Netflix Spent Years Debating Theatrical Movie Releases, Then the Warner Bros. Came Along

Netflix wants everyone to know it wasn’t anti-theater. It was just busy. That’s the new line coming straight from the top, as the company finally admits it had long debated launching a theatrical movie business, but never bothered to actually do it until the Warner Bros. Discovery deal landed in its lap.

Speaking during Netflix’s Q4 2025 earnings interview, co-CEOs Ted Sarandos and Greg Peters explained that theatrical distribution was something the company kicked around internally for years.

The problem, according to them, was that the streaming machine was growing too fast to worry about anything else. So, they saw that theatrical releases mattered, it just never mattered enough.

This is awkward timing, considering Sarandos spent part of last year publicly torching the movie theater experience. At the Time100 Summit in April 2025, he famously called communal moviegoing “an outmoded idea,” a quote that pretty much confirmed what a lot of filmmakers and theater owners already suspected about Netflix’s attitude toward cinemas.

Now that Netflix is buying a studio with a massive theatrical footprint, the tune has changed. Sarandos said:

“We were not in the theatrical business when I made those observations. Remember, I’ve said it many times, this is a business, not a religion. So conditions change. Insights change. And we have a culture that we reevaluate things when they do.”

Sarandos went on to point out Netflix’s previous pivots into areas it once claimed it had zero interest in, including advertising, sports rights, and live events. Translation: Don’t hold Netflix to anything it says today.

He also admitted this wasn’t some overnight revelation. “We debated many times over the years whether we should build a theatrical distribution engine or not. And in a world of priority-setting and constrained resources, it just didn’t make the priority cut.”

Netflix didn’t believe in theaters enough to invest in them, but it’s perfectly happy to buy an entire studio once the infrastructure already exists.

Once the Warner Bros. Discovery deal closes, Sarandos made it clear Netflix plans to keep that theatrical engine running. “We will have the benefit of a scaled, world-class theatrical distribution business with more than $4 billion of global box office. And we’re excited to maintain it and further strengthen that business.”

He’s also promised to preserve a 45-day theatrical window for Warner Bros. releases, a commitment clearly aimed at calming critics who fear Netflix will shove everything straight onto streaming.

According to Sarandos, Netflix didn’t even go into talks planning to buy. “We were not buyers,” he said. “We went into this though with our eyes open, and our minds open. And when we got into, we both got very excited about this amazing opportunity.”

Peters backed that up by saying Netflix already understood the value of theatrical releases thanks to its output deals. He called the theatrical model an “effective complement to the streaming model,” while also admitting that every time the idea of building a distribution arm came up internally, Netflix was too focused elsewhere. In other words, they knew it worked. They just didn’t want to build it.

Ironically, Netflix has already seen real theatrical success when it actually bothered to try. The New Year’s Eve theatrical run of the Stranger Things 5 finale pulled in more than $25 million at the box office, and limited releases of KPop Demon Hunters proved there’s an audience willing to leave the couch when Netflix treats theaters like something more than an afterthought.

Netflix CFO Spence Neumann framed the Warner Bros. deal as a booster rather than a reinvention. Roughly 85% of the combined Netflix and Warner Bros. Discovery revenue would still come from the core streaming business, with the studio and theatrical side acting as an accelerant rather than the main engine.

Earlier the same day, Netflix revealed it had switched its $83 billion offer to acquire Warner Bros. Discovery into an all-cash deal. That move was reportedly driven by pressure from Paramount Skydance, which is pushing a hostile takeover attempt that it claims offers better value for WBD shareholders.

Netflix and Warner Bros. Discovery expect the deal to close within 12 to 18 months, assuming regulators don’t throw up serious roadblocks.

So here we are. Netflix spent years debating theatrical releases, publicly dismissing the moviegoing experience, and telling filmmakers to accept the new normal.

Now it’s buying one of the biggest theatrical machines in Hollywood and suddenly discovering the value of a packed cinema. Funny how fast “outmoded” ideas become useful once they come with $4 billion in box office attached.

Source: Variety