Several corporations are competing for the right to acquire Warner Bros. Discovery, and Netflix is emerging as one of the more intriguing candidates. As other suitors like Comcast and Paramount Skydance submit their bids, Netflix is sweetening its offer by promising to honor Warner Bros. Discovery’s theatrical commitments if it absorbs the entertainment conglomerate.
Netflix, which is one of the frontrunners in the Warner Bros. Discovery sweepstakes, has a complicated relationship with the movie theater industry. Traditionally, it has not committed to the exclusive theatrical windows theater chains prefer. That strategy has caused some of those chains to boycott Netflix releases, as they did with the critically-acclaimed 2015 Oscar contender Beasts of No Nation.
Even if Netflix Co-CEO Ted Sarandos believes the film industry’s theatrical distribution model is “outdated,” his company has recently softened its once-hardline stance. In recent years, we’ve seen a higher number of prolonged theatrical runs for Netflix originals, and the streamer is also treating cinemas as host venues for limited-time events. A KPop Demon Hunters sing-along, for example, showed that Netflix could fill seats even during a historically fallow period for Hollywood.
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Emboldened by that success story, Netflix is now plotting more theatrical events, including big-screen showings for the final season of Stranger Things. Amid that push, Netflix execs have reportedly told Warner Bros. Discovery brass that they would continue releasing Warner Bros. films in theaters, according to Bloomberg. Translation: After thinking about acquiring theater chains to break onto big screens, Netflix is now wondering if it can power that transition by acquiring a film studio.
That plan raises a few questions. For starters, why would Netflix want to get into movie theaters now, amid a prolonged Hollywood slump? A glass-half-full type would say that Netflix can revive theatrical viewership rather than falling victim to the same forces that are affecting traditional distributors. Some of those optimists are active on Wall Street, where chains like AMC and Cinemark enjoyed upticks in the wake of Netflix’s statement.
Here’s the other big stumper: Is Netflix actually committed to theatrical runs, or is it just promising not to upset the Warner Bros. status quo? Michael O’Leary, the CEO of trade organization Cinema United, doesn’t seem convinced about the streamer’s intentions. “Netflix’s apparent agreement to abide by existing contractual obligations that they might inherit says nothing about a meaningful commitment to theatrical exhibition,” O’Leary told Bloomberg.
Even if Netflix can acquire Warner Bros. Discovery, theater chains will need more cajoling before they believe that Sarandos and co. have noble intentions. But events like the KPop Demon Hunters sing-along show that Netflix’s release strategy is in a far different place from where it used to be — and that shift is happening whether Warner Bros. Discovery is involved or not.
