<\/p>\n
Here\u2019s a funny thing about the debate over whether streamers should release their movies in theaters first:<\/p>\n
\nBoth sides think the other side represents the \u201cconventional wisdom\u201d.<\/p>\n<\/blockquote>\n
If you\u2019ve been reading me for any amount of time, or even just scanned my front page, you know I think movies make more money by having a robust theatrical window compared to going straight-to-streaming. I\u2019ve <\/span>published<\/a> <\/span>thousands<\/a> of <\/span>words<\/a> on <\/span>this topic<\/a>. And for years, I felt like I was standing up to a wave of opposition.<\/span><\/p>\n
See, while the \u201cput your films in theaters to make money\u201d take was obvious at any point before 2019, post-streaming revolution, most of the trendy thinkers took the opposite point of view. Big names argued that Netflix putting their film straight-to-streaming (\u201cS-to-S\u201d from here on out) actually made more money. Netflix was \u201cdisrupting\u201d theaters, just as they disrupted Blockbuster Video, and since innovation is always good, this too was a great idea.<\/p>\n
This thinking then leaked into the mainstream business outlets like the <\/span>Wall Street Journal<\/em> and <\/span>Bloomberg<\/em>. I read many articles whose take boiled down to \u201cNetflix makes tons of money from S-to-S releases\u201d and \u201ctheaters were in structural decline\u201d anyways. Covid-19 shutting down theaters and the 2023 strikes shutting down film production seemingly justified this point of view, as the box office struggled to return to 2017-2019 heights.<\/span><\/p>\n
Yet I\u2019ve also read folks arguing the opposite point: the conventional wisdom says to put films in theaters! From some writers\u2019 points of view, \u201ceveryone\u201d actually agrees\/agreed with my \u201csend your films to theaters\u201d take\u2014especially the stodgy traditional studios\u2014and folks still didn\u2019t understand Netflix\u2019s genius. I feel like, for the last two years, many people have argued this point as if it\u2019s conventional wisdom.<\/p>\n
You know what? I may have been wrong. <\/p>\n
At this point, the \u201cS-to-S strategy makes money\u201d might be the minority viewpoint. <\/p>\n
Especially with the news this month that Netflix will put at least one film\u2014Greta Gerwig\u2019s Narnia film <\/span>The Magician\u2019s Nephew<\/em>\u2014in theaters in 2027 for a full 49-day run is big news. So that\u2019s the story of the week, but I\u2019ll also explain why they\u2019re making this move now and why Netflix may not completely embrace theaters, along with other topics, like how I don\u2019t buy Disney\u2019s \u201csuper app\u201d strategy, the latest good news out of the unions, my take on the latest attacks against free speech, and a whole lot more.<\/span><\/p>\n
Let\u2019s get started.<\/p>\n
Listen, I promise not to victory lap too hard today. As I just wrote, I\u2019ve argued against sending films straight-to-streaming for\u2014checks calendar\u2014eight years now. Since 2018. Yikes. That\u2019s a long time.<\/p>\n
And for years, others painted my thinking as \u201cconventional\u201d in that I was standing up for the status quo against trendy, cool disruption. And that\u2019s not cool! But math is math, and I never could make the S-to-S numbers work. The only thing that ever enabled that model was Wall Street\u2019s brief exuberance for it.<\/p>\n
It seems like the heads of Netflix now agree with me. (There were always rumors that former head of film for Netflix Scott Stuber argued internally for theatrical releases as well.) As they announced:<\/p>\n
\n\u201cThe Magician\u2019s Nephew<\/span>\u2014the first film in a Narnia series of films\u2014will open on 12-Feb-2027, with a 49 day theatrical exclusive run.\u201d<\/em><\/p>\n<\/blockquote>\n
I\u2019m a little surprised at how little coverage this big change actually got. Credit to <\/span>Bloomberg<\/em> for leading with it and Matt Belloni\u2019s <\/span>The Town<\/em> for <\/span>highlighting it<\/a> with the provocatively titled podcast \u201c<\/span>Hell Hath Frozen Over<\/a>\u201d. But after that? Instead of getting as much coverage as, say, the FCC\u2019s latest egregious crackdown on free speech, this news story got crickets. But it\u2019s massively more important for the future business of entertainment.<\/span><\/p>\n
So let\u2019s start with the obvious question\u2026<\/p>\n
So\u2026why should Netflix put (some!) of their movies in theaters? Well, I\u2019ve already written that in a very, very, very long article from 2022:<\/p>\n
<\/p>\n\n<\/picture><\/div>\n \nThe Data Is In: Theatrical Films Massively Outperform Straight-To-Streaming Films<\/h4>\n<\/div>\n<\/div>\n
<\/a><\/div>\n
To summarize, theatrical runs make much more money, especially blockbusters, because they earn more money per viewing,<\/span> and that helps boost home entertainment sales. Theatrical films also perform as well or better than the streaming-only films. Now, partially this is driven by increased marketing for said films, but said marketing ultimately boosts the awareness of the movies and drives improved streaming and library performance as well. Again, I\u2019ve made this case after reviewing the economic models and streaming data for years. Just last week, Emily Horgan <\/span>also made the case for kids films<\/a>! Yes, it is probably conventional wisdom, but that\u2019s also because it\u2019s true!<\/span><\/p>\n
I\u2019d also argue we\u2019ve seen a lot of data in the various studios\u2019 behavior. As I\u2019ve noted before, the more a studio needs to make money, the likelier they are to put films in theaters.<\/p>\n
As such, Disney, Universal, Warner Bros., Paramount and Sony all send their major films to theaters. Even if they once made a big S-to-S push (*cough* Disney *cough*), they\u2019ve since relented and returned to theaters.<\/p>\n