Just as the relationship between Netflix and theater owners got better, the knives are being sharpened again.
The nation’s largest cinema circuits were taken by surprise on Oct. 18 when Netflix co-chief and chief content officer Ted Sarandos threw cold water on the significance of an unprecedented deal to play Rian Johnson’s Glass Onion: A Knife Mystery for a week over Thanksgiving before the sequel hits the streamer a month later.
“There are all kinds of debates all the time, back and forth. But internally, there’s no question that we make our movies for our members, and we really want them to see them on Netflix,” Sarandos said in a profit appeal. “Most people watch movies at home.”
Such messages will not make theater owners happy if they continue to recover from the pandemic.
And Sarandos’ comments seem to contradict what the country’s top circuits – AMC Theatres, Regal Cinemas and Cinemark Theaters – were told by Netflix movie chief Scott Stuber and distribution manager Spencer Klein before they all first agreed to create a Netflix. movie to play. (Cinemark started carrying some of the streamer’s releases during the pandemic.)
Telling multiple sources THR That Glass Onion was described as the first of several real tests trying to determine what kind of financial windfall an exclusive run in theaters could generate for Netflix, and what impact it would have on subscriber numbers, both ways. At the same time, Sarandos would still not authorize the release of gross amounts for: Glass Onion, or book the film in more than 600 theaters. The current count is around 641, which includes at least 215 AMC locations. Sources say Stuber would have liked a wider break.
Access to Netflix movies was welcome news for exhibitors, as they need products as Hollywood studios struggle with supply chain issues.
“This announcement of our first-ever agreement with Netflix is important to AMC and to movie buffs around the world. As we’ve said many times, we believe that both theater exhibitors and streamers can coexist successfully,” said Adam Aron, CEO of AMC, on Oct. Glass Onion agreement was announced. “Besides that, though, our wish has been that we find a way to crack the code and work together synergistically.”
Now AMC is one of those circuits disappointed by Sarandos’ comment, sources say. AMC declined to comment officially.
“Ted is withdrawing enormously and undermining his own team,” said one exchange director. And a marketing executive wonders why the streamer chose the high-profile Thanksgiving weekend if it really doesn’t care about the theatrical impact. It could have easily opened in early December to qualify for prizes.
Netflix is officially billing the theatrical un of Glass Onion: A Knife Mystery as a sneak preview (Netflix made $469 million for the sequel and a threequel). Grosses are not reported, but numbers will no doubt come out.
While the Glass Onion deal has made headlines, less attention has been paid to the second theatrical test: Alejandro González Iñárritu’s bardo, which will be released wide in theaters across Mexico on March 27 before Netflix debuts on December 16. That’s a 50-day cinema period, something Netflix has never agreed to before. A third test is brewing, but sources within the exhibition community won’t say what that film is.
Movie owners probably weren’t the only ones surprised by Sarandos’ comments that downplay the importance of theatrical. A large number of top filmmakers, Iiñárritu and Glass Onion‘s Johnson — along with Blades off franchise star Daniel Craig – wants a big screen presence.
The exhibition industry argues—and many Hollywood studios agree—that a run in theaters can boost ratings at home by making a movie part of the cultural zeitgeist. Unlike Netflix’s TV shows, original movies have historically had a harder time becoming proverbial water-cooler chatter.
In his comments on the earnings call, Sarandos compared: Glass Onion‘s week-long release in theaters for a film festival screening or an awards qualifier in terms of building buzz for a film’s debut on the service.
Response from a top studio executive: “A wasp’s nest has been set in motion and it has proven that Netflix is nothing more than a Trojan horse that doesn’t care about exhibitions.”
Other observers point to the risk that Netflix will reduce its guarantees to theater owners.
“If the big players in the industry want to talk on both the big screen and the small screen of the ledger about how these very different platforms are complementary and not hostile, then they should go down the road of this story,” said Comscore Chief box office analyst Paul Dergarabedian. “Only in an environment of cooperation and respect can this synergistic alliance exist.”