Hollywood CEOs, especially these days, are not exactly known for being in touch with the reasons people love their products. Even by that low standard, though, Netflix CEO Ted Sarandos’s recent comments about the theatrical experience were still pretty rough.
During a brief discussion at the Time100 Summit, Sarandos said that Netflix was “saving Hollywood.”
“Netflix is a very consumer-focused company,” he continued. “We really do care that we deliver the program to you in a way you want to watch it.”
He then cited global box office returns as one example of how Netflix is giving people what they want. “What does that say?” he said. “What is the consumer trying to tell us? That they’d like to watch movies at home, thank you. The studios and the theaters are duking it out over trying to preserve this 45-day window that is completely out of step with the consumer experience of just loving a movie.”
Sarandos did acknowledge that Netflix has given theatrical releases to a few of their titles. “We have these bespoke releases … we have to do some qualification for the Oscars,” the CEO explained. “They have to run for a little bit, it helps with the press cycle a little bit. But I’ve tried to encourage every director we work with to focus on the consumer, focus on the fans. Make a movie that they love, and they will reward you.”
Sarandos said Hollywood is in a period of “transition.”
“Folks grew up thinking, ‘I want to make movies on a gigantic screen and have strangers watch them [and to have them] play in the theater for two months and people cry and sold-out shows … It’s an outdated concept,” he explained, adding that wanting to make movies for a “communal experience” was an “outmoded idea.”
“I think it is — for most people, not for everybody. If you’re fortunate to live enough in Manhattan, and you can walk to a multiplex and see a movie, that’s fantastic. Most of the country cannot.”
There is certainly some truth to the notion that fewer people go to the movies than they did a decade ago. And it’s undoubtedly true that Netflix and other streaming services play some role in that. Sarandos is dismissing the theatrical experience not because he’s right about it, though, but because he’s a businessman making a pitch. Movie theaters aren’t on their way to extinction, and Netflix is not the great savior he wants it to be.
Ted Sarandos wants to kill movie theaters because it would be good for Netflix
Sarandos probably thinks about Netflix in much the same way his predecessor, Reed Hastings did. Hastings famously said back in 2017 that Netflix was competing with “sleep” for the eyeballs of its viewers, a comment that felt dystopian then, even as it has proven to be incisive. Hastings’s point was that Netflix was not just competing with movie theaters and linear cable for attention, but with internet videos, sleep, and walking the dog. The goal was to get the consumer’s eyeballs as much of the time as possible.
As much as that’s true, though, what’s also true is that Netflix is competing with movie theaters. They want you to watch movies on your couch, and it’s certainly convenient for them to claim that that’s what you want too. Netflix is trying to kill its competition, and Sarandos claiming that it’s just what viewers want is just a convenient way for him to not feel that bad about it.
Netflix isn’t actually very good at this
For all of Sarandos’s bluster about giving the consumer what they want, Netflix is also the company that just spent more than $300 million on The Electric State, a movie that seemed to stop existing basically the second it hit the service. The streamer has had its hits, to be sure, but rarely have they been the titles that the streamer actually invested big money in. Adolescence is a U.K. production that went over huge on the streamer, and Squid Game was a word-of-mouth sensation.
In spite of these successes, though, it’s still not quite clear how Netflix plans to operate sustainably for decades to come. Theatrically released movies, on other hand, aren’t always successful, but at least it doesn’t require loads of funny accounting to justify their existence. Sinners cost Warner Bros. $90 million, and the movie is already on its way to $100 million at the domestic box office. It’s true that not every movie is Sinners, but it’s also worth considering that 1) some people actually do like to watch movies with other people, and perhaps even more importantly, in a place where they can’t be easily distracted and 2) people want movies that are, above all else, good.
Netflix isn’t any better at making good movies than any other studio, and it’s desire to only make movies that appeal to a lowest common denominator often results in movies that appeal to precisely no one. The Electric State is the kind of movie an algorithm might think would do well, so it’s fitting that Netflix wound up making it. Maybe it would have made a little more of an impact if it had been released in theaters first.
