NATO: Theater Owners Not Upset With Netflix's 'Beasts of No Nation' Release Strategy

16 Oct, 2015 By: Erik Gruenwedel

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Netflix Oct. 16 is set to launch its first original motion picture, Beasts of No Nation, in select theaters and on its streaming platform globally. The complicated African warlord drama stars Idris Elba and is directed by Cary Fukunaga (“True Detective”).

When Netflix first announced its plans for Nation and a future distribution blueprint for original movies, theater owners reacted negatively, saying they wouldn’t screen Netflix titles.

With the debut of Nation, several media outlets have suggested theater owners are in a collective uproar over the release.

Not true, says Patrick Corcoran, chief communications officer with the National Association of Theater Owners. He says criticism of the release is not about anger, but rather, a simple business decision.

“Theater owners are not upset. We’re a little bemused about the hype surrounding it. Basically, they’re are not interested in it [based on the economics],” Corcoran said.

He said Netflix’s decision to release Nation to a smattering of smaller theaters is more about qualifying the film for future Academy Award consideration and build a halo around what they offer on their streaming platform than generating incremental revenue.

“Frankly, 40 million Netflix subs have already paid for the movie. So when you’re looking to book a movie in your theater, and you’re looking to maximize the number of people to come see it. You’re going to look at things like that,” Corcoran said.

Theaters for decades have enjoyed a three- to four-month release window before titles are disseminated via home entertainment, pay-TV and broadcast. It’s a distribution food chain Netflix CCO Ted Sarandos has openly challenged as antiquated and out of touch with today’s on-demand consumer.

Sarandos admits bowing Netflix original movies in theaters is done largely to underscore their theatrical significance. He believes the movies are attractive enough that theater owners would want to book them at the same time that they're on Netflix.

“I think it's important for people to understand that these movies are not TV movies. They're of the same size and scale and scope of the movies you will see in theaters. So one way to do that is to have them in theaters,” he said back in July.

As an example of box office clout, Corcoran cited the horror title It Follows, which did better financially the longer it stayed in theaters, including generating $5 million in ticket sales in the third week of release. IFC’s Oscar-winning release Boyhood generated increased box office returns over time as well.

“Basically what theater owners are looking for is whether distributors are committed to maximizing the revenue and audiences you can get in a theatrical release,” he said.

Essentially, NATO is asking distributors to work together with theater operators when trying to alter the traditional release window, including accelerated entry into home entertainment.

Paramount Pictures created controversy when it announced  that upcoming releases Paranormal Activity: The Ghost Dimension (Oct. 23) and Scouts Guide to the Zombie Apocalypse (Oct. 30) would be given a wide release with digital home entertainment purchase available 17 days after the films dip below 300 domestic theaters.

To circumvent theater owner backlash, Paramount made a deal with AMC Theatres and Cineplex Entertainment in a first-of-its-kind in-theater and digital revenue-sharing initiative.

It didn’t work. Regal Cinemas is boycotting Ghost Dimension, and, as a result, the film will debut on about 1,400 domestic screens instead of the nearly 2,900 screens for prior film Paranormal Activity: The Marked Ones.

“They needed to have more theaters involved,” Corcoran said. “Unfortunately, they had two large [theater chains] on board and then went to The Wall Street Journal.”

Indeed, due to the reduced screens at launch, observers question how effective Paramount and Netflix’s new release strategies will be.

“People going out on movie night most likely will go see a movie they can’t get at home,” Corcoran said.

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