Just after Netflix pulled out of the Cannes Film Festival this year, with the festival changing its rules regarding films produced by streaming services, a new report claims Netflix is contemplating purchasing theaters in New York and Los Angeles. While unconfirmed, this new report also claims that Netflix had been contemplating a purchase of the Landmark Theaters chain, which is co-owned by Mark Cuban. But Netflix reportedly backed away from that potential sale, because the asking price was too high. While it remains unclear if Netflix will ultimately buy either local New York and/or L.A. theaters, or a full theater chain, it could help the streaming service break through when it comes to festivals and awards season.
Last year, Netflix debuted two movies at the prestigious Cannes Film Festival, ahead of their debut on the streaming service, Bong joon-ho's Okja and Noah Baumbach's The Meyerowitz Stories. Many attendees loudly booed during Okja when the Netflix logo was displayed, which lead to the festival creating a new rule, that films made specifically for streaming services must first debut in French theaters and they can't debut on streaming services for three years thereafter. This is only for films that debut in competition for the prestigious Palme D'Or, with Netflix free to debut any of their films out of competition without having to adhere to these new rules. Here's what Eric Handler, an analyst with MKM Partners, covering the major theater chains, had to say in a statement about Netflix considering the purchase of movie theaters.
"It seems Netflix would like to get some of its movies for Oscar contention or other types of industry awards. They're trying to get credibility. Netflix took off when a couple of their own titles got nominated for Emmys. That lent credibility to what they're doing. If they can do that for various awards, that might raise the platform a little bit."
Netflix's chief content officer Ted Sarandos has previously advocated for the simultaneous release of their films in both theaters and on their streaming service, which exhibitors are definitely not on board with. Owning their own theater chain would make this possible, and enhance its chances for awards season consideration for its films. Netflix's Mudbound was nominated for four Oscars, but it didn't win any, although the streaming service did pick up an Oscar win for Best Documentary with Icarus. Some industry insiders believe that Mudbound may have gotten even more nominations if it had been released in theaters. Here's what another source had to say about Netflix's possible plans to purchase movie theaters.
"Netflix wants to establish itself as a critical exhibition source on both coasts. For awards consideration they need to be able to release pictures on screens in major markets."
While no one is expecting Netflix to go after one of the major exhibitors, a theater chain like Landmark would make more sense and help Netflix get a foothold in the exhibition market. Landmark is a privately-held chain that operates 53 theaters that make up 227 screens in 27 markets around the country, including three theaters in Los Angeles. Landmark is owned by Mark Cuban and Todd Wagner, who had previously put the theater chain on the block in 2011 but there was no sale. You can head over to The Los Angeles Times for their full report on Netflix possibly buying a movie theater chain.