Netflix’s $82.7B WB Deal Puts Cinemas on Edge

After months of whispers and industry chatter, Warner Bros has finally landed a buyer. Netflix is set to snap up the iconic studio for a staggering $82.7 billion, taking control of both its film and television arms. With Warner Bros’ productions being a mainstay for cinemas, it’s no wonder there’s a bit of anxiety about what comes next, especially considering Netflix boss Ted Sarandos’ previous comments about the big screen experience.

Shorter Cinema Runs on the Cards?

While Sarandos has assured everyone that films from the storied studio will still make it to cinemas, he’s not a fan of the long exclusive windows that have been the norm. Speaking to investors, he said,

It’s not like we have this opposition to movies into theaters. My pushback has been mostly in the fact of the long exclusive windows, which we don’t really think are that consumer-friendly

He’s not planning to overhaul Warner Bros’ cinema-first approach straight away, but hinted that things could shift in the future. The implication is clear: those lengthy cinema runs might be on borrowed time.

Changing the Game for Release Windows

Last year was a standout for Warner Bros, with a string of box office hits despite a few disappointments like Bong Joon Ho’s Mickey 17 and PTA’s One Battle After Another. Even so, the days of traditional release windows could be numbered. Sarandos explained that, over time, he expects the system to become more “consumer-friendly”—in other words, more in favour of streaming.

I wouldn’t look at this as a change in approach for Netflix movies or for Warner movies. I think, over time, the windows will evolve to be much more consumer friendly, to be able to meet the audience where they are quicker.

For now, punters can still look forward to seeing Warner Bros’ upcoming films on the big screen, but there’s a sense that the old ways might not last forever.

Box Office Blues for Cinemas?

Warner Bros has long been a pillar for cinemas, making up about a quarter of the annual box office takings. With theatres still struggling to bounce back to pre-pandemic numbers, losing those big releases would be a real blow. Michael O’Leary, head of Cinema United, didn’t mince words about the potential fallout, saying the merger could spell trouble for everyone from major chains to small-town independents.

The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world… Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite. Regulators must look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition and the entertainment industry.

What happens next is anyone’s guess, but there’s a fair bit of concern that the classic cinema experience could be under threat in the years ahead.