At least once a year, if not once a quarter, Netflix is asked why it doesn’t invest more in theatrical and put more movies in theaters. Every time their answer is the same, though this time Netflix co-CEO Ted Sarandos gave his response a new spin.
Sarandos on Thursday’s Q3 earnings call said each of the streamer’s top 10 movies have over 100 million views (actually more than 136 million according to Netflix’s numbers) and are “among the most watched films in the world,” theatrical or not. But a massive audience isn’t all Netflix gives them.
“What we do for filmmakers is we bring them the biggest audience in the world for their films, and then we help them make the best films of their life,” Sarandos said. “That could be any one of the nine Best Picture nominee films that we’ve released so far, or it could be any of those top 10 films that are as big as billion dollar box office movies. So I’m sure that we can continue to pierce the Zeitgeist and have those moments in the culture, even when those moments begin on Netflix.”
We’re certain it isn’t lost on Ted that Netflix has nine Best Picture nominees, yet zero wins (Apple even has one). But Oscars aren’t everything when it comes to determining culture defining movies.
The debate over what movies break into the “Zeitgeist” and make an impact on popular culture is an ongoing one without a clear answer. There’s no doubt Netflix has made waves with dozens of shows becoming pop culture juggernauts. But films? It’s harder to claim that “Red Notice,” Netflix’s No. 1 movie ever, has made a comparable impact on pop culture to something like “Barbie,” even if the company says 230 million people have watched it.
The conventional wisdom among traditional studios and even rival streamers has been that a theatrical run and marketing push helps give a film cache and an air of quality before it lands on streaming, and it helps boost that movie’s profile across its lifetime.
But Netflix’s rationale for largely skipping theaters remains the same: “We believe that not making them wait for months to watch the movie that everyone’s talking about adds that value,” Sarandos said.
Netflix this quarter added 5 million subscribers, bringing the streamer to nearly 283 million subscribers globally. But Sarandos acknowledged that last year’s strikes impacted Netflix’s content slate more than usual — made it “lumpier” — and many projects got delayed. Not only that, Netflix had a changing of the guard when Scott Stuber left and Dan Lin came in that also impacted the film slate.
To add more to why he believes Netflix helps filmmakers make the best films of their lives, Sarandos also reiterated content chief Bela Bajaria’s comments that Netflix is not changing its compensation model. Because it doesn’t do theatrical and offer traditional backend upside, Netflix traditionally pays a premium in advance to continually attract the best talent, but the rumor around town was that Netflix was rethinking this model.
Sarandos said on Thursday’s call he’s open to more “bespoke” deals that do provide more backend upside, but “they rarely happen, because talent typically chooses the upfront model.” Doing that, he believes, helps filmmakers make the “best possible version of what they’re working on” through Netflix.
