Netflix Acquisition of Warner Bros.: Impact on Movie Theatres

Some folks in the movie theater industry are feeling a bit nervous about Netflix’s potential purchase of Warner Bros. Discovery. They’re worried that this move could signal trouble for the good old fashioned movie-going experience. When rumors started swirling that Netflix might be swooping in to buy one of Hollywood’s oldest and most cherished studios, Sonya Yokota William, from the Network of Independent Canadian Exhibitors, couldn’t help but fret. Even with Netflix promising to keep things running as usual, including releasing films in theaters, William isn’t totally convinced.

Despite the $72 billion that Netflix is willing to shell out to acquire Warner Bros. Discovery, the deal still needs the green light from regulators. And in the meantime, Paramount Skydance is stirring things up with a hostile takeover bid worth a whopping $108.4 billion. The movie industry experts out there are saying that while people still love the idea of catching a flick at the theater, the rising costs of movie tickets mean that a night at the movies isn’t as wallet-friendly as it used to be.

Michael O’Leary, from Cinema United, a group representing over 31,000 movie screens across the U.S. and Canada, is sounding the alarm about Netflix’s bid. He’s calling it an “unprecedented threat to the global exhibition business,” and is concerned that a Netflix-owned Warner Bros. Discovery might spell disaster for the traditional theater experience. Netflix’s track record of mainly using theatrical releases to vie for awards rather than genuine theater love has folks like O’Leary worried.

Netflix’s co-chief executive, Ted Sarandos, has been raising eyebrows with his comments about the future of movie theaters. His words questioning the importance of the communal theater experience are making some industry insiders uneasy. Serena Whitney, from Toronto’s Revue Cinema, is also waiting with bated breath to see what a Netflix-owned Warner Bros. Discovery would mean for independent theater owners like herself. There’s a fear that Netflix might not handle Warner Bros.’s film catalog in a way that supports smaller, more niche theaters like Revue Cinema.

Some experts are pointing out that movies are already losing out on cash due to shorter stints in theaters. Data from The Numbers shows that cutting short the amount of time a movie spends exclusively in theaters could cost cinemas millions of dollars each year. With the average theatrical window shrinking to around 30 days post-COVID-19, folks like Alicia Reese, a media analyst from Wedbush, say that Netflix’s focus on shortening this window is risky business.

While Netflix has agreed to keep Warner Bros. Discovery’s commitment to theatrical releases for a while, there’s still uncertainty about what happens next. With plenty of movies waiting in the wings for release, there’s speculation that Netflix could swoop in and keep them all to themselves for streaming. So, the future of theater-going hangs in the balance as these big moves play out in the entertainment industry.