Netflix Heading to the Movies -- Streamer Looks to Bury the Hatchet With Theater
Streaming services now command the lion's share of U.S. entertainment dollars, yet movie theaters still draw crowds hungry for shared spectacle. What happens when the biggest streamer decides theaters might not be the enemy after all?
Netflix (NFLX) CEO Ted Sarandos met privately with top theater executives at CinemaCon in Las Vegas the other day. The conversation centered on releasing more Netflix originals to the big screen. No formal deal emerged, but the tone was hopeful. Sarandos told the group he wants to "find a way to work together." For NFLX investors, this marks a pragmatic pivot that could open new revenue paths without abandoning the company's core streaming model.
The Meeting That Signals a Shift
Sarandos sat down with the CEOs of AMC Entertainment (AMC), Cinemark (CNK), and Regal Cinemas. The session followed Netflix's failed bid for Warner Bros. Discovery (WBD) and came after Sarandos publicly revised his views during the company's Q4 earnings call. "This is a business and not a religion," he said then, "so conditions change and insights change."
Past tensions ran high. Netflix once limited theatrical runs to two or three weeks for awards qualification, frustrating filmmakers and owners alike. Yet recent successes by rivals changed the math. Apple's F1 generated $633.4 million at the box office, and Amazon's Project Hail Mary topped $500 million. Netflix itself saw KPop Demon Hunters open to $18 million to $20 million in one weekend before earning two Academy Awards.
Sarandos is reportedly now "dipping his toe in the water." Upcoming titles such as The Empty Man, Steps, a David Fincher-Quentin Tarantino project, Ray Gunn, and Narnia (slated for limited IMAX on Thanksgiving) could test wider releases.
Netflix's Potential Gains from the Big Screen
Netflix reported trailing 12-month revenue of $45.2 billion in the most recent quarter, up 17.6%. Its P/E stands at 40.77, while the forward P/E sits at 32.79. EPS reached roughly $2.53. The streamer ended 2025 with 375 million subscribers and guided 2026 revenue growth between 12% and 14%.
A broader theatrical window could lift subscriber acquisition and retention by driving cultural buzz that streaming alone sometimes misses. Granted, not every film benefits equally – Sarandos himself noted some perform better on the platform. That said, the move diversifies risk in a market where pure streaming growth faces saturation questions.
How Theater Chains Stand to Benefit
Theater operators face their own pressures. AMC posted 2025 revenue of $4.85 billion but carries a net loss of $127.4 million. Cinemark generated $3.12 billion in revenue with EPS of $1.04 and pays a dividend yielding 1.2%.
Additional high-profile releases could lift ticket sales and concession revenue for both chains. No matter how you slice it, more premium content fills seats that have stayed empty too often since the pandemic.
Bottom Line
This CinemaCon outreach offers NFLX investors a low-risk signal of strategic flexibility. While no agreement exists yet, the conversation alone suggests management sees theatrical as a growth tool rather than a threat.
Savvy investors should watch Netflix's next earnings for any concrete release plans and monitor box office trends. The move won't transform overnight, but it positions the streamer to capture upside both on screens and in subscriber metrics – exactly the kind of pragmatic evolution that rewards long-term shareholders.