Netflix CEO Ted Sarandos believes that movie theaters have become obsolete because he wants to

      Hollywood CEOs, particularly in recent times, have a reputation for being disconnected from the reasons their audiences appreciate their products. Nonetheless, Netflix CEO Ted Sarandos’s recent remarks regarding the theatrical experience were notably poor, even by that standard.

      During a short conversation at the Time100 Summit, Sarandos claimed that Netflix was “saving Hollywood.”

      “Netflix is a very consumer-centric company,” he stated. “We genuinely care about delivering content to you in the way you prefer to watch it.”

      He pointed to global box office figures as evidence of how Netflix is catering to audience preferences. “What does that indicate?” he asked. “What is the consumer conveying to us? That they prefer to watch movies at home, thank you. The studios and theaters are in conflict over trying to maintain this 45-day window, which is completely at odds with the consumer's enjoyment of films.”

      Sarandos did mention that Netflix has provided theatrical releases for some of its titles. “We have these customized releases … we need to meet some qualifications for the Oscars,” he explained. “They have to run for a while, which helps with the press cycle. But I’ve encouraged every director we collaborate with to prioritize the consumer, focus on the fans. Create a film that they love, and they will reward you.”

      Sarandos described Hollywood as undergoing a phase of “transition.”

      “People grew up believing, ‘I want to make movies for a big screen and have strangers watch them [and] have them run in theaters for two months, with people crying and sold-out shows … It’s an outdated notion,” he elaborated, stating that wanting to make films for a “communal experience” is an “antiquated idea.”

      “I think it applies for most people, but not everyone. If you’re lucky enough to live in Manhattan and can walk to a multiplex to see a movie, that’s great. Most of the country cannot.”

      There's undeniable truth in the observation that fewer people attend movies than a decade ago. It's also clear that Netflix and other streaming platforms contribute to this trend. However, Sarandos dismisses the theatrical experience not out of correctness, but because he is a businessman making a pitch. Movie theaters are not vanishing, and Netflix is not the great savior he attempts to portray.

      Ted Sarandos aims to diminish movie theaters because it would benefit Netflix.

      Sarandos likely views Netflix similarly to how his predecessor, Reed Hastings, did. Back in 2017, Hastings famously remarked that Netflix was competing with “sleep” for viewers' attention, a comment that felt dystopian at the time but has proven insightful. Hastings highlighted that Netflix wasn't merely rivaling movie theaters and linear cable but also internet videos, sleep, and walking the dog. The objective was to capture the consumer's attention as much as possible.

      While this is valid, it's also accurate that Netflix competes with movie theaters. They want viewers to watch films from their sofas, and it conveniently suits them to assert that this is what audiences desire as well. Netflix is attempting to eliminate its competition, and Sarandos suggesting it's merely what viewers want serves as a way for him to rationalize this.

      Netflix isn't particularly adept at this.

      Despite Sarandos's claims of meeting consumer demand, Netflix is the same company that recently spent over $300 million on The Electric State, a film that seemed to vanish the moment it was available on the platform. While the streamer has had successes, those hits rarely come from the major investments they've made. For instance, Adolescence, a U.K. production, performed exceptionally well, and Squid Game became a sensation through word of mouth.

      Despite these accomplishments, Netflix's long-term operational sustainability remains unclear. On the other hand, theatrical releases, while not always successful, don’t require excessive creative accounting to validate their existence. Sinners cost Warner Bros. $90 million, yet is on track to reach $100 million at the domestic box office. It's true that not every film is a Sinners, but it's also important to recognize that 1) many people genuinely enjoy watching movies with others, especially in an environment with fewer distractions, and 2) audiences seek films that are fundamentally good.

      Netflix is not necessarily better at producing quality films than other studios, and its focus on creating content that appeals to the lowest common denominator often results in films that resonate with virtually no one. The Electric State seems like a project an algorithm would deem successful, making it fitting that Netflix ended up producing it. Perhaps it would have made a greater impact had it been released in theaters first.