“We didn’t buy this company to destroy that value. We’re deeply committed to releasing [Warner Bros.] movies exactly the way they release those movies today,” Sarandos said during a UBS Global Media and Communications conference on Monday.
“If we did this deal 24 months ago, all those movies we saw this year do so well at the box office for Warner Bros. would have been released in the same way in theaters,” he added, specifically naming Minecraft, Superman, Weapons, and Sinners. “With the Warner Bros. operating entity, we think it’s really important the way that they create and the way that they drive value.”
Although Paramount has launched a hostile takeover aimed directly at Warner Bros. Discovery shareholders, Sarandos isn’t worried.
“Today’s move was entirely expected. We have a deal done, and we are incredibly happy with the deal,” he said. “We think it’s great for our shareholders. It’s great for consumers. We think it’s a great way to create and protect jobs in the entertainment industry. We’re super confident we’re going to get it across the line and finish.”
Well, one thing Paramount’s $82.7 billion bid did change was Sarandos tune regarding his commitment to theatrical. Last week, he was already warning of his intent to shrink the window of time between the theatrical and streaming release of Warner Bros. movies. Today, he’s all Nothing will change! Nothing will change!
As I wrote on Monday, if Netflix and Warner Bros. seal this merger, everything will change.
Sarandos has no affection or sentiment for the theatrical business or films as an art form. As Jordan Ruimy points out, Sarandos has repeatedly expressed his contempt for movie theaters:
This is the same man who called theatrical release “an outmoded idea.” The same man who claimed that watching Lawrence of Arabia on your phone was “just as good” as seeing it on the big screen. The same man who insisted that [Oppenheimer] would “have had the same cultural impact” if it had gone straight to Netflix. And the man who labeled theatrical release an “inefficient” way to distribute a $200M movie.
It’s pretty obvious that Sarandos sees himself as an iconoclast disruptor out to change society, in the same way Steve Jobs changed everything with the iPhone and Bill Gates changed everything with the home computer. He wants to make movie theaters obsolete in the same way GPS made maps obsolete. But in order to do that, he has to get this deal across, and if that includes making a commitment to theatrical he won’t keep, so be it.
And I can’t say as I blame him. He’s in the business of subscriptions. As cable TV dies off and fewer and fewer people go to the movies (because they stink), streaming subscriptions is where the entertainment dollars are today. In less than 20 years, thanks to streaming, Netflix is valued at over $400 billion. Second place Disney isn’t even valued at $100 billion.
So, why would Sarandos undermine his own business model by keeping theatrical alive? Anyone can go see a movie in a theater. What drives subscriptions is exclusivity.
You want to see Sinners 2, Superman 2, Weapons 2, and Minecraft 2?
You gotta subscribe, baby.
You want to see all those amazing titles in the Warner Bros. catalogue?
You gotta subscribe, baby.
John Nolte’s first and last novel, Borrowed Time, is winning five-star raves from everyday readers. You can read an excerpt here and an in-depth review here. Also available in hardcover and on Kindle and Audiobook.
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