00:00Well, let's turn back to shares of Netflix falling after reporting earnings at the top of the hour, currently down about 5% after hours.
00:07Our next guest says, quote, we need studios, particularly streaming focus players like Netflix, committed to a robust slate of theatrical films.
00:16Joining us live, I'm pleased to say we have Paul Daguerrebedian.
00:19He is senior media analyst over at Comscore.
00:23Paul, it's great to have you with us.
00:24And an interesting moment, too, because there are a lot of concerns as to whether or not Netflix is committed to the theater, to those theatrical releases.
00:33And I wonder if that's a concern that you share.
00:36I do.
00:37And I'm hoping that given the success of Warner Brothers in 2025, which was built on the back of their theatrical slate, which was so amazing.
00:46I mean, the top grossing movie of the year, a Minecraft movie that's a Warner Brothers film.
00:51Fast forward towards the end of the year, one battle after another, another Warner Brothers film, which is a major awards contender.
00:58And they're responsible for $4.4 billion in global theatrical revenue, Warner Brothers.
01:04That's about 13.2% of the global $32 billion in theatrical box office.
01:11So we just want to see that continue.
01:13And as Netflix, as a streaming service primarily, I think the concern is, is that the focus or will they, I hope, realize there's a huge value in having Warner Brothers as a perfect partner, as a theatrical engine, if you will, putting movies into the marketplace that people can see on the big screen.
01:36That adds to their value once they wind up on the small screen.
01:41Well, Netflix would say, and their co-CEO has said that, you know, it doesn't, it's not that they don't like theaters.
01:47That narrative doesn't really hold water with them.
01:49But that basically that they want to shorten the release window, that they don't think that long, exclusive theatrical runs for movies are consumer friendly.
01:58And, you know, if we do enter into that world where, you know, Netflix through Warner Brothers is still releasing movies, but for longer period or for shorter periods of time in the theaters, how does that sort of change the environment in your view?
02:11That's huge.
02:12I mean, that's, that's the big factor here.
02:14Look, a long theatrical window.
02:16Look, it has to be reasonable.
02:17I'm not saying it should be, you know, 120 days or something like that.
02:21But I think a theatrical window that inspires people to go to the theater, the movie builds buzz.
02:27Look at The Housemaid, for example, and Zootopia 2.
02:31Those films have been in the marketplace for weeks and weeks.
02:34Zootopia 2, almost coming up on nine weeks in the theater.
02:37The Housemaid, five, six weeks in theater, still going strong, still top five movies at the box office.
02:44So I just think there needs to be a recognition that a window where the consumer, we, understand that if we need to go see that in a theater, eventually it'll wind up on streaming.
02:54But too short of a window, a lot of people might wait.
02:57I think that lowers the perception of the prestige factor of these movies.
03:03And then again, when they wind up on streaming or on the small screen, movies that, when The Housemaid, Zootopia 2, finally hit streaming, they're going to blow up huge because of that, you know, that buildup, that long tail, if you will, of their theatrical release.
03:17There's a big question, though, Paul, when we talk about just the future of movies, or at least of theatrical movie releases, the idea that, as we've known for quite some time, you know, the big budget, the blockbuster, tentpole movies, they still do well at the theaters.
03:30Those sort of indie, prestige type of movies, not so well.
03:34And in fact, that's been the bread and butter for Netflix and some of the streaming services, kind of taking that pie there.
03:39I guess the question is, what's the balance?
03:41If for some reason they were to acquire Warner Brothers Discovery, why even make the commitment across the board, blanketly, for theatrical release?
03:48Just say, look, OK, when the next big superhero movie or whatever Warner Brothers has comes out, we'll put it in the theaters.
03:53But if it's something less than that, we don't.
03:55Well, that's a great question, Romain, because if you look at a movie like Marty Supreme, that's a movie that is more of an independent type of movie, as opposed to a giant blockbuster that's known IP.
04:08I think it's really the decision makers in these companies who have to decide, like, is the spend on marketing to go into theater worth it at the end of the day?
04:19And will they get more from a movie ultimately all in if they go theatrical first?
04:24But it really depends on the movie and the marketing and, of course, budgets matter, because a lot of these films, these blockbusters, their ROIs is, you know, it's very difficult to get there with some of these movies having these enormous budgets.
04:40So I think that's going to be.
04:41But look, I'll go back to this.
04:42If you look at what Warner Brothers did in 25, that's a blueprint for success, starting with Sinners.
04:49That was a huge, well, really a Minecraft movie.
04:52Then Sinners, F1, Superman, Weapons, One Battle After Another, all these huge films from Warner Brothers.
04:59They did a great job.
05:01I think let's just keep that going.
05:03You can learn a lot from what Warner's did.
05:05And if Netflix indeed wants to continue the theatrical success, go with the formula created in 2025 by the Warner's marketing and distribution teams.
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