By Gavin Boyle
Despite a handful of releases coming to theaters in the upcoming months, Netflix co-CEO Ted Sarandos emphasized that the streamer remains committed to its streaming first mentality for the sake of its subscribers.
“There’s no change in the strategy,” Sarandos said during a Q3 earnings call when asked about Netflix’s approach to theatrical releases. “Our strategy is to give our members exclusive first-run movies on Netflix.”
The question comes after the streamer notched its first No. 1 movie at the weekend box office in August with KPOP DEMON HUNTERS. The movie had previously enjoyed extreme popularity on Netflix, and Sarandos believes the movie’s success in theaters was fully attributed to its time streaming.
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“That ease and value that allowed folks to repeat view it, the ubiquity of distribution, which took all the guess work of how to watch it when it showed up in your social media feed, all of this contributes to DEMON HUNTERS blowing up all over the world, and I would argue in a way that it wouldn’t happen anywhere else,” Sarandos said. “If anything, this actually reinforced our strategy, because being on Netflix actually allowed the film to build momentum.”
Nonetheless, Netflix has multiple movies coming to theaters in the coming months including, WAKE UP DEAD MAN: A KNIVES OUT MYSTERY, FRANKENSTEIN, Greta Gerwig’s NARNIA, and the series finale for STRANGER THINGS.
While Netflix remains the largest streamer subscription wise, it cannot afford to lose its focus and shift towards a weaker strategy. During the same earnings call that Sarandos reaffirmed Netflix’s dedication to streaming over theaters, the company unveiled weaker than expected results, which led to a 10% drop in the company’s stock price.
The drop came despite the platform recording its best ad sales ever, setting the company to more than double its ad revenue from 2024. The company, however, is facing unexpected taxes in Brazil which ate into its revenue during the quarter – leading to falling stock price.
“It’s not a tax that’s specific to Netflix. It’s not even specific to streaming,” explained Chief Financial Officer Spence Neumann. “Absent this expense, we would have exceeded our Q325 operating income and operating margin forecast, and we don’t expect this matter to have a material impact on our results going forward.”
As Netflix continues to largely define the strategy taken be all of its competitors, it is interesting to see it continue to focus on streaming first, rather than trying to shift into the theater business and compete at the box office with the legacy studios.
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