“You know how you can tell if you have a good friend in Hollywood? They stab you in the chest. Because everybody else is going to stab you in the back, baby.” - Stanley B. Gill
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NOTE 1: Hope you are all having a great week :) I apologize for publishing this late -- work has been crazy, and I got distracted.
NOTE 2: I am still chipping away at my upcoming ‘love letter to late night horror screenings.
On the evening of January 22, 2024, Netflix made the unexpected announcement that Scott Stuber, Chairman of the Film Division, would be departing in March. This sudden departure sent a strong message regarding his approach to theatrical strategies and the direction of Netflix's business strategy under the leadership of Ted Sarandos, CEO.
Initially, the move appeared perplexing. After all, in 2017, Stuber spearheaded the establishment of Netflix's original filmmaking division, ushering in a new era for the streaming giant. More recently, Stuber and Ted Sarandos unveiled Netflix's involvement in the renovation of the Egyptian Theater, signaling a commitment to the theater industry.
However, there seemed to be more to the situation than meets the eye, as recent revelations left many puzzled. Perhaps, in reality, the entire scenario better fits the description of a "glass onion" – something that is multi-layered yet completely transparent.
The Glass Onion Incident
When Rian Johnson presented the polished script "Glass Onion: A Knives Out Mystery" to Scott Stuber's desk in early 2020, Stuber couldn't have been more thrilled. Holding the sequel to the box office hit "Knives Out," Stuber's primary concern was securing a theatrical release for the film.
In 2019, "Knives Out" was distributed by Lionsgate and achieved global earnings exceeding $300 million, with a theatrical release in over 3,000 theaters across the U.S. and Canada.
Fast forward to 2022, and Netflix began to recognize the potential of "Glass Onion" as a unique test case: an exclusive theatrical release for a highly anticipated film that could drive up Netflix's subscriber count, as viewers would turn to the platform to rewatch the film or similar content. Stuber initiated discussions with executives from various theater chains, and one thing was on this guy’s mind: this was a NETFLIX original film made for the THEATERS.
However, Stuber encountered resistance from Netflix CEO, Ted Sarandos. In October of that year, Sarandos drew the ire of theater owners with comments made during an earnings call, reaffirming Netflix's commitment to a non-theatrical strategy. Sarandos stated, "We make our movies for our members, and we really want them to see them on Netflix." This stance posed a significant obstacle for Stuber's aspirations for "Glass Onion."
Ultimately, Netflix provided only a week-long theatrical release window for the film, limited to 700 theaters. While "Glass Onion" performed exceptionally during its brief theatrical run, grossing approximately $13.3 million during its opening weekend, its potential for wider success was hindered by the shortened window.
David A. Gross of Franchise Entertainment Research noted that wide releases typically maximize revenue from their top 1,000 screens, suggesting that with a broader marketing campaign and wider release, "Glass Onion" could have grossed $300 million worldwide.
However, the film's theatrical window was abruptly terminated, with Netflix promptly shelving it on its platform. This experience underscored for Scott Stuber that Netflix remained primarily a streaming service, regardless of his efforts to secure theatrical distribution for its content.
This served as an excellent case study highlighting the resilience of theatrical releases compared to straight-to-streaming. However, Ted Sarandos has been unequivocal: Netflix prioritizes growing its subscriber count over selling movie tickets at theaters.
The Core Of It All
Take a glance around, and you'll notice Apple Films, Amazon Studios, and MGM are all advocating for wide theatrical releases of their films before transitioning to their streaming platforms. For instance, "Napoleon" received a wide release from Apple Films, reaching 3,000 theaters. In contrast, Netflix's "The Irishman" directed by Martin Scorsese had a three-week theatrical window in fewer than 700 theaters. Even Netflix's second widest theatrical release to date, Zack Snyder's "Army of the Dead," was only in 600 theaters a week before its exclusive Netflix debut.
It's evident that Netflix's primary focus lies in streaming. But how did this strategy negatively impact Stuber? Consider the current landscape: A-list talent is increasingly seeking theatrical releases, and Apple Films and Amazon Studios are fulfilling this demand. Stuber found himself unable to compete for top-tier movie packages, blockbuster films, and exceptional scripts because many talents prefer traditional theatrical releases over straight-to-streaming. Mystery solved.
As The Hollywood Reporter highlighted, "One veteran studio executive asserts that this policy places Netflix at a significant competitive disadvantage. Movies undeniably have a greater impact when released in theaters, and filmmakers are weary of creating content for streaming platforms that simply evaporates."
Where will Scott Stuber find himself come March? Only time will tell. But for now, he appears to be making a definitive choice: favoring one distribution method over the other. Ambler's Cut poses the question: Is this decision conducive to long-term success? Will theaters remain relevant, or will industry consolidation and complacency lead audiences solely to the familiar Netflix login screen?
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