The Great Netflix Debate: Do Its Movies Belong in Theaters?

Inside Netflix's movie studio, top executives lobbied Ted Sarandos, the company's co-chief executive, for much of this year to experiment with releasing more Netflix original movies broadly in theaters WSJ is reporting. From the report: They outlined their case in a memo shared in June on the company network. Some argued that Netflix is leaving hundreds of millions in box-office receipts on the table with its current strategy of showing only select movies in a few hundred theaters for at most a few weeks before streaming them, according to people familiar with the matter. Other executives thought showing movies in more theaters would create valuable buzz for the streaming service. Soon after, in an internal meeting, Mr. Sarandos told Netflix studio leaders that he had doubts, and still felt that streaming is the future of entertainment, movies included. Instead, he suggested that studio chief Scott Stuber and other executives meet with their counterparts at Sony Pictures Entertainment to see if they would agree to let Netflix stream Sony's movies just four to six weeks after they came out in theaters, instead of after six to eight months, as spelled out in a partnership the two studios reached last year. If a new deal could be struck, some executives said, it would help Netflix understand how the company might benefit from streaming a movie shortly after it had been shown on thousands of big screens across the country. The debate inside Netflix over how best to distribute its films -- details of which haven't been previously reported -- is one that is playing out across an entertainment industry that has been rapidly upended by the rise of streaming video. Every major company in Hollywood is facing some version of the same question: What is the best way to release a movie? Is it in a cinema, with stadium seating, popcorn and digital surround sound? Or is it at home, streamed on a flat-screen TV or a laptop? Should movies go to theaters first, then to streaming, or should they be released at the same time? How long should a studio wait between theatrical and streaming release? How many theaters should show a film? Should all movies go to the big screen, or just splashy action thrillers?

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