Netflix Co-CEO Ted Sarandos again explained his company’s stance on prioritizing streaming-first releases in lieu of conventional theatrical windows. “People keep asking me, ‘Why don’t you do things like everyone else does?’” he said while speaking at Bloomberg Screentime conference in Los Angeles on Thursday. “Then I look at the financial results and say ‘Oh, maybe this isn’t what other people want.”
This is not remotely the first time Netflix has been grilled on this subject. Nor is it the first time Sarandos has defended what is quickly becoming a minority viewpoint within the industry.
Amazon and Apple reportedly plan to invest $1 billion each per year in theatrically-bound feature films. Legacy studios like Disney and Universal have mostly (but not entirely) ceased day-and-date releases or sending theatrically intended movies to streaming platforms. Netflix now mostly stands alone in terms of releasing big-deal movies either sans a theatrical release or with a minimal pre-streaming engagement.
“The films don’t tend to be any bigger because they were big in the box office,” he continued. “You just created a different window of demand-generation. We meet that demand, that demand that we generate on Netflix, and that’s our core business.”
This echoed comments Sarandos made in April amid a quarterly earnings call. “Remember, there’s a lot of ways to create and collect demand for film,” he said at the time, adding, “Driving folks to the theater is just not our business.”
He noted on Thursday that Martin Scorsese’s “The Irishman” got a 900-theater release in late 2019 and eventually received 10 Academy Award nominations while becoming (at the time) one of Netflix’s most-watched titles.
Netflix’s reluctance to embrace theatricality for its feature films threatens to become a point of contention. It has already become a talking point in terms of generating revenue and chasing awards season glory. However, going direct-to-consumer makes at least some sense when you have a membership base as big as Netflix’s.
Netflix’s large, highly active user base often watches whatever happens to be heavily promoted (via front page thumbnails) on the service. Rivals like Max, Disney+ and Paramount+ are mostly betting on IP and established franchises for big streaming figures. Meanwhile, Netflix can take a movie star like Ryan Reynolds or Sandra Bullock and put them in an original high-concept picture, such as “The Adam Project” or “The Unforgivable,” and grab comparatively massive viewership.
Sarandos argued that the pay-one movies, like Sony’s theatrical releases, “don’t necessarily perform bigger than our original films do.” He elaborated, “The theory [is that] you have to put movies into the theaters for some stretch of time before you give it to your subscribers who paid to make the movie right with their subscription fee. I don’t think the real payoff is in the favor of the consumer.”
He noted global streaming releases give Netflix’s subscriber base instant, opening-day access to the kind of films that, in a traditional system, might have been platformed theatrically or — in some cases — never made it past the arthouse before arriving on VOD, DVD and streaming.
“It opens up that distribution footprint around the globe.” However, he certainly understands the “romantic connection people have with the movie theater.” He noted that Netflix supports that sentiment with the Paris Theater in New York City.
“We saved the last single-screen theater in Manhattan,” the co-CEO stated. Furthermore, “We just put in a brand new incredible Atmos sound system. We use it to premiere our films, but we also use it as a revival house. Sold out audiences [get to see] great movies that have never been seen in Atmos before.”