netflixit is (NFLX 3.07%) agreement to launch Knives out The following in theaters for a week before the film appears on the streaming platform indicates that the film industry still needs theaters as much as theaters need support from Hollywood.
While the output of Glass onion: a mystery at loggerheads probably benefits Netflix more than cinemas, it shows that cooperation between studios, platforms and cinema operators will allow all to thrive.
Back to the big screen
Netflix is losing subscribers and will start offering a lower-cost, ad-supported subscription tier to stem the bleeding. A theatrical release of Daniel Craig’s murder mystery could help attract more subscribers to the platform.
The original film was a financial success, if not a blockbuster, grossing $311 million worldwide on a $40 million budget. Netflix has won the rights to two Knives out sequels, paying $450 million for the privilege, and a theatrical run where it splits the box office with theaters to recoup some of its costs.
Yet the benefits are limited. The Knives out The sequel won’t be a full theatrical release, as it will only be shown in around 600 theaters, whereas blockbuster movies usually play in thousands of theaters. It’ll also just be a taste of the movie, which will run about a week before Thanksgiving before hitting the Netflix platform in December, meaning it won’t make the kind of money a release would. theatrically typical would do. Netflix, however, is no doubt hoping that enough buzz will build around the film to entice others to subscribe and watch the film at home.
Put the bodies in the seats
For movie theaters, the deal keeps them in the loop, and first-run exclusivity means they remain vital to the industry’s ecosystem at a time when attendance is well below pre-existing levels. the pandemic.
Industry site TheNumbers estimates that theaters will generate some $7.7 billion in box office revenue from 843 million tickets sold this year, up from $11.2 billion generated in 2019 from 1.2 billion. tickets sold.
AMC Entertainment (AMC -4.41%) CEO Adam Aron said: “As we’ve said many times, we believe theatrical exhibitors and streamers can continue to successfully co-exist…thanks to the broader cultural resonance these films can draw from a live release. theaters, they will eventually play to wider audiences when viewed on streaming platforms as well.”
It also helps cinema results, as they have more and varied films to show and attract audiences. Aron also thinks it could lead to additional movie screenings in the future from Netflix.
Like the good old times
This is not the first time that Netflix has presented one of its films in theaters before releasing it on its platform. In 2018, when the streamer had its sights set on winning the Oscars, it allowed for early theatrical airings of Rome, The Ballad of Buster Scruggsand Sandra Bullock’s surprise post-apocalyptic hit bird box. Netflix has already shown movies like beasts of no nation, 22nd of Julyand Okja in theaters, but these were same-day releases for the platform.
It was a marked change from previous years, when AMC, Cinemark, and owner of the Regal Theater cineworld refused to show the Netflix Crouching Tiger Hidden Dragon sequel because the streamer would not meet the exclusivity window that theaters used to order. But the pandemic has changed everything.
Where once it took 90 days from its theatrical debut for a film to appear on a streaming platform, the window has narrowed and the COVID outbreak has completely closed it. Comcast (CMCSA 0.04%) turned everything upside down when he released his Trolls: around the world direct-to-stream children’s film because cinemas had been forced to close.
Although there was much consternation at the theatre, and disney (SAY 0.33%) said there was no going back to the old system, deals were eventually made with studios for many movies to hit theaters first for a while before heading to the platforms of internal streams.
So, in a way, Netflix’s deal with AMC, Cinemark, and Regal isn’t so much a landmark achievement as it’s a return of sorts to the old status quo. And the more cinemas can get streamers to show their movies in theaters, the better off they will be.
While neither side is coming out of the deal particularly well, a spirit of cooperation might just see Netflix and theaters through this time better than where they started.
Rich Duprey has no position in the stocks mentioned. The Motley Fool holds positions and recommends Netflix and Walt Disney. The Motley Fool recommends Comcast and recommends the following options: January 2024 Long Calls at $145 on Walt Disney and January 2024 Short Calls at $155 on Walt Disney. The Motley Fool has a disclosure policy.