Netflix CEO Thinks Studios Might Die If They're Focused On Saving Theaters & Not "Putting The Customer First"

People sure do love their Netflix, huh? With more than 200 million subscribers worldwide, Netflix is the biggest name in streaming. Thus, it’s the platform that has the biggest dog in the theatrical release vs. streaming release fight that is raging in Hollywood. So, you can’t be too surprised when the Co-CEO of Netflix talks about how the future is streaming and studios better evolve or they’re going to fail.

In a new interview with KCRW, Netflix Co-CEO Ted Sarandos talks about the future of the film industry in terms of release strategies. And you’d be right to assume he’s a big fan of streaming and sees that as the future. But make no mistake, he wants you to know that he’s also a fan of movie theaters…if they survive.

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The general thesis presented by the Netflix executive is clear—people don’t care where to watch a film as long as the content is good. If that’s in a theater, that’s fine. If it’s on a TV screen in their living room, great. People just want quality film content that is easily accessible, especially during a time when theaters aren’t operating at full capacity. And he feels that this is something that studios will have to adapt to, especially if they’re still so beholden on box office grosses.

“You’ve got to follow the audience,” he explained. “And if the audience isn’t showing up [to theaters], and they’re showing up watching at home, you have to adapt. Seeing a movie in a theater might just become rarer. It’s a very hard thing to figure out what post-pandemic behaviors will be and how they shift. There’s a big financial infrastructure required to support screens that has to ultimately be supported by the fans and the viewers.”

So, what’s a studio to do? Well, put simply, evolve or die. Sarandos thinks folks like WarnerMedia, Disney, Universal, and others need to understand that the viewing habits of consumers are changing, and they can’t save a theatrical release business that is floundering.

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“When businesses change, when consumer behavior changes radically, how you navigate those waters is so hard,” Sarandos said. “You might say that not being diversified in our business approach is a challenge. But it’s actually been such a blessing that we’ve not had to try to save a business. Once your primary role is trying to save a business, you’re dead.”

He added, “Remember, we made the transition from DVD to streaming. We never spent a minute trying to save the DVD business. Our future was always going to be in streaming, and any energy we spent trying to save the DVD business was energy that wasn’t being spent trying to create the streaming business. Putting the consumer first was really important. Once you see that happening, you’ve got to go all in.”

Of course, it’s important to know that Netflix is still releasing films in theaters when the chance arrives. Filmmakers still prefer their features being seen on the big screen. But Netflix has had issues with theater chains, which want films to be seen exclusively in theaters before hitting the streaming service, which is a bridge too far for the streaming platform. However, Sarandos doesn’t necessarily see theatrical exclusivity being an issue for the consumer. In fact, he believes that making films exclusive for theaters hurts the consumer.

READ MORE: WarnerMedia CEO Teases More ‘Harry Potter’ Expansion & Talks Shrinking Theatrical Windows

“People just want to watch new movies, and they won’t have access to them,” he said. “And most people don’t even have a theater in their neighborhood.”

Say what you will about Netflix and the disruption that is happening in the film industry when it comes to streaming, but it’s a really bold statement from Sarandos to put forth the notion that most people don’t have access to a theater in their neighborhood. With thousands of screens in the US, that just seems like a silly notion. However, he’s not wrong about how Netflix wants to put customer-desires first by eliminating the theatrical window. People really do want to have the choice about whether or not they have to pay for tickets to see a film on the big screen or if they would rather watch at home.

2021 is going to be yet another interesting year to see how this whole debate evolves. But it’s clear what side Netflix is on.