Netflix\u00a0has never been against putting its movies in theaters, according to the streamer\u2019s top execs \u2014 but before it agreed to buy Warner Bros., it was too busy managing the fast-growing streaming business.<\/p>\n\n\n\n
Co-CEOs Ted Sarandos and Greg Peters, speaking on the company\u2019s Q4 2025 earnings interview, said the company had in the past internally debated whether or not to launch a business to distribute original Netflix films in theaters. But that always fell short of Netflix\u2019s priorities list as the streaming side of the company continued to grow quickly.<\/p>\n\n\n\n
Of course, the perception that Netflix doesn\u2019t think theatrical is a great business was crystallized by Sarandos\u2019 comments last year that moviegoing was \u201coutmoded.\u201d At the Time100 Summit in April 2025,\u00a0Sarandos called the communal moviegoing experience \u201can outmoded idea.\u201d<\/p>\n\n\n\n
But that was then, and this is now, Sarandos told analysts Tuesday. \u201cWe were not in the theatrical business when I made those observations,\u201d Sarandos said. \u201cRemember, I\u2019ve said it many times, this is a business, not a religion. So conditions change. Insights change. And we have a culture that we reevaluate things when they do.\u201d He called out Netflix\u2019s prior \u201cpivots\u201d around advertising, sports rights and live events \u2014 areas the company had previously said it had no interest in developing.<\/p>\n\n\n\n
According to Sarandos, \u201cwe debated many times over the years whether we should build a theatrical distribution engine or not. And in a world of priority-setting and constrained resources, it just didn\u2019t make the priority cut.\u201d<\/p>\n\n\n\n
When the WB deal closes, he said, \u201cWe will have the benefit of a scaled, world-class theatrical distribution business with more than $4 billion of global box office. And we\u2019re excited to maintain it and further strengthen that business.\u201d Sarandos, as part of his campaign to win over opponents to the megadeal, has committed to keeping Warner Bros. movies in a 45-day theatrical window.<\/p>\n\n\n\n
Netflix\u2019s default position going into talks with Warner Bros. Discovery was that \u201cwe were not buyers,\u201d Sarandos said. \u201cWe went into this though with our eyes open, and our minds open. And when we got into, we both [Sarandos and Peters] got very excited about this amazing opportunity.\u201d<\/p>\n\n\n\n
Peters said that, based on Netflix\u2019s film output deals, it already knew that the theatrical model is an \u201ceffective complement to the streaming model.\u201d But when it came to recurring the question of building a theatrical distribution business, he said, \u201cwe were busy investing in other areas.\u201d<\/p>\n\n\n\n
Netflix has seen upside from special event releases of its originals in movie theaters, including the New Year\u2019s Eve run of the \u201cStranger Things 5\u201d finale (which generated more than $25 million at the box office) and the company\u2019s limited runs of smash hit \u201cKPop Demon Hunters.\u201d<\/p>\n\n\n\n
According to Netflix CFO Spence Neumann, the company sees the WB deal as an accelerant to its existing business. Roughly 85% of the revenue of the combined Netflix-WB, on a pro-forma basis, will come from the core streaming business with the added benefit of the Warner Bros. films and TV studios, he said.<\/p>\n\n\n\n