While Netflix is obviously a streaming media company first, over the last few years we’ve seen more high caliber and “awards bait” movies coming from the studio. As such, Netflix has needed to release these movies in theaters, at least for a while, in order to qualify for Oscars and other major awards. In most cases these films don’t make a great deal of money at the box office, but in the case of Rian Johnson’s Glass Onion, Netflix’s CEO admits the movie missed out on “lots” of money by only running in theaters for a week.
Glass Onion is estimated to have made about $15 million in its week of release that included the long Thanksgiving weekend. That’s not a massive number until you consider the movie was only released in about 600 theaters, making its per screen average quite significant. The general consensus seems to be that if the movie had been on more screens and/or been released for a longer period of time, it would have made a lot more money. Netflix CEO Reed Hastings recently told THR that the company absolutely left “lots” of money on the table, but making money theatrically was never the point. He explained…
It’s a promotional tactic like film festivals, and if it works well we will do more of it. We are not trying to build a theatrical business, we are trying to break through the noise.
Hastings says that he has “two religions: customer satisfaction and operating income” and that everything else is a tactic. In this case, the Glass Onion theatrical release, as well as any potential awards consideration it gets due to the release, is a promotional tactic. It has the potential to create more subscribers to Netflix, which helps with operating income, and if those customers like the movie, they will be happy, and keep their Netflix subscription, leading to the customer satisfaction Hastings says he also wants.
The birth and popularity of streaming has become a major disruption in the modern media landscape. Organizations that have existed and done business a certain way for decades are trying to figure out how to incorporate streaming, while streamers have to figure out how they can become part of the existing structure.
For better or worse, Reed Hastings isn’t simply looking to make money for Netflix, which is actually quite a shock considering he’s a CEO of a publicly traded company. He sees Netflix as a streaming company and wants to be sure that the company’s main source of revenue is that. Millions in box office receipts is almost certainly exciting, but the possibility exists that too much success there could lead to long term issues on the streaming side if too much focus is given to theaters.
Anybody that wanted to see Glass Onion will certainly be able to do so, but if they missed the theatrical run they’ll have to wait a few more weeks for the film to drop on Netflix.
