Why Netflix Might Need to Change Its Film Distribution Strategy

\ For years, Netflix built a reputation as a haven for movie makers seeking artistic freedom – the New Hollywood alternative to the way traditional studios created and distributed movies. Netflix’s approach, prioritizing streaming with some limited theatrical runs, attracted auteurs like Martin Scorsese and Alfonso Cuarón, who sought backing for riskier projects.

\ But this model is now facing pushback from filmmakers who see the potential for box office success.

Netflix’s current model consists of either streaming movies out of the gate or in a few cases exhibiting them in theaters for very limited runs. Of course, once a movie goes exclusively to streaming, filmmakers lose out on box-office revenues they would earn when movies play in theaters. This model was sorely tested in 2022 with the release of Glass Onion: A Knives Out Mystery.

\ The sequel to the popular Benoit Blanc mystery Knives Out, Glass Onion was distributed by Netflix through three major Old Hollywood theater chains, AMC, Cinemark, and Regal. The movie ran for one week, followed by a blackout period, and then a streaming premiere on Netflix on December 23.

\ Glass Onion: A Knives Out Mystery was a hit  during its one-week showing in only 638 theaters. Box office analysts said it could have earned perhaps hundreds of millions of dollars had it stayed in theaters longer than a week. Jeff Bock, a senior media analyst at Exhibitor Relations, told The Los Angeles Times, “This is probably one of the biggest gaffes in modern film release history in terms of bungling what could have been made at the box office with ‘Glass Onion.’

\ Daniel Craig, the principal star of Glass Onion, was also harshly critical of Netflix for not capitalizing on the movie’s box office potential.

\ Fast-forward to 2024, and Netflix finds its model being challenged again. Margot Robbie and Greta Gerwig are both involved in high-profile projects that highlight their desire for theatrical releases, pushing back against Netflix’s typical streaming-first model.

Margot Robbie, alongside director Emerald Fennell, turned down a massive $150 million offer from Netflix for their upcoming adaptation of Wuthering Heights. The decision stems from their commitment to a theatrical release, which they believe is essential for the film’s cultural impact. Robbie, who is also producing the film through her company LuckyChap, has seen the success of theatrical releases firsthand with Barbie, which became a cultural phenomenon.

\ Rejecting Netflix’s offer in favor of a theatrical release, likely through Warner Bros., demonstrates their belief that a cinema-first approach will ultimately yield more long-term success and cultural relevance.

And team Barbie isn’t done with Netflix. Greta Gertwig, who directed Barbie, is under contract with Netflix to direct two films in The Chronicles of Narnia series. She is advocating for a theatrical release on IMAX screens before the films debut on Netflix. Gerwig’s push comes after the massive success of Barbie, and she is reportedly in talks with IMAX to secure a three-to-five week exclusive theatrical window for Narnia, potentially releasing around Thanksgiving 2026. Reportedly, Netflix is more open to making concessions for Gerwig’s project given her influence and the scope of the Narnia series. Given her clout, she will get her way.

This kind of pushback is a problem also because other streaming platforms, are happy to be more flexible by giving filmmakers a larger window to distribute movies before going to streaming.

\ For example, Max, part of Warner Bros. Discovery, takes a more hybrid approach. While it also focuses heavily on streaming content, Max has shown more willingness to embrace traditional theatrical releases for certain films, especially those with blockbuster potential. Warner Bros., the parent company, has a long history in theatrical distribution, and this legacy influences how Max handles major releases. For instance, Warner Bros. Discovery has released films like Barbie and Dune in theaters before making them available on Max.

\ This strategy allows Max to capitalize on box office revenue while building buzz for a film’s eventual availability via streaming.

\ Netflix is sitting pretty right now with its stock valuation soaring. But to remain competitive in the war for big-name talent, the New Hollywood leader may need to be willing to emulate the hybrid approach. The Netflix way has worked well for riskier prestige productions with a more narrowly defined audience. But that was then. Margot Robbie and Greta Gerwig are now. And the future. Will Netflix adapt?