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Amazon, Netflix Should Consider Buying Movie Theaters

The new action movie starring Will Smith, “Bright,” was watched by an estimated 11 million people in the three days after it premiered on Dec. 22 on Netflix. In theaters, that audience would translate to a nearly $100 million box office opening weekend. That’s better than all but six movie openings in the U.S. last year. But Netflix won’t see a dime of box office revenue.

Instead, the streaming service is hoping it signs up enough new subscribers to offset the $90 million it spent making the movie. That’s the gamble Netflix makes with its TV shows and films every day, of course. But as the company, like Amazon.com, continues to invest more in programming, the sole reliance on subscriptions takes on extra risk. For Netflix, in particular, diversifying its revenue streams is becoming more important. One solution: Netflix or Amazon could invest in or buy their own movie theater chains.

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Streaming may have killed home video, but it ended up ushering in a different kind of boom in watching movies and TV shows at home. And if subscription services are the future of theaters, Netflix or Amazon may change the way we go out to the movies, too.

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Chuck Bush, Raghu Gullapalli and 2 others commented on this article.
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Netflix and Amazon could create theatrical demand where it doesn’t currently exist without cannibalizing their streaming services.