Netflix is still hurting from its stock drop last month, which came after the company lost customers for the first time in over a decade.
Analysts have proposed introducing adverts and enforcing password sharing restrictions to reshape the narrative in its favor. However, one way Netflix may help itself is to form a partnership with a sector with which it previously had a tense relationship: movie theaters.
Despite the fact that Netflix has released several films in cinemas — and even purchased a handful — the majority of its theater releases have been deliberately limited. Now that the streamer is healing and theaters are slowly recovering from the virus, it may be time for both sides to work together.Netflix (NFLX) could increase revenue from box office sales, promote its brand to more potential subscribers, and help make its films more memorable by releasing more films in cinemas – something the business has struggled with in the past.
Netflix hasn't seen many of its films become beloved brands in the way that some of its series have, such as "Stranger Things," whose new season premieres later this month. Despite having 221 million global subscribers, winning multiple Oscars, and working with some of Hollywood's biggest names, Netflix hasn't seen many of its films become beloved brands in the way that some of its series have.
Consider the song "Red Notice." According to Netflix, the film starring Dwayne "The Rock" Johnson and Gal Gadot was the most-watched movie of all time, although it arguably failed to have any kind of cultural impact.
Andrew Hare, a senior vice president of research at Magid, told CNN Business that "it's still practically impossible to construct a large movie series without theatrical releases."
"A number of films could definitely require theatrical," Hare added as the company's offerings grow."Not only for award season, but for the buzz necessary to be a key player at a specific period in time," he remarked.
Theaters should also collaborate with Netflix.
"Now, more than ever, theaters want content," said Jeff Bock, senior analyst at Exhibitor Relations, an entertainment research group. "A lot of Netflix movies have famous names associated to them, so that would get them through the turnstiles."
The National Association of Theater Owners is on board with the concept.
Last month, NATO's CEO, John Fithian, remarked, "Our doors are open to give larger play to Netflix movies." "We'd like to see more of their films," said the group.One of the most significant barriers for Netflix and theaters has been a disagreement over the length of time a film should be shown in theaters.
Netflix's business model is built on sign-ups, so it doesn't want customers to have to wait for movies, whereas theater owners, who rely on foot traffic, want exclusivity for as long as possible.
In 2019, the two sides couldn't agree on how long "The Irishman," Martin Scorsese's crime epic, should play in cinemas before being streamed. According to the New York Times, theaters requested a 70-day exclusivity window, but Netflix only wanted 45.
The epidemic, on the other hand, changed everything by decimating the theater window sector. Even conventional studios like Warner Bros. and Universal Pictures are now streaming theatrical films after only a few weeks, or even simultaneously.Beyond the theatrical window, there are further concerns, given that the theater industry entails additional costs that Netflix is unfamiliar with.
"It's not as simple as taking over a homepage," Hare remarked. "It's making the transition from the virtual to the real world. Marketing and promotion both cost money… There are numerous significant tactical and strategic decisions to be made."
Furthermore, releasing more films in cinemas may jeopardize Netflix's business model. Does it make you less likely to subscribe if you can see the one Netflix film you've been dying to see in theaters?
When it comes to partnering more with cinemas, there both benefits and drawbacks for Netflix. However, the firm wants to right its ship, and theaters are slowly returning to normal, so now would be the opportune time for the streaming service to put more of its films on a marquee.
"I believe Netflix is still testing," Hare remarked. "At this point, it can't afford to not experiment."
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