Netflix's Warner Bros. Bid Threatens Cinema's Future

Netflix's bid to acquire Warner Bros. Discovery Inc. is raising concerns within the beleaguered movie theater industry, which is still recovering from the impacts of the pandemic and Hollywood strikes. Experts fear that Netflix's potential ownership could lead to shorter theatrical release windows, a move that could significantly jeopardize the sector.

Despite Netflix vowing to keep films in theaters for 45 days, critics argue this does not signal a substantial commitment to theatrical exhibition. The US box office is forecast to grow to $9.7 billion by 2026, but this recovery could be hindered by a media giant reshaping film distribution. Trade groups have warned officials on both sides of the Atlantic about the potential stifling of blockbuster movie releases.

Warner Bros. typically releases 15 to 20 major films annually, with half grossing over $100 million. A shortened theatrical window could affect a substantial portion of these significant releases. Additionally, uncertainty remains regarding whether Netflix will opt for a premium video on demand model or direct subscription streaming for films post-theatrical release, potentially training audiences to wait for home viewing.

The cinema industry is grappling with a 30% drop in attendance since the pandemic, coupled with increased prices and operating costs. Younger demographics are reportedly shunning cinemas, further pressuring the market. In response, theaters are implementing premiumization strategies like reclining seats and immersive sensory experiences, and diversifying revenue streams by renting space for events and offering alternative content such as live-streamed opera.