Netflix Has A Wild Week With Theatrical As The Streamer Circles Warner Bros.

As Netflix makes a run at Warner Bros Discovery that would test its commitment to theatrical, the streamer has had an erratic week in cinemas between Rian Johnson’s Wake Up Dead Man: A Knives Out Mystery with $4 million+ over the five-day Thanksgiving frame (despite the best franchise audience score at 94%), and the presales success of the New Year’s Eve Stranger Things series-finale stunt.

When it comes to Netflix’s further foray into theatrical, it’s been a bag of mixed messages. Following the great results for its first No. 1-ranking movie at the box office in late August with KPop Demon Hunters Singalong — $19M over two days (sans No. 1 chain AMC but with Regal and Cinemark) — Netflix co-CEO Ted Sarandos exclaimed during an October earnings call that the company’s m.o. is “to give our members exclusive first-run movies on Netflix.” Sarandos’ belief is that the B.O. success for KPop Demon Hunters was due to the fact it was on Netflix first. Note, Netflix doesn’t report box office, so all B.O. figures listed are verified industry estimates.

A month later, Netflix is making a play for WBD that reportedly includes a pledge to releasing movies in theaters.

While the WBD bidding process is unfolding in a dramatic fashion — Paramount just accused WBD of an unfair sales process that’s favoring Netflix as its potential buyer — Wake Up Dead Man misfired. It will be followed by anticipated big turnout for Stranger Things‘ series finale in theaters — at what is technically a cost of $0 to consumers.

Let’s look further at what went down with Wake Up Dead Man and Stranger Things.

Pulse Of A ‘Dead Man’

Wake Up Dead Man’s $4M gross and a per-theater average of $6,600 were way down from Netflix’s 2022 release of Johnson’s Glass Onion: A Knives Out Movie over the same five-day Thanksgiving period ($13.3M at 696 theaters for a $19K per-theater average). For reference, the original 2019 Knives Out, released theatrically by Lionsgate in the same Thanksgiving window, delivered a big $41.4M over the five days for a final box office of $165.3M domestically and $312.8M globally.

How did Wake Up Dead, which had excellent reviews at 92% and the best audience score for the franchise at 94% on Rotten Tomatoes, as well sellouts in over 500 locations, wind up so low? Netflix was unable to book the top three circuits — AMC, Regal and Cinemark — who were insisting on a 30-day theatrical window like Glass Onion‘s, not a 17-day theatrical window. Hence, Wake Up Dead Man wound up playing the arthouse Alamo, Landmark, and mom-and-pop circuits. In addition, the movie didn’t get a theatrical P&A campaign like Glass Onion did. Johnson himself took to social media and, in answering a fan, expressed “I’m as frustrated as you that it’s not everywhere.”

Netflix insiders contend that Wake Up Dead Man was given the same 17-day window as its brethren awards contenders from the streamer, i.e., Guillermo del Toro’s Frankenstein, Noah Baumbach’s Jay Kelly and Kathryn Bigelow’s A House of Dynamite. Why couldn’t Wake Up Dead Man go earlier to get a 30-day window? Because fans expect the movie in theaters over Thanksgiving, which is the franchise’s traditional launchpad.

AMC CEO Adam Aron and Sarandos remain in a deadlock over the theatrical window. AMC initially didn’t play KPop Demon Hunters in late August as the movie was hitting cinemas well after its massive debut on the streamer. AMC, as well as other circuits and motion picture studios, believe a 45-day theatrical window is appropriate for the success of a movie. Sarandos is adamant about a 17-day window, which for many would be considered wallop to the domestic box office.

Despite the brouhaha, we hear terms to exhibition were favorable, some telling us that they received 65% of ticket sales on Wake Up Dead Man.

It should be noted that the Glass Onion release was a week commitment by the major circuits; theaters were welcomed to play beyond that. It’s a similar case with Wake Up Dead Man whereby theaters can play beyond the December 12 Netflix premiere date. We hear the theater count for Wake Up Dead Man is going up by 40 theaters this coming weekend.

MRC and T-Street sold Knives Out 2 and 3 to Netflix for $400M during Covid in March 2021. Sources tell us that the hope back then when the deal was made during the Scott Stuber-led production era was that Glass Onion would be the first full wide theatrical release for Netflix (north of 2,000 theaters) in what would be a new era for the streamer. They didn’t happen, and we still have yet to see Netflix commit to a full-bodied 30-day exclusive wide theatrical release window.

‘Stranger Things’: Popcorn In Lieu Of Box Office

On Tuesday, Netflix announced a two-day screening (December 31-January 1) of the Stranger Things series finale in 500 locations, with all three major chains involved. Word from distribution and exhibition sources is that showtimes are selling out (meaning a 90% capacity, because the first row is rarely sold in an auditorium), remarkable considering that New Year’s Eve is a down day at the holiday box office. The theatrical screening of the series finale is timed with the drop of the 2 hour and 5 minute finale on December 31. Reserving seats at AMC costs $20 apiece, but that’s not considered the ticket price, nor is it box office to be split by Netflix and the circuit. Essentially, those reserving a Stranger Things ticket get a concession voucher.

No box office and all the money goes to the circuit? OK, really, what’s going on here, Netflix? Apparently, this is par for the course when it comes to cinemas showing episodes of certain TV shows. Due to talent residual constrictions, Netflix wasn’t cleared to charge tickets to the Stranger Things series finale. The way around that for cinemas in such scenarios is to charge a flat concessions fee when it comes to reserving seats, with all the money going to the theater. It’s a win-win for them, and in such cases they’ll see a banner concessions day (one source telling is that an 85% surge in daily popcorn/soda revenue isn’t unheard of).

Now, there are many other instances of episodic TV shows charging ticket prices, i.e., Fathom Entertainment’s release of the Lionsgate faith-based series The Chosen (all in $114M), 2013’s Doctor Who: The Day of the Doctor in 3D ($4.5M), and 2019’s Friends 25th: The One with the Anniversary ($3M). In those instances, such TV fare was cleared on a talent residual basis to charge tickets at the box office.

The Stranger Things finale and KPop Demon Hunters’ Halloween weekend release came about after AMC and Netflix re-engaged in theatrical talks in September. One of Aron’s goals for the year was to find a path for both to work together on windowed theatrical releases. Stranger Things and Kpop Demon Hunters Halloween were considered olive branches from AMC; a continued show by the exhibitor to Netflix about the power of theatrical (Kpop Demon Hunters only did around $6M in its second go-around over a dead Halloween box office weekend for the entire industry).

Why didn’t the major circuits obsess about a theatrical window with Stranger Things like they did with Wake Up Dead Man? Because Wake Up Dead Man is considered a theatrical release versus Stranger Things which is a TV stunt. At least that’s exhibition’s rationale, the double standard of KPop Demon Hunters windows situation aside.

Mergers & Windows

While any absorption of Warner Bros movies by Netflix would, of course, need to adhere by the filmmaker contracts in place for a theatrical release, many including exhibition fear a Netflix-Warner Bros Discovery marriage, particularly when it comes to the crunching of the window.

Cinema United Boss Michael O’Leary told Bloomberg two weeks ago, “Netflix’s apparent agreement to abide by existing contractual obligations that they might inherit says nothing about a meaningful commitment to theatrical exhibition.”

O’Leary further told Deadline, “True commitment to theatrical involves a robust slate of movies in theatres with a meaningful period of exclusivity supported by marketing.”

Paramount CEO David Ellison has made it known that a Paramount-Warner Bros union would strive to keep two studio slates afloat with around 30 releases annually. By comparison, Disney-Fox, post merger had 19 wide theatrical releases in 2019, which dwindled to nine last year, and 16 currently in 2025.

Netflix’s addition of Warner Bros. would clearly give the streamer a global theatrical distribution apparatus, which it doesn’t currently have.

Tune in next Thanksgiving when Netflix’s commitment to theatrical and box office prospects are tested again with the global theatrical release of Greta Gerwig’s $200 million epic Narnia, which is getting an Imax global run in 90 countries across 1,000 auditoriums. While that’s on a 28-theatrical window to Netflix per the streamer’s promise to the filmmaker, it remains to be seen whether Narnia expands to be a wide release in the Kpop Demons sense of the word.