Brian Welk
2026-01-21 00:00:00
Have we and the rest of Hollywood been wrong this whole time or just not paying attention? It turns out Netflix loves movie theaters (and they always have), but their own theatrical ambitions took a backseat to other investments Netflix was making. Now that they’re attempting to buy Warner Bros., of course they’re excited to make theaters even stronger.
In Netflix’s earnings call on Tuesday, co-CEOs Greg Peters and Ted Sarandos told analysts that they’ve long debated building a theatrical business for the streaming giant, but it just wasn’t the “priority” compared to Netflix’s other innovations over the years. But Sarandos is proud of how flexible Netflix has proven to be when it comes to its direction these last few years.
“We debated many times over the years whether we should build a theatrical distribution engine or not, and in a world of priority-setting and constrained resources, it just didn’t make the priority cut,” Sarandos said. “So now, when this deal closes, we will have the benefit of having a scaled, world class distribution business with over $4 billion of global box office. And we’re excited to maintain it and further strengthen that business. Warner Bros. films are going to be released in theaters with a 45-day window, just like they are today. This is a new business for us and one we’re really excited about, and I’m actually quite proud of our long track record of evolving the business, and I believe our results speak to that as well.”
Sarandos was asked simply why his view on theatrical windowing has changed. Let’s, for a moment, set aside that VP of Finance Spencer Wong referred to this as their “quarterly theatrical question,” perhaps a reminder that Netflix has been so vague and inconsistent about the idea of putting a movie in theaters longer than a week that they quite literally get a question about it every quarter.
But the question now refers to some recent comments Sarandos made to The New York Times, in which he committed to a 45-day window for Warner Bros. movies to remain in theaters before landing on Netflix, adding that he wants to “win the box office.”
The Times even asked him if he regretted calling the theatrical business an “outmoded idea,” to which he challenged that he actually said it’s “outmoded for some.” He said in the interview his views changed when they looked under the hood and saw that, hey, actually some of these movies are doing well in theaters.
He reiterated as much in the earnings call. “I have in the past made observations about the theatrical business,” Sarandos said on Tuesday. Yes, a few times.
He continued: “We were not in the theatrical business when I made those observations. When this deal closes, we will be in the theatrical business. And as I’ve said many times, this is a business and not a religion, so conditions change! And insights change. And we have a culture that we re-evaluate things when we do.”
Peters actually said something similar earlier in the call about theaters, that they already knew theaters are an “effective complement to the streaming model.” The only reason they didn’t go all in was because “we were busy investing in other areas.” Got it.
Sarandos’ “outmoded” remark came back in April 2025, but he’s been clear about what he thinks of movie theaters well before that. In September 2024, he said theatrical distribution is an “inefficient” means of distributing some films (there’s that “some” word again). In that interview, he said “audiences don’t care about windows at all. … They never talk about it over dinner.”
Well, Ted is talking about windows now. And in an earnings call in October 2024, he said that in terms of what viewers care about and why their movies skip theaters, “we believe that not making them wait for months to watch the movie that everyone’s talking about adds that value.”
Netflix’s alleged interest in movie theaters has been so obvious to the industry that the CEO of Cinema United, which represents exhibitors around the country, went to Congress to advocate against Warner Bros. being acquired by Netflix.
“Netflix’s stated business model does not support theatrical exhibition,” Cinema United’s Michael O’Leary said bluntly in a statement this month, adding that “theatres will close, communities will suffer, jobs will be lost.”
Sarandos countered on the call and in the NYT interview that, unlike Paramount’s proposal, he believes acquiring Netflix would help them make more movies, not fewer, and would lead to more jobs, specifically in the U.S. Recent history would suggest otherwise; when Disney acquired Fox, the combined output of both studios shrank significantly.
But even if Netflix keeps Warner Bros. movies in theaters for now, when does Sarandos’ view on theaters evolve again and he decides to shrink that window further, or even remove WB movies from theaters entirely?
There are likely deals in place for WB’s current slate of films to stay in theaters, but once those are through, what’s stopping Netflix from pulling back? Netflix does not report box office grosses and never has, even though a movie like “KPop Demon Hunters” or the one-day release of the “Stranger Things” finale has given Netflix some serious wins within the theatrical space.
While Netflix can say now that it believes there’s a good connection between theatrical marketing and how a movie does on streaming later, so far, only their rival Amazon is actually making a major commitment to a theatrical business by aiming to put up to 16 movies a year in theaters.
Sarandos is right that this is a business and not a religion. It’s why we have little faith in this commitment to theaters.
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