Would Netflix buying Warner Bros. kill movies in theatres?

When Sonya Yokota William heard that Netflix was poised to buy Warner Bros. Discovery's TV and film studio — one of Hollywood's oldest and most prized assets — she couldn't help but worry that the future of the moviegoing experience itself was at risk.

Assurances from Netflix that it would maintain the studio's current operations, including theatrical releases for films, has done little to allay industry concerns about the streaming giant's attitude toward theatrical releases.

“I think the proof is in the pudding and what we've seen so far is a total reluctance to put films in cinema,” said William, who is the director of the Network of Independent Canadian Exhibitors, an alliance of independent cinemas.

Though Netflix has agreed to buy Warner Bros. Discovery's TV and film studios and streaming division for $72 billion US, the deal is still subject to regulatory approvals. Meanwhile, Paramount Skydance has launched a hostile takeover bid worth $108.4 billion US.

Industry analysts say that while people do still want to see movies in theatres, the cost of doing so has increased and customers need a more compelling reason to go. Some analysts suggest that theatre companies and studios haven't done enough to market their product as a relatively inexpensive experience.

Netflix's takeover bid “poses an unprecedented threat to the global exhibition business," said Michael O'Leary, president and CEO of Cinema United, a trade organization that represents more than 31,000 movie screens in the U.S. and Canada.

Netflix's business model does not support showing movies in theatres, he said.

The deal would risk removing 25 per cent of the annual domestic box office if films that are "traditionally given a robust theatrical release by Warner Bros., disappear from theatres," he said.

In 2024, the estimated domestic box office was around $8.7 billion, down from $9 billion in 2023, according to media analytics company Comscore.

O'Learly slammed what he called Netflix's "token theatrical release" of a handful of films, which he says is mostly done to ensure they receive Oscar consideration. Guillermo del Toro's Frankenstein, for example, was given a limited theatrical release for three weeks starting on Oct. 17, before it was available to stream on Netflix on Nov. 7.

The industry concerns relate not only to the Netflix business model, but statements made by Ted Sarandos, a co-chief executive of Netflix, who has questioned the future of theatregoing.

For example, just this past April, Sarandos, speaking at the TIME100 Summit in New York City, called the concept of people watching movies as a communal experience “an outmoded idea."

“Who wins in that scenario when you remove the choice of being able to watch a movie in the cinema," William asked.

Serena Whitley, program director for the Toronto independent theatre The Revue Cinema, which screens older films, says Warner Bros. is probably one of their best distributors. But she wonders whether their catalogue will be available for them to exhibit if Netflix takes it over.