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Netflix is willing to put its films in theaters — but not before online release

Netflix is willing to put its films in theaters — but not before online release

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Vote with your dollar

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Sandy Wexler.

What is the role of theaters as streaming platforms become film studios? That question is floating around an anxious film industry as Netflix, Amazon, Hulu, and other video streaming services rapidly contract talented filmmakers and make aggressive acquisitions at big-name festivals. Amazon has cooperated with theaters, releasing awards-friendly films like Manchester by the Sea and Chi-Raq in cinemas before making them available to subscribers. But Netflix has been doggedly committed to releasing every new film directly onto Netflix, even when it hurts at the Oscars. And today, we got a small explanation why.

In Netflix’s shareholder letter, the company delivered the following defense of its release strategy:

Since our members are funding these films, they should be the first to see them. But we are also open to supporting the large theater chains, such as AMC and Regal in the US, if they want to offer our films, such as our upcoming Will Smith film Bright, in theatres simultaneous to Netflix. Let consumers choose.

In some ways, this quote demonstrates a willingness to budge, if only ever-so-slightly. Bright, a Will Smith action film from the director of Suicide Squad, is scheduled for release in theaters and on Netflix this December. Its action setpieces will presumably benefit from the big-screen experience. But the comment almost sounds like a dare: “Go ahead, let’s see whether viewers will choose the expensive theatrical experience over watching the movie at home as part of their Netflix subscription.”

What’s most telling about this quote, though, is the claim that viewers “are funding these films.” The phrase implies a bit of editorial direction on the viewers’ part, and suggesting they vote with their dollars. This may explain where Netflix chose to invest for the foreseeable future. According to the same letter, Netflix users have watched more than half a billion hours of Adam Sandler movies since the release of Ridiculous 6 in December 2015. Last month, Netflix announced plans to release another four new Adam Sandler films.

Netflix wants to make sure viewers get what they paid for. That will mean more art movies bypass theaters, Will Smith movies hit Netflix the same day as the big screen, and perhaps most importantly, there will be many more Adam Sandler movies, and one place to watch them. You get what you pay for — but mostly what other people pay for.