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Despite these small steps, Netflix continues to face resistance from major theater chains. The core issue? Windowing.
In traditional Hollywood, films premiere in theaters for a minimum of 45–90 days before becoming available on streaming or digital rental. This “theatrical window” is sacred—it allows exhibitors to recoup costs, build momentum, and maximize revenue.
But Netflix prefers shorter windows—or none at all.
For example, Glass Onion: A Knives Out Mystery had a seven-week limited theatrical run before debuting on Netflix. While this satisfied Academy eligibility rules, it was still much shorter than the industry standard, and some theaters refused to screen it.
“Why should we invest in marketing, staffing, and operations for a film that’ll be on Netflix in two months?” asked Regal Cinemas CEO Krishna Manda in 2022. “We can’t compete with $10/month access.”
The financial math is real. Theaters typically keep about 40–50% of box office revenue during a film’s opening weeks. But if that film is only in theaters for a short time, its return on investment shrinks.
Moreover, theaters depend on blockbusters to drive foot traffic. A single hit can boost concession sales, memberships, and loyalty. But if audiences know a film will be on Netflix soon, they have little incentive to pay $15 for a ticket.
This creates a lose-lose scenario: theaters lose revenue, and Netflix films lose cultural momentum.
There’s also a branding issue. Netflix is seen as a home entertainment brand—not a theatrical one. Its marketing emphasizes binge-watching, comfort, and accessibility. This works for series, but not for event films.
“When you think of ‘movie night,’ you don’t think of Netflix in theaters,” says branding expert Lila Chen. “You think of popcorn, trailers, IMAX. That’s why Netflix films often feel ‘lighter’—they’re designed for passive viewing, not celebration.”
And then there’s the Oscars.
Netflix has invested heavily in awards campaigns, spending up to $25 million on The Power of the Dog’s Oscar push. It has won major awards, but still faces skepticism.
“Netflix films win, but they don’t feel like Oscar films,” says film historian David Kipen. “There’s a lack of ceremonial buildup—no months of limited releases, no critical discourse building in theaters. It feels transactional.”
This perception matters because awards aren’t just about prestige; they drive subscriber engagement. A Best Picture win can boost viewership by 70%, according to Netflix data.
But that boost is fleeting if the film lacks lasting cultural staying power.
The Box Office Backlash: Why Theaters Fear Streaming
The tension between Netflix and theaters isn’t just about money—it’s about power.
For over a century, studios controlled distribution. They decided which films got made, how they were marketed, and when they reached audiences. Theaters were partners, but ultimately, they were middlemen—dependent on studio supply.
Now, with Netflix, Amazon, and Apple producing and distributing their own content, the balance has shifted.
“The studios used to need us,” said Fithian. “Now, streaming platforms don’t even need studios. They can cut out the entire chain.”
This fear is not unfounded.
In 2023, Netflix spent $17 billion on content—more than any single studio. It owns a vast library, controls its own algorithms, and delivers content directly to consumers. Theaters are no longer gatekeepers; they’re optional.
This threatens the entire exhibition ecosystem.
“If every major film debuts on streaming day-and-date,” warned AMC CEO Adam Aron, “theater chains will go dark. We can’t survive on indies and re-releases.”
And yet, theaters aren’t powerless.
They still control the biggest screens, the best sound systems, and the only legal way to see a film in a communal setting. They also have loyalty programs, premium formats (IMAX, Dolby Cinema), and partnerships with studios.
But cooperation requires compromise.
In recent years, NATO and streamers have begun talks. In 2023, Warner Bros. struck a deal with Netflix to license its older films, while Paramount signed a similar agreement. Meanwhile, Netflix has quietly engaged in negotiations with AMC and Regal about potential theatrical partnerships.
“The door is open,” Fithian repeated. “But Netflix has to walk through it on reasonable terms.”
What might those terms look like? Industry experts suggest a 30–45 day theatrical window for Netflix’s major releases, with revenue-sharing models and joint marketing efforts.
It’s not about reverting to the past—it’s about creating a new model.
The Turning Point: “The Door Is Open” — A Message from the Trade Group
John Fithian’s declaration in early 2024—“The door is open”—was more than a soundbite. It was a strategic pivot, a recognition that survival requires adaptation.
For years, NATO positioned itself as a defender of the theatrical model, resisting any erosion of the 90-day window. But the landscape has changed. Streaming is here to stay. Theaters no longer have the power to exclude—it’s time to include.
Fithian’s message was clear: Netflix is not the enemy. Its films have merit. Its audience is vast. And if Netflix wants to play by fair rules, NATO will welcome them.
“We’re not asking for perfection,” he said. “We’re asking for a partnership. Show your films in theaters first. Give us time to build an audience. Then release them on Netflix. That’s how the ecosystem works.”
This openness reflects broader industry trends. In 2023, Disney shortened its theatrical window from 90 to 45 days. Universal agreed to 17-day windows for premium video on demand. Even Apple, once a theatrical holdout, released Killers of the Flower Moon in theaters for 45 days before Apple TV+.
The old rules are fading. Flexibility is the new currency.
For Netflix, this creates an opportunity.
By embracing theatrical releases—even limited ones—Netflix can gain:
- Credibility: Films validated through box office performance and critical discourse.
- Buzz: Word-of-mouth momentum that algorithms can’t generate.
- Awards eligibility: Stronger chances at Oscars and Golden Globes.
- Prestige partnerships: Collaborations with A-list directors who value the big screen.
- Hybrid revenue: Box office income plus subscriber acquisition.
But there are risks.
A theatrical flop could damage investor confidence. High marketing costs might not pay off. And if a film leaks or is pirated early, the entire window collapses.
Still, the potential rewards may outweigh the risks.
Case Studies: When Streaming and Cinemas Cooperate
There are precedents for successful streaming-theater partnerships.
- CODA(2021) – Apple TV+
Apple’s CODA premiered at Sundance, received a limited theatrical release, and then moved to Apple TV+. It earned $16 million in theaters, won the Academy Award for Best Picture, and boosted Apple TV+ subscriptions by 35%. Apple credited the theatrical run for the film’s success.
- Spencer(2021) – Neon & HBO Max
Distributed by Neon and released by HBO Max, Spencer had a 45-day theatrical window. It earned $14 million globally and earned Kristen Stewart an Oscar nomination. The staggered release built anticipation and critical buzz.
- The Batman(2022) – Warner Bros. & HBO Max
After a disastrous same-day release in 2021, Warner Bros. reverted to a 45-day window for The Batman. The film earned $772 million worldwide and was hailed as a theatrical triumph. HBO Max gained subscribers post-theatrical release.
These cases show that hybrid models work—when done right.
Netflix could replicate this with films like The Mother or future Scorsese projects. A 30-day window, coupled with strategic marketing, could turn a Netflix film into a true event.
The Economics of Exhibition: Who Makes the Money?
Theater chains make money from tickets and concessions. A typical theater keeps 40–50% of ticket sales in the first weeks, declining over time. Concessions, with 85% profit margins, are crucial.
But they pay high rent, maintenance, and labor costs. Without major releases, they can’t survive.
Streaming platforms make money from subscriptions and ads. Netflix’s model relies on content driving sign-ups and reducing churn.
A partnership could create shared incentives—e.g., revenue-sharing, co-branded promotions, or loyalty points redeemable on Netflix.
This isn’t fantasy. Disney offers Disney+ bundles with theater tickets. AMC’s Stubs program integrates with streaming data.
The infrastructure for collaboration exists. The will is the missing piece.
Creative Tensions: Filmmakers, Studios, and Audience Expectations
Directors like Scorsese and Cuarón want their films seen in theaters. But they also appreciate Netflix’s creative freedom and global reach.
“The issue isn’t streaming,” Scorsese said. “It’s the devaluation of cinema as art.”
Audiences are equally divided. Some want convenience. Others crave experience.
Netflix must balance these needs—producing films that satisfy both artistic and commercial goals.
