Ted's theater turnaround
Why Netflix suddenly wants to get into theatrical. Plus: New viewing data on Marvel movies on Disney+.
The Gist
A new report reinforces how Netflix’s engagement is slowing and how theatrical movies can succeed on streaming.
It further shows why Netflix wants to buy WB — and why it may actually want to give the theater business a go.
The report also highlighted how Marvel’s movies last year didn’t exactly do gangbuster numbers.
“We were not in the theatrical business when I made those observations…When this deal closes, we will be in the theatrical business.”
That’s how Netflix co-CEO Ted Sarandos defended his previous comments about theatrical exhibition during the company’s earnings call on Tuesday. It was just the latest in a string of similar comments Sarandos has made recently. He’s also stressed that WB movies would have a 45-day window before going to Netflix.
People are still, understandably, skeptical about Netflix’s ambitions. But if we take Sarnados at is word, there are also simple arguments to be made for his pivot.
Yes, Netflix is still the dominant Hollywood streaming platform in the business. But as Sarandos likes to point out, YouTube is watched more often, and Netflix’s engagement is slowing. More movies and shows would help with that.
That’s backed up by a new report from Luminate, which found that Netflix’s share of viewing time in the US was down in 2025 compared to the three previous years (still at 59%, though). HBO Max was at 6%; “combining” them would theoretically give Netflix 65% of viewing time, increasing its share.
And as I pointed out recently, Netflix kind of sucks at developing new movie franchises. Its most costly movie ever, “The Electric State,” was a huge miss last year. Zack Snyder’s “Rebel Moon” movies were huge busts.
Not for nothing, but it kinda has a TV problem in that regard, too. Yes, “Wednesday,” “Bridgerton,” and “Squid Game” are all massive hits, but their first seasons are still by far their biggest despite Netflix adding more subscribers. And big-budget shows like “3 Body Problem” and “The Witcher” have been busts; the former was granted a final second season to hastily wrap everything up, and the latter has flailed since its promising first season. WB and HBO IP could dramatically beef up Netflix’s TV library.
Back to movies: “KPop Demon Hunters,” Netflix’s biggest movie of all time, is its only blockbuster with franchise potential, and a sequel is years away. And it inherited that through a deal with Sony (which it also just struck another deal with to stream its movies globally after their theatrical releases).
Further, according to the Luminate report, the top streaming movies of 2025 in the US were No. 1 “Wicked” on Peacock, No.2 “Demon Hunters,” No. 3 “Moana 2” on Disney+, and No. 4 “Happy Gilmore 2” on Netflix, a sequel to a movie that premiered in theaters three decades ago.
A recent Bloomberg analysis of five years’ worth of Nielsen data also found that “Moana” and “Encanto,” both on Disney+, were the most-watched streaming movies in the US since 2020. “KPop” came in third, which is impressive since it came out in 2025…but that’s the only Netflix original in the top 10. Most everything else premiered in theaters first, minus two Pixar movies that debuted on Disney+ during the pandemic.
So, Netflix knows it is stronger when it partners with traditional studios or can leverage their content. And there’s plenty of data that shows how streaming movies can benefit from a theatrical release from a studio. So, why not buy one?
Disney’s dilemma continues
That Bloomberg analysis also found that Disney+ has pretty much stalled in viewing over the last three years, despite the big animated movies and a string of Marvel and “Star Wars” shows (that have mostly come and gone).
The Luminate report also shows that Marvel’s movies aren’t exactly doing gangbusters on streaming after their tepid theatrical releases, reinforcing that the franchise is only thriving now during event releases like “Deadpool and Wolverine.”
That movie was watched for 1.34 billion minutes in the US in its first week on Disney+ in 2024, according to Nielsen, or roughly 10 million viewers.
That’s double last year’s top Marvel movie, “Captain America: Brave New World,” which was watched for 651 million minutes in its first week (around 5 million viewers), according to Luminate (yeah yeah, different sources. Whatever). “Thunderbolts” and “The Fantastic Four: First Steps” were watched by 3 million and 4 million viewers in their first weeks on Disney+, respectively.
Those movies largely disappointed at the box office, too, with none making the worldwide top 10 last year and none crossing $600 million.
This year could mark a turning point, as Disney will release its first “Avengers” and “Star Wars” movies in seven years, and it’s fully integrating Hulu into Disney+. But the streaming numbers should be an eye opener.
What I’m into this week
I’m still diving into the Star Trek universe. I completed my watch of the original six movies and re-watched the reboot trilogy. I even started the TV series “Star Trek: Strange New Worlds.” But that’s it.
HBO’s new “Game of Thrones” show, “A Knight of the Seven Kingdoms,” premiered last week. It’s a light-hearted counter to the super seriousness of the other spinoff, “House of the Dragon.”
Count me in for Amazon’s “Masters of the Universe” movie. The first trailer leans on nostalgia, fun, and absurdity, as it should.
Beyond the Traverse
🏆 Sinners broke the record for most Oscar nominations for a single movie, with 16. “Wicked: For Good” was shut out.
🖥️ What’s worse: Coverage of festival clapping or trailer views? The “Doomsday” teasers gained a combined “1.02 billion views,” whatever that means.
🎮 Ubisoft canceled a “Prince of Persia” remake and other games as part of another reorg.