Would Netflix have to approach movie theaters to save itself?

(CNN Business) — Netflix is ​​still reeling from its stock plunge last month after losing subscribers for the first time in more than a decade.

To turn the narrative in their favor, analysts have suggested adding ads and clamping down on password sharing. But one way Netflix can help itself is by allying itself with an industry it was once at odds with: movie theaters.

Although Netflix has released plenty of movies in theaters, and has even bought a few theaters to boot, most of its theatrical releases have been limited on purpose. With the streaming platform licking its wounds and movie theaters slowly recovering from the pandemic, now might be the time for both sides to finally come together.

Netflix needs franchises, theaters need movies

By releasing more movies in theaters, Netflix could generate new revenue from box office sales, expand its brand to more potential subscribers and help make its movies more memorable, something the company has struggled to do.

Despite being the leader of the streaming With 221 million global subscribers, winning multiple Oscars, and working with some of the biggest names in Hollywood, Netflix hasn’t seen many of its movies become beloved brands the way some of its series have, like ” Stranger Things,” whose new season premieres later this month.

“Red Notice”, for example. The film starring Dwayne “The Rock” Johnson and Gal Gadot was Netflix’s most-watched movie, according to the company, but it arguably failed to make any sort of detour in pop culture.

“Basically, it’s still impossible to build a big movie franchise without theatrical releases,” Andrew Hare, Magid’s senior vice president of research, told CNN Business.

Hare added that as the company expands its offerings, “a number of titles are likely to require cinema.”

“Not just because of awards season, but because of the hoopla it takes to be a major player in a hybrid time where there’s still one foot physical and one foot digital,” he said.

Getting along with Netflix would also be a good idea for theaters.

“Theaters need content now more than ever,” said Jeff Bock, a senior analyst at entertainment research firm Exhibitor Relations. “A lot of Netflix releases are associated with big names, so it would certainly help them get through the turnstiles.”

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

“Our doors are open to give Netflix movies a broader play,” John Fithian, executive director of NATO, said last month. “We would love to play more of his movies.”

What is the delay?

One of the biggest hurdles for Netflix and theaters is that both sides have squabbled over how long a movie should play in theaters.

Netflix’s business is based on subscriptions, so it doesn’t want subscribers waiting for movies, while theater owners whose business is based on foot traffic 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 “The Irishman,” Martin Scorsese’s crime epic, should play in theaters before heading to the United States. streaming. Theaters wanted an exclusive 70-day window, and Netflix would not exceed 45 days, according to the New York Times.

But the pandemic changed everything by shrinking the theatrical window industry to its full extent. Even traditional studios like Warner Bros. and Universal Pictures are now releasing theatrical films in streaming after a few weeks or sometimes simultaneously.

Beyond the theater window, there are other issues considering that the theater business comes with additional costs that Netflix isn’t used to.

“It’s definitely not as easy as taking control of a home page,” Hare said. “It’s moving from the digital to the physical world. It takes money for marketing and promotion… It’s a huge series of tactical and strategic decisions that need to be made.”

And putting more movies in theaters could damage the very model of Netflix. If you can go see the Netflix movie you’re eager to see in theaters, does that give you less incentive to subscribe?

Ultimately, there are tradeoffs for Netflix when it comes to working with theaters more. However, the company needs to right its ship and theaters are constantly getting back on track, so now might be the time for the streaming platform to put more of its movies on a marquee.

“I think Netflix is ​​still in experimental mode,” Hare said. “You can’t afford not to experiment right now.”

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