“Glass Onion: A Knives Out Mystery” ended its one-week run last night. Netflix, as always, did not disclose grosses but it will finish its 696-theater engagement in fine form. Competitor estimates suggest it will end up with about $15 million in domestic gross — good enough for #2 behind “Black Panther: Wakanda Forever” and ahead of “Strange World.”
It was Netflix’s widest theatrical release, its biggest theatrical take, grosses doubled expectations, and now the film will disappear until it makes its streaming debut December 23. The popular logic seems sensible: Netflix left an enormous amount of money on the table.
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From the exhibitors’ perspective, that’s definitely true. They’re coming off a record-low Thanksgiving holiday and moving into two weeks of no major releases before “Avatar: The Way of Water” (Disney) December 16. (Not to mention that theaters got sweet rental terms in exchange for the truncated run, sources confirm.)
Of course,$15 million is a fraction of what “Glass Onion” might earn in a conventional run. The original played in nearly 3,500 theaters with a total domestic gross of $165 million — without, of course, an imminent Netflix showing or the reluctance of many older viewers to attend theaters.
©Netflix/Courtesy Everett Collection
From the Netflix perspective — well, it’s a streaming service. And the key to its strategy lies in the word used when announcing the plan: preview.
Netflix Originals’ theatrical runs, such as they are, are closer to loss leaders than revenue streams. It’s a marketing tool to drive subscriptions (which in turn support ads on its lower-priced platform). Netflix bet that by using exhibitors to whet “Glass Onion” appetites — followed by a month’s worth of delayed gratification — it will reap much greater rewards than what the box office could provide. What counts is adding and retaining subscribers, and remaining #1 in an increasingly competitive market.
The seven-day run utilized a group of top-tier theaters that included AMC and Regal for the first time. That represented a compromise both internally and then in tough negotiations with theaters — was a surprise, particularly with the gap between its November 29 finish in theaters and delayed December 23 streaming. That happens when new strategies meets differing preferences. Multiple reports suggested Netflix executives were divided about any theatrical play.
The “Glass Onion” strategy initially looked like a joke — the one about a camel being a horse designed by committee — but here’s what Netflix achieved. With a bargain marketing spend, (per iSpot, just over $4 million in TV ads) Netflix got over 1 million people to see the film while experiencing the comedy in well-attended shows to elevate the enjoyment. Assuming good worth of mouth, its absence from any viewing over the next three weeks becomes a feature rather than a bug.
Netflix also satisfied the desires of Rian Johnson and his team for theatrical play and provided reviews (with a terrific 81 Metacritic score). It’s campaigning for awards, which aren’t out of the question. And as theaters have proven, big screens elevate streaming.
©Universal/Courtesy Everett Collection
Also last weekend, Universal had a more limited Saturday preview for “Puss in Boots: The Last Wish,” aimed at boosting theatrical interest ahead of its December 21 release. Grosses weren’t reported; presumably they will be added to opening.
After “Glass Onion” streaming begins, Netflix executives and media analysts will have to factor in the added value of its relative exclusivity. As its most pre-sold Netflix Original, the added value of keeping the number of theatrical viewers low is the X factor in determining whether executives were right to limit “Glass Onion” in theaters. If only a million or so saw the film, and most rave about it, that could add and sustain subscribers to greater benefit than a wider theatrical audience and a bigger box office. All that, plus Netflix gets enhanced brand identification.
Reports have circulated that Netflix might add theaters over Christmas; if so, exhibitors per sources have not been informed. For now they’re unhappy that the run was so brief, and so small. Assuming “Glass Onion” is a streaming hit, theater owners can take some comfort in knowing that Netflix would be inspired to place more of its major productions in theaters — however briefly. And other streamers may follow suit: All services are struggling to realize their potential against rising costs and Amazon reportedly plans to release around 10 films in theaters next year. The windows, of course, are TBD.
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