Netflix Secretly Weighed Theater Expansion Before Warner Bros. Deal

Netflix ’s long-standing resistance to movie theater releases has taken a surprising turn. CEO Ted Sarandos recently disclosed that the streaming giant had been quietly debating the idea of launching its own theatrical distribution branch well before its high-profile acquisition of Warner Bros. Discovery. This revelation comes as a shock to many, given Sarandos’s history of publicly downplaying the importance of theatrical runs for Netflix originals, except when required for awards eligibility.

During the company’s Q4 2025 earnings call, Sarandos and co-CEO Greg Peters addressed the company’s evolving perspective. They explained that their previous reluctance wasn’t rooted in opposition to theaters themselves, but rather in prioritizing the rapid expansion of their streaming platform. Sarandos clarified,

“We were not in the theatrical business when I made those observations. Remember, I’ve 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. We 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’t make the priority cut.”

Shifting Priorities and the Warner Bros. Discovery Acquisition

With the acquisition of Warner Bros. Discovery, Netflix is set to inherit a fully developed theatrical distribution network. Sarandos commented on the strategic advantage this brings, stating,

“We will have the benefit of a scaled, world-class theatrical distribution business with more than $4 billion of global box office. And we’re excited to maintain it and further strengthen that business.”

This move marks a significant pivot from Netflix’s previous approach, which focused almost exclusively on streaming and limited theatrical releases for awards consideration.

For years, industry watchers have wondered why Netflix seemed so resistant to giving its films a broader theatrical presence. While select titles have received short runs in theaters to qualify for the Oscars, Sarandos consistently emphasized that the company’s core mission was streaming. His latest remarks suggest that the idea of a hybrid model—balancing streaming with more robust theatrical releases—has been on the table internally for quite some time, even if it never took top priority.

Blockbusters That Could Have Changed the Game

Netflix has produced several major films in recent years, including the two Knives Out sequels, the action- packed Carry-On starring Taron Egerton, the record-breaking Red Notice, and last year’s KPop Demon Hunters. Each of these could have generated significant box office revenue had they been given extended theatrical runs before hitting the streaming platform.

Despite this, Sarandos and Peters remained committed to delivering fresh content directly to subscribers, focusing on maintaining the monthly subscription model that has driven Netflix’s growth. The Warner Bros. Discovery deal now positions Netflix to play a much larger role in the world of theatrical releases, though it appears that movies produced under the Warner Bros. banner will continue to be released as such, while Netflix originals will remain exclusive to the platform.