Is Netflix's war with movie theaters nearing an end?

Why there's good reason to believe 'Knives Out 2' will be in a theater near you

A movie theater.
(Image credit: Illustrated | iStock)

Netflix and major movie theater chains have long had a contentious relationship — but that could soon come to an end. Here's everything you need to know:

Do Netflix movies get theatrical releases?

Netflix has released a number of its original movies in theaters over the past few years, including Martin Scorsese's The Irishman and Roma, which earned Alfonso Cuarón an Oscar for directing. But for the most part, these films were small releases, confined to independent venues — not the kind of nationwide rollout that sees a big studio movie hit thousands of theaters.

In 2021, though, Netflix made a breakthrough with the third-largest theater chain: ​​Cinemark, which released Netflix movies like Army of the Dead and Red Notice. The partnership allowed the films to play in hundreds of theaters, though the biggest American theater chains, AMC Theatres and Regal Cinemas, didn't participate.

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Does Netflix plan to put more of its movies in theaters?

A recent report from Bloomberg revealed Netflix executives have discussed trying to release more of its original movies in "thousands of theaters" this year and let them play exclusively on the big screen before they hit streaming. But the report notes Netflix still needs to work out deals with AMC and Regal, which the streamer has clashed with in the past.

Why don't AMC and Regal like Netflix?

The dispute between Netflix and theaters mostly comes down to what's known as the "theatrical window" — that is, the length of time a movie plays exclusively in theaters before it's available to watch at home. For many years, films carried by major theater chains were typically required to have a theatrical window of around 90 days; if movies were available to watch at home sooner, the thinking went, then nobody would spend the money to see them in a theater.

As Netflix started producing award-worthy movies like Roma and The Irishman, it sought to give some of its films a presence in theaters — primarily because a theatrical release is a requirement for a movie to be eligible for the Oscars. But Netflix didn't want to wait a full three months before allowing its subscribers to stream the movies, and AMC and Regal refused to play films that would be on Netflix before the traditional theatrical window was over.

Has Netflix tried to make a deal with the theaters?

Netflix tried to work out an agreement with AMC and Regal in 2019 ahead of the release of The Irishman. But no deal was reached, and The New York Times reported Netflix was unwilling to extend the theatrical window beyond 45 days, though the chains were reportedly willing to lower it to 60 days.

So what's different now?

The COVID-19 pandemic fundamentally altered the theatrical landscape and led movie theater chains — which were suddenly desperate to stay afloat — to be more receptive to shorter theatrical windows. In fact, due to pandemic circumstances, AMC and Regal were even willing to play movies like Black Widow that had no theatrical window at all and premiered on streaming the same day they debuted in theaters.

As COVID-19 cases declined and vaccines became more widespread, studios generally moved away from the strategy of simultaneous streaming releases. But a shorter theatrical window may be here to stay. In March 2022, Warner Bros. released The Batman exclusively in theaters but then put it on HBO Max a mere 45 days later — the same number of days Netflix offered for The Irishman — and AMC and Regal still carried the film. The movie grossed over $750 million in theaters worldwide, suggesting the 45 day strategy is financially viable. What would have been an unusually short period of exclusivity a few years ago is rapidly becoming an accepted practice.

According to Bloomberg, 45 days is still the number Netflix is eying. But "theaters will only do a deal with Netflix if the company promises to spend a considerable amount of money telling people to watch the movie in theaters," and it's not clear if the streamer is willing to do so.

Why would Netflix and theaters want to work together?

The two parties both have reasons to make a deal, as CNN notes, writing, "Netflix needs franchises, theaters need movies." While movie attendance has been increasing since 2020, it's still down from pre-pandemic levels, and part of that is because theaters just haven't had as many films to show. A number of big blockbusters will debut this summer, but the schedule is lighter than prior to the pandemic. So in making a deal with Netflix, theaters would be bolstering the slate of movies they can play.

Meanwhile, Netflix is looking for ways to boost revenue after revealing it lost subscribers for the first time in over 10 years. Analysts also argue the streamer needs to do more to make its expensive original movies into cultural events, as opposed to content that drops on the service without the kind of fanfare a blockbuster movie gets.

What movies would this apply to?

Don't expect Netflix to suddenly premiere all of its movies in theaters. If a deal is worked out, the company would likely only give major exclusive theatrical runs to its biggest titles. According to Bloomberg, two possible candidates this year include a movie from ​​Alejandro González Iñárritu, director of The Revenant, and Knives Out 2. The latter, in particular, seems like a natural fit for a theatrical release. Netflix spent a jaw-dropping $450 million on two sequels to the 2019 murder mystery, and the original grossed over $300 million in theaters.

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