Netflix CEO thinks studios could die if theaters remain a priority

Last Updated on July 30, 2021

Few global events have been more kind to streaming services than the coronavirus pandemic. With so many theaters down for the count for months on end, platforms like Netflix, Disney+, Amazon Prime, Hulu, and HBO Max have reigned supreme when it comes to keeping people entertained. While some would argue that theaters are a necessary component to the success of major motion pictures, Netflix Co-CEO Ted Sarandos thinks that the future of film distribution needs to be reevaluated.

Recently while speaking with KCRW (via The Playlist), Sarandos, who is a big fan of movie theaters, believes studios need to re-think their release strategies if they hope to survive our current circumstances. In short, Sarandos says that consumers don't care where they watch movies so long as the content is good. If they see it in a theater, that's awesome. If it happens to premiere on a streaming service, that's great too. The fact is that theaters are not operating at full capacity right now, and some people are terrified to return to a public space, vaccinated or not. It's a reality that the pandemic has changed the way people feel about gatherings, and it could be a long time before audiences are ready to pack theaters like they used to.

"You’ve got to follow the audience,” Sarandos explained. “And if the audience isn’t showing up [to theaters], and they’re showing up watching at home, you have to adapt. Seeing a movie in a theater might just become rarer. It’s a very hard thing to figure out what post-pandemic behaviors will be and how they shift. There’s a big financial infrastructure required to support screens that have to ultimately be supported by the fans and the viewers.”

In other words, studios might soon be faced with a "survival of the fittest" situation and will have to adapt to the changing times.

“When businesses change, when consumer behavior changes radically, how you navigate those waters is so hard,” Sarandos said. “You might say that not being diversified in our business approach is a challenge. But it’s actually been such a blessing that we’ve not had to try to save a business. Once your primary role is trying to save a business, you’re dead.”

He added, “Remember, we made the transition from DVD to streaming. We never spent a minute trying to save the DVD business. Our future was always going to be in streaming, and any energy we spent trying to save the DVD business was an energy that wasn’t being spent trying to create the streaming business. Putting the consumer first was really important. Once you see that happening, you’ve got to go all in.”

Again, Sarandos is not saying that movies should skip theaters, but that simultaneous releases on streaming might be Hollywood's saving grace. Releasing content across both platforms provides audiences with options, and investors are still seeing returns under this strategy. Releasing films in theaters and on streaming creates a bridge between both parties, and social media allows for everyone to be a part of the conversation. It's not a terrible compromise, at least for the time being. You know, until things level out.

“People just want to watch new movies, and they won’t have access to them,” he said. “And most people don’t even have a theater in their neighborhood.”

What do you think of Sarandos's position? Is his view biased AF or is he actually talking sense? Do you feel safe returning to a theater or are you down to spend the next little while watching new films via streaming services? Let us know what you think about all of this in the comments section below.