Netflix, Inc. (NASDAQ:NFLX) has always been viewed as a threat to theaters but the company seems to be steering towards mending its relationship with movie theatre owners.
Netflix recently revealed that it is willing to work with movie theaters and this gave a glimmer of hope that films from the worldwide streaming service might end up in cinemas. This comes just one year after John Fithian, the head of the National Association Of Theater Owners described the streaming service as a massive threat to the film industry. However, the new announcement means things might soon take a different turn.
“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 theaters simultaneous to Netflix. Let consumers choose,” Netflix stated in a recent shareholder letter.
What would the presence of Netflix films in theaters mean?
If Netflix was to allow its original films to be released in theaters, it would allow the company to potentially attract a wider audience while marginally increasing its revenue. It would also be advantageous in terms of revenue gains for the theater owners. However, things would not be as easy because the streaming giant still wants its original films to debut on the streaming platform on the same day as the theater release. This could potentially take away from the potential earnings of the films in theaters.
Netflix is a powerhouse when it comes to original films
Netflix’s decision to focus more on original content proved to be a smart move and one that has earned the company a lot of success. The company’s original films have been doing so well but are only allowed on the streaming platform. The theater owners association is worried that Netflix will be more attractive to the film industry such that filmmakers will first go to Netflix. But if the streaming giant was to allow its movies in mainstream theaters then it would be less of a threat.
Netflix stock closed Tuesday’s trading session at $143.36, marking a 2.64% drop from the previous closing price.