After losing subscribers for the very first time in more than ten years, Netflix is still hurting from its stock decline last month.
To swing the narrative back in its favor, experts have proposed introducing advertisements and restricting password sharing. However, Netflix may assist itself by forming alliances with movie theaters, a sector with whom it was formerly at war.
While Netflix has released several films in cinemas and even purchased a few theaters, the majority of its theatrical releases have been limited on purpose. Now that the streamer is nursing its wounds and theaters are slowly recovering from the coronavirus pandemic, it may be time for both sides to unite.
The Need To Start Releasing Films in Theatres
By releasing more films in cinemas, Netflix (NFLX) may generate additional revenue from box-office sales, broaden its brand to more prospective subscribers, and make its movies more distinctive – something the company has previously battled with.
In spite of being the streaming leader with 221 million worldwide subscribers, winning numerous Oscars, and collaborating with some of the top names in Hollywood, Netflix has still not seen many of its movies become as popular as its series, such as “Stranger Things,” whose latest season airs later this month.
Consider “Red Notice,” for instance. The movie featuring Dwayne “The Rock” Johnson and Gal Gadot was the company’s most-watched film ever, as per Netflix, but it failed to generate any form of blip in mainstream culture.
Talking to CNN business, Andrew Hare, a senior vice president of research at Magid, said that it is very hard to create a big film series without theater releases. As the corporation increases its product line, a lot of titles may require theatrical distribution. Not only for award season, but also for the buzz necessary to be a key player at a hybrid moment in a period that has one foot in physical media and the other in digital media.
What Is The Obstacle?
Both Netflix and cinemas have disagreed on how long a picture should play in theaters, which has been one of the most significant obstacles.
Netflix’s business model is dependent on sign-ups, thus it does not want customers to wait for films, but theater owners who rely on foot traffic desire exclusivity for as long as possible.
In 2019, the two parties could not agree on how long Martin Scorsese’s crime epic “The Irishman” should play in cinemas before being released on streaming services. As per the New York Times, theaters desired an exclusive window of 70 days, however Netflix would not go beyond 45 days.
But the coronavirus pandemic altered everything by reducing the industry-wide theatrical window. Even established companies such as Warner Bros. and Universal Pictures are releasing theatre films on streaming services within a few weeks or occasionally simultaneously.
Beyond the theatrical window, there are other concerns, given that Netflix is unfamiliar with the theater industry’s additional expenses.
According to Andrew Hare, it is not as straightforward as a homepage takeover. It is transitioning from the digital to the physical realm. Funds are required for marketing and promotion… A lot of enormous tactical and strategic decisions must be taken.
And increasing the number of films in cinemas might harm Netflix’s business model. If you can watch the one Netflix film you’re dying to see in a cinema, does it reduce your motivation to subscribe?
Working more closely with theaters has both positive and negative aspects for Netflix. However, the corporation has to right its ship, and cinemas are gradually returning to normal, so it may be time for the streaming service to promote more of its films.