Netflix wants to get into the movie theater business, according to a new report from The Los Angeles Times. Anonymous sources told the paper that the Los Gatos-based entertainment giant pursued a deal to buy the Mark Cuban-owned Landmark Theaters but ultimately backed out due to a high sale price. While it might sound wild that a company that got its start sending DVDs by mail now wants to sell popcorn and movie tickets, the idea actually makes a lot of sense.
Look at it this way: Last year, Netflix spent over $8 billion producing its own content—movies and TV shows that can only be watched on Netflix—but the fact that there are no theater runs for the feature films disqualifies Netflix from winning major awards like an Oscar. This is a big deal for Netflix, which said it would release 80 movies in 2018 alone, not only because Oscars are prestigious but also because prestige wins new customers. No awards might also discourage talented people from signing up for a Netflix flick, since they could be winning awards with other projects.
“We want our films to be on fair ground with every other filmmaker,” Netflix chief content officer Ted Sarandos recently told Variety. “There’s a risk in us going in this way and having our films and filmmakers treated disrespectfully at the festival.”
That’s only part of the equation, though. Netflix is also leaving a lot of money on the table, when its films can’t be shown in theaters. The theater lockout isn’t just because Netflix is Netflix, either. Sarandos and his Netflix buds won’t budge on their idea that movies should be released on streaming services the same day they’re released in theaters. Theaters won’t agree to this, thus no Netflix movies in theaters. If Netflix owned its own theaters, however, the company could do a big theatrical release for those who love the big screen and a streaming release for lazy people who love convenience.
But wait, there’s more. Owning and operating movie theaters also means you can sell concessions—in some states, that includes food and alcohol—to movie-goers. Netflix could also woo its subscribers into the seats by offering discounts on tickets and food. That would also become an incentive for more people to pay for Netflix subscriptions.
If you’re thinking that no fool would pay money to see a movie they could watch at home through their Netflix subscription, you’re being closed-minded. Sometimes it’s just more fun to go to the theater, and oftentimes, watching movies on the big screen is a far superior experience than watching it on your flatscreen TV. Heck, Netflix could even offer binge-watching sessions and screen its very good shows. Have you ever seen Altered Carbon, a show that is one of the most expensive and visually stunning shows ever? That would look amazing in the theater!
No matter what happens, Netflix will be fine. The company pulled in $2.67 billion in revenue last year, including a $66 million profit. Maybe it will spend some of that cash on some brick-and-mortar theaters. Maybe Netflix will just keep making great content and not worry about awards. Or maybe we’ll all be watching movies through virtual reality headsets soon, and nothing will even matter.