Netflix has never been against putting its movies in theaters, according to the streamer’s top execs — but before it agreed to buy Warner Bros., it was too busy managing the fast-growing streaming business.
Co-CEOs Ted Sarandos and Greg Peters, speaking on the company’s 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’s priorities list as the streaming side of the company continued to grow quickly.
Of course, the perception that Netflix doesn’t think theatrical is a great business was crystallized by Sarandos’ comments last year that moviegoing was “outmoded.” At the Time100 Summit in April 2025, Sarandos called the communal moviegoing experience “an outmoded idea.”
But that was then, and this is now, Sarandos told analysts Tuesday. “We were not in the theatrical business when I made those observations,” Sarandos said. “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.” He called out Netflix’s prior “pivots” around advertising, sports rights and live events — areas the company had previously said it had no interest in developing.
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According to Sarandos, “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.”
When the WB deal closes, he said, “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.” 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.
Netflix’s default position going into talks with Warner Bros. Discovery was that “we were not buyers,” Sarandos said. “We 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.”
Peters said that, based on Netflix’s film output deals, it already knew that the theatrical model is an “effective complement to the streaming model.” But when it came to recurring the question of building a theatrical distribution business, he said, “we were busy investing in other areas.”
Netflix has seen upside from special event releases of its originals in movie theaters, including the New Year’s Eve run of the “Stranger Things 5” finale (which generated more than $25 million at the box office) and the company’s limited runs of smash hit “KPop Demon Hunters.”
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.
Earlier Tuesday, Netflix announced it was switching the $83 billion deal to buy Warner Bros. Discovery’s studios and HBO Max streaming business to an all-cash offer. That was driven by pressure from Paramount Skydance, which has been pursuing a hostile takeover attempt of Warner Bros. Discovery with what it alleges is a superior deal for WBD shareholders. Netflix and WBD expect the transaction to close in 12-18 months, but right now it’s unclear how much resistance the deal with face from regulators.
