a much lower offer from Warner Brothers because when it comes to films movie theaters are like museums saying, “It's like a museum and people pay money to go see the museum. It's the best of the best. And you go there and you get people's attention and the deal with the audience is different.”
He’s not wrong.
More recently, Greta Gerwig’s Barbie producing partner and star Margot Robbie also turned down Netflix’s more lucrative offer for a theatrical release via Warner Brothers for her next film Withering Heights.
The bottom line is that films on Netflix show up and then disappear. Studios, for all their problems, still know how to make an event out of a movie. They know how to turn on the marketing machine to really make these films feel big and important. Then, as Chu says above, audiences value the film more when they have to go somewhere to watch it.
Movie theaters are important. Which is why Greta Gerwig probably wants her big event film to play in one first and not on a small screen that fits in your hand. If the Hollywood talent is realizing that there is a difference between Netflix and movie theaters, and is preferring the latter, then movie theaters should fortify their position and keep Netflix films out.
Because, here’s the little secret, Netflix will need the films from the studios in order to keep people paying their monthly subscription prices. Ultimately, they need movie theaters more than movie theaters need Netflix.
For the first time in what feels like a long time the studios and the movie theaters have the high ground and they should not yield it.
Er, okay Netflix does technically need their awards contenders to play in a movie theater for at least two weeks to be eligible for an Academy Award. Good thing they own one movie theater in New York and one in LA.