Netflix sees more theatrical releases in a bid to have ‘greater cultural impact’, says JPMorgan analyst

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Netflix is ​​looking at a more traditional theatrical release for some of its future films, according to a report by CinemaCon’s JPMorgan.

Analysts for the company, who attended the film industry’s largest conference in Las Vegas last week, said they had met management teams from several exhibition companies who said there is a “real interest” from the streaming service in showing some of its films in theaters. to play for a longer period of time.

“Netflix wants its films to have greater cultural impact,” JPMorgan analyst Alexia Quadrani wrote in a research note published Monday.

Netflix representatives did not immediately respond to CNBC’s request for comment.

Netflix has long been less interested in making money at the box office and more in getting content to its subscribers as quickly as possible. The streaming service has rejected the traditional Hollywood release window, in which a movie runs in theaters for about three months before it becomes available on video-on-demand or on a streaming service’s site or app.

Exceptions have been made in the past to allow Netflix movies to qualify for the Academy Award contest.

However, as the pandemic has prompted studios to reduce the release window from 90 to about 45 days, it appears that Netflix is ​​rethinking its strategy.

“The company is in the process of determining how it will market its films and the amount to commit to ad spend as most wide releases would cost $50 million or more for [print and advertising]Quadrani wrote.

For a theatrical release, studios pump out marketing months in advance, then ramp up that saturation in the weeks leading up to opening weekend. In the weeks that follow, more commercials will hit the market to convince those who didn’t make it to the film’s debut to see the film.

“Too short a cinema window misses the mark as it becomes difficult to market a limited run movie,” Quadrani wrote.

Of course, traditional marketing can be expensive. In general, ad spend for a movie is calculated at about half of the production budget. So for a movie that costs $200 million to make, about an additional $100 million is spent on print and media advertising.

The upside is that these expenses can be recouped if a movie thrives at the box office.

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