Why “Top Gun: Maverick” Is a Victory for Old Hollywood

  • Netflix will become more flexible about allowing theaters to distribute its movies during the 45-day-window. This will happen for a number of reasons. First, Netflix’s previous strategy of living and dying by subscriber growth alone will change with the introduction of an ad-supported tier. Generating revenue from ads will lessen the need to grow through sheer subscriber volume. Second, Netflix needs to recoup the cost of movies. The most popular Netflix movie ever, Red Notice, cost $200 million — but it captured none of the buzz and staying power of Netflix’s limited series such as Stranger Things. Third, distributing films in theaters will help Netflix attract more Old Hollywood artists who prefer having their movies appear on the big screen.
  • New Hollywood will expand its presence through the Old Hollywood distribution system, too. A few New Hollywood companies actually own theaters: Netflix owns the Egyptian Theater in Hollywood, and the Paris Theater in New York. Disney owns the El Capitan Hollywood theater, where it plays its own movies. Owning a limited number of brick-and-mortar theaters gives New Hollywood a means to hold special events and build buzz for major releases without competing with chains. But would it make sense for a streaming company to expand even further? One fascinating possibility is for Amazon to scoop up some cash-strapped theaters, as has been speculated. I could see movie theaters becoming cash cows for Amazon to hustle its private label brands in the lobbies and offer special rewards for Prime members. The time may or may not be right for Amazon. The company suffered a rare loss in its most recent earnings announcement. But then again, theater chains are still hurting financially. And Amazon is clearly moving into brick-and-mortar industries such as retailing (most notably via the acquisition of Whole Foods a few years ago). Will Amazon make a move now?

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