Theater Owners Fear Netflix's Purchase of Warner Bros. Will Harm Their Business: 'Hoping the Deal Falls Through'

Cinema operators are expressing serious concern after Netflix revealed plans to acquire Warner Bros. for $82.7 million, a deal that still awaits regulatory approval. The merger could profoundly impact a film industry still recovering from pandemic-related setbacks, potentially leaving theaters with fewer major releases to screen.

This changes everything, said Stacey Spikes, co-founder of MoviePass. Many theater owners hope regulators block the transaction, as Warner Bros. typically releases 12 to 14 films per year that are crucial for their business.

Chris Randleman, chief revenue officer at Texas-based luxury cinema Flix Brewhouse, commented, If this deal falls through, Warners could be sold to a more suitable buyer. Hollywood talent has a role to play here no IP matters if filmmakers and stars arent willing to collaborate.

Netflix has publicly promised to continue theatrical releases. However, co-CEO Ted Sarandos, speaking to investors after the announcement, emphasized that the company intends to adjust release windows over time to better suit audience habits, hinting at shorter theatrical runs.

Exhibitors worry that shortening release windows could severely harm revenue. Eduardo Acuna, CEO of Regal Entertainment, explained, Shorter windows reduce potential box office revenue, risking theater closures, job losses, and economic harm to local businesses. Ultimately, moviegoers lose out.

Some cinema executives remain cautiously optimistic, believing that Netflixs access to Warner Bros. extensive franchises including Batman, Oceans 11, Harry Potter, and The Lord of the Rings could eventually make them appreciate the value of extended theatrical runs. Tim Richards, CEO of Vue Entertainment, said, Big hits like Barbie or Minecraft will show Netflix that cinema releases drive revenue and streaming interest simultaneously.

The theater industry has already been challenged by a reduced number of high-profile films and the consolidation of studios, such as Disneys acquisition of 21st Century Fox in 2019. Warner Bros. recent successes, with multiple blockbusters this year, have further heightened concern about the potential Netflix takeover.

While Netflix has released 30 films in theaters, most have had limited runs on a fraction of screens compared to traditional wide releases. Netflix typically takes a smaller share of box office revenue, around 35%, compared to 50-60% for major studios, benefiting some exhibitors.

Some theater owners speculate that the financial pressure from Netflixs $80 billion investment in Warner Bros. could push the streaming giant to explore additional revenue streams, potentially including box office sales. Randleman added, I dont like this deal, but theaters might still play a role in recouping the investment.

Author: Connor Blake