Ted Sarandos Says He Wants to “Win ​​Box Office.” Reed Hastings Doesn’t Sound So Sure

Netflix has never really been in the theatrical film business.

Sure, the streaming giant releases some films in a limited number of theaters to ensure awards eligibility, and certain filmmakers have been able to extract larger and more elaborate theatrical campaigns, but the company isn’t in the business of massive marketing campaigns for an exclusive (and long!) theatrical window.

That has changed in the last month, with co-CEOs Ted Sarandos and Greg Peters telling journalists and Wall Street analysts that, once the deal to acquire Warner Bros. is done, the company will be all-in on theatrical.

Sarandos doubled down on those comments in a New York Times interview published Friday.

“When this deal closes, we will own a theatrical distribution engine that is phenomenal and produces billions of dollars of theatrical revenue that we don’t want to put at risk,” Sarandos said. “We will run that business largely like it is today, with 45-day windows. I’m giving you a hard number.

“If we’re going to be in the theatrical business, and we are, we’re competitive people — we want to win,” he added. “I want to win opening weekend. I want to win box office.”

It is a sharp contrast to prior comments from Sarandos, including on the investor call to formally unveil the Warners deal, where he said “my pushback has been mostly in the fact of the long, exclusive windows, which we don’t really think are that consumer friendly.” But it is a contrast that seems designed to try and win the hearts and minds of Hollywood creatives.

Sarandos’ pivot on theatrical windows is also contrasted by new comments from Netflix founder and chairman Reed Hastings on a recent podcast interview. Hastings was interviewed for the Jan. 6 episodes of the podcast Invest Like the Best, outlining his unique corporate philosophy, his ski mountain, and his time at Netflix.

And during that interview, he specifically cited theatrical as an area that was outside of Netflix’s core business model. Hastings was asked what lessons he had as an executive from his time on the corporate boards of companies like Facebook and Microsoft.

“As a CEO at Netflix, I learned so much being on the boards of Microsoft and Facebook. They had quite different businesses, but they made very interesting trade offs the way they thought about things,” Hastings said. “I mean, both of them were very long-term oriented in what they thought. They were willing to lose money in certain new areas for a decade. What I loved about looking at Facebook’s business was, ad supported and everything they did that was on the core, like Instagram, worked incredibly well. And when they tried to do crypto, or when they tried to do other things that were not big ad-supported businesses, it didn’t work well.

“Companies get good at something, and then if you can add to the core mechanism, that’s great,” he added. “So we’ve always wanted to add content to the Netflix subscription to make it more and more useful, more and more enjoyable, but kind of keep it like one big model, as opposed to also do theatrical movies or also do something else as a way to expand revenue.”

Now, of course, with its $82.7 billion for Warner Bros., Netflix is ​​prepared to go all-in on theatrical, despite the risk of pushing outside of its comfort zone.

Hastings, it should be noted, has not commented publicly on the deal (he doesn’t address it directly in the podcast, and it is not entirely clear when it was taped), but as chairman of Netflix, he has signed off on it (the company said that its board was “unanimous” in approving the transaction).

But the executive also has a history of not being too stubborn to change. He was the one, after all, who announced that Netflix would get into the advertising business after saying for years that it wasn’t core. And Netflix has also pursued video games and live sports despite previously staying out of those areas.

Hastings may not have been sold on theatrical before, but maybe Warners can change his mind.