To save itself, Netflix may have to toy with an industry it has fought for years

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To turn the narrative in its favor, analysts suggested adding ads and restricting password sharing. But one way Netflix can help itself is by allying with an industry it once was at odds with: movie theaters.
Even though Netflix has released many films in theaters – and even bought a few theaters to start – most of its theatrical releases have been deliberately limited. As the streamer licks its wounds and theaters slowly recover from the pandemic, it might be time for the two parties to finally come together.
By releasing more films in theaters netflix (NFLX) could generate new revenue from box office sales, expand its brand to more potential subscribers, and help make its films more memorable, which the company has struggled to do.
Despite being the streaming leader with 221 million subscribers worldwide, winning multiple Oscars, and working with some of Hollywood’s biggest names, Netflix hasn’t seen many of its films become beloved brands as some of its series have, such as “Stranger Things,” the new season of which will debut later this month.
Take “Red Notice”, for example. The film starring Dwayne “The Rock” Johnson and Gal Gadot was Netflix’s most-watched film, according to the company, but arguably failed to make any sort of blip in pop culture.

“It remains fundamentally impossible to build a great movie franchise without theatrical releases,” Andrew Hare, senior vice president of research at Magid, told CNN Business.

Hare added that as the company expands its offerings, “a number of titles could likely require a theatrical release.”

“Not just for awards season, but for the buzz required to be a major player at a hybrid time in an era that remains one foot in physical and one foot in digital,” he said.

Playing well with Netflix would also be a good idea for theaters.

“Movie theaters need content now more than ever,” said Jeff Bock, senior analyst at entertainment research firm Exhibitor Relations. “A lot of Netflix releases have big names attached, so that would definitely get them through the turnstiles.”

Even the National Association of Theater Owners is open to the idea.

“Our doors are open to give Netflix movies a wider play,” said NATO CEO John Fithian. mentioned last month. “We would like to play more of their films.”

What is the delay?

One of the biggest hurdles for Netflix and cinemas is that both sides have fought over how long a movie should run in cinemas.

Netflix’s business is subscription-based, so it doesn’t want subscribers waiting for movies, while theater owners whose business operates on foot want exclusivity for as long as possible.

This debate came to a head in 2019 when the two sides couldn’t agree on how long Martin Scorsese’s detective epic ‘The Irishman’ should play in theaters before heading to the streamer. . Theaters wanted an exclusive 70-day window and Netflix wouldn’t go beyond 45 days, according to the New York Times.
But the pandemic has changed everything by shrinking the theater window industry on a large scale. Even traditional studios like Warner Bros. and Universal Pictures are now releasing theatrical movies on streaming after only a few weeks or sometimes simultaneously.
Netflix may restrict password sharing.  Here's what that means

Beyond the theatrical window, there are other issues as theatrical activity brings additional costs that Netflix is ​​not used to.

“It’s definitely not as simple as a homepage takeover,” Hare said. “It’s going from the digital world to the physical world. It takes money for marketing and promotion… It’s a number of huge tactical and strategic decisions that have to be made.”

And putting more movies in theaters could hurt Netflix’s very model. If you can go see the one Netflix movie you can’t wait to see in theaters, does that make you less enticed to subscribe?

Ultimately, there are pros and cons for Netflix when it comes to working more with theaters. Still, society needs to right its ship and theaters are steadily returning to normal, so maybe it’s time for the streamer to put more of its movies on a marquee.

“I think Netflix continues to be in experimental mode,” Hare said. “He can’t afford not to experiment right now.”

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