Amid the increasingly caustic back and forth between Netflix and Paramount over who should own the iconic Warner Bros. Studios, principals from Netflix and Warner Bros. were summoned yesterday to the Senate Judiciary Antitrust Subcommittee to make the case as to why this transaction should go through.
Congress has no direct authority to approve these types of deals, but they can make their feelings known, and that does matter. Of particular interest to the people who own and operate theatres of all sizes across the United States and around the world was the Netflix statement that “We will put Warner Bros. movies in theatres with 45-day windows.” This is a marked evolution for the global streamer that not so many months ago had decried movie theatres as “outdated.” One suspects that this is, in part, to ease approval of the pending deal, but also a recognition of the fact that movies that start in theatrical do better on subsequent platforms, including Netflix. But more important than what Netflix said in Washington, D.C., is what it has not said.
Netflix has given no indication how many “Warner Bros.” movies it intends to make each year, or how many are for wide release in 2,000 locations or more. Nor has it signalled how many “straight-to-streaming” movies that Warner Bros. will produce annually and how that will impact resources and expertise now dedicated to theatrical movies.
Netflix made no mention of the need to promote the Warner Bros. movies that it will make. Having committed to releasing movies theatrically, will Netflix support those movies financially with strong “Only in Theaters” marketing campaigns?
And what does a 45-day window truly mean? This is a critical question and one that goes to the core of full commitment to theatrical. Netflix could simply take movies directly from the theatre to its own platform, skipping completely the Premium Video On-Demand (PVOD) window, when consumers can rent or purchase a film to view in their home. Exhibition is already feeling the impact of shrinking theatrical windows that rush movies into PVOD in a matter of weeks. The industry, including some studios, is starting to realize the harm caused by shorter windows. But 45 days to Subscription Video On-Demand (SVOD) is vastly different, and significantly more harmful, than 45 days to PVOD. The average SVOD window for wide theatrical releases today is 102 days. Should this transaction result in movies going directly from the theatre to Netflix, the 45-day window that is now being heralded would devastate the industry.
To be clear, we would ask similar questions of Paramount. Our preference would be for the talented movie-making team at Warner Bros. to operate as a freestanding studio. That would be best for theatres, people who love seeing movies on the big screen and the entire movie industry. If, however, this iconic studio is once again sold, it is imperative to get answers to these questions. Sometimes what you don’t hear is as important as what you do.
Michael O’Leary is the President and CEO of Cinema United, the largest film exhibition trade organization in the world, representing more than 31,000 movie screens across all 50 states, and over 30,000 additional screens in 80 countries worldwide.
Love Film & TV?
Get your daily dose of everything happening in music, film and TV in Australia and abroad.
From Variety US