Why Movie Theaters Are Worried About Netflix Taking Over Warner Bros

What do you think the future of theatrical distribution looks like with all the consolidation in Hollywood?

This is the question running through people's minds all over the United States and the world, as studios get gobbled up by streamers, and people wonder if they'll ever see their favorite movies in theaters again.

And it's a question theater owners stay up late pondering, as they not only root for a big comeback, but for a theatrical window to be extended to drive consumers toward them.

This is also why the organization representing theater owners in North America, Cinema United, went to Congress to plead its case that no one should be allowed to buy Warner Bros.

Let's dive in.

The Warner Sale Will Hurt Movie Theaters

Cinema United CEO Michael O’Leary just stood before Congress with a dire warning: a Netflix-Warner Bros. Discovery (WBD) merger would be an “irreversible negative impact” on the very soul of the moviegoing experience.

For theater owners, the prospect of Netflix holding the keys to the Warner Bros. library is a "Red Alert" scenario. Cinema United's argument is simple: Netflix doesn’t care about your local theater. And therefore, Netflix is incentivized to keep movies from them and just on their platform.

Their acquisition of Warner Bros has come with a promise to finish out WB's theatrical slate, but conflicting reports about how long they would put those movies in theaters, and no guarantees they would continue the practice after the current contracts are honored.

Historically, Warner Bros. has been one of the most reliable "theatrical first" studios in town. But under Netflix, exhibitors fear a repeat of the Disney-Fox "gobbling," which effectively halved the output of two major studios and led to fewer movies being released.

And this is a scenario that could lead to no WB movies coming to theaters at all.

The Cinema United Argument to Congress

So, what are they arguing about before Congress? The basic case against the consolidation comes down to these three main factors:

• Reduced Output: Consolidating two major production engines into one dominant platform almost always leads to fewer greenlights.
• The "Token" Release: Netflix’s average theatrical window is currently 11-17 days—a "blink, and you'll miss it" strategy that keeps movies out of theaters before word-of-mouth can even build.
• Economic Ripple Effect: For every dollar spent at a theater, $1.50 is generated for surrounding local businesses (restaurants, bars, etc.). If the movies go straight to the couch, Main Street feels the hit.

Maybe that would get elected officials to listen.

Credit: Netflix

Why This Matters to Filmmakers

I think it's pretty clear, but if you’re a screenwriter or director, this merger changes the "who" and "how" of getting a movie made.

And also the ripple effect of that is changing how people break in and get jobs and make careers and then sustain them.

If fewer movies are made, that means fewer careers can happen overall. Do I think something will replace it? I am not sure, but I do think the industry is going to change in ways we cannot predict or see right now.

Here's what we know: If Netflix wins, the Warner Bros. brand becomes a prestige arm of a global streaming service. The benefit of that is that we might see a bigger budget, but your chances of seeing your film play in a 400-seat theater for more than a week are slim to none.

Netflix is a tech company first, and once they have WB, it will be that, too.

They have all the leverage because they're their own distributors.

Summing It All Up

As Netflix inches closer to officially having Warner Bros, it's hard to imagine the government or anyone stepping in to stop them. But the repercussions of the sale are already being prepared for and felt within Hollywood.

While all we have right now are speculations, it feels like many serious things are on the horizon.

Let me know what you think in the comments.