Knives Out 2 could be about to explode Netflix’s business model
Netflix has given its biggest signal yet they are about to change their business model — and release films exclusively in cinemas for much longer.
At the end of April, with news for the first time that they were losing subscribers, the share price plummeted.
It hasn’t recovered and Netflix has, fairly openly, been considering significant changes.
They have pledged to clampdown on password sharing (to stop multiple households using one account) and even mooted adverts across their platform. They’ve also laid off 150 staff.
Meanwhile the monthly cost has gone up.
It was scarcely a year ago, with Netflix riding high in March of 2021, they spent an astronomical $469m for the rights to two sequels to Knives Out, both to be written and directed by Rian Johnson.
(A losing bidder told Variety: “The math doesn’t work. There’s no way to explain it. The world has gone mad. It’s a mind-boggling deal.”)
The eye-watering fee came after the original, a Lionsgate property, raked in $300m at the box office at an outlay of just $40m.
Despite dropping significant sums on high-profile features before (The Irishman at $150m, Outlaw King at $120m, Midnight Sky at $100m) up until now Netflix has resisted a significant cinema release (if any at all).
Films released by Netflix got a cursory showing in cinemas (mostly to qualify for awards) but would be available within weeks on the streaming service.
As you might expect the box office gross suffered.
- Don’t Look Up with a budget of $75m grossed $792,000
- The Irishman grossed $8m
- Midnight Sky grossed $3m
- Outlaw King, released in 2018, was given no theatrical release at all
The company’s long-standing stubbornness on this has cost them clout among filmmakers and at awards (Netflix, for example, has never qualified for their films to show at Cannes).
But, it seems, Knives Out 2, could be about to change all this. The days of Netflix taking huge hits on their films may be a thing of the past.
Bloomberg’s Lucas Shaw reported on Sunday that Netflix is considering releasing some movies in theatres this year with an exclusive theatrical window of 45 days.
For comparison Don’t Look Up and The Power of the Dog ($417,000) were given just two-week windows.
Netflix have thus far declined to comment.
Theatre owners have backed the move - desperate for punters to return for more than just Marvel movies.
John Fithian, the CEO of the National Association of Theatre Owners, recently told Insider during an interview: “We’re always open to bigger theatrical releases from the streaming companies if they have appropriate windows.
“The theatre door is open to Netflix if they want to go with a bigger theatrical strategy.”
Should Knives Out 2 prove a success what would that mean for Netflix’s current business model?
And would such a move backfire on those loyal subscribers who have swallowed a price increase?
