Netflix Co-CEO Ted Sarandos Says Movie Theaters Are An 'Outdated Concept'

Netflix has become one of the dominant content creators in Hollywood and the entertainment industry at large. It has worked with legendary filmmakers like Martin Scorcese, backed up-and-coming stars like Timothee Chalamet, and had Alfonso Cuaron win Best Director for "Roma" in 2019. 

But its co-CEO, Ted Sarandos, thinks that the model of making movies for movie theaters is "outdated," and that consumers prefer to watch movies at home.

Sarandos' comments came during the Time100 Summit on Wednesday, where he spoke to Time editor-in-chief Sam Jacobs. And he said he believes his company is making the right decision for what consumers want.

"Netflix is a very consumer-focused company," Sarandos said. "We really do care that we deliver the program to you in a way you want to watch it."

For him, he believes that the decline in box office in recent years is because consumers prefer watching movies at home.

"What does that say? What is the consumer trying to tell us? That they’d like to watch movies at home, thank you," he continued. "The studios and the theaters are duking it out over trying to preserve this 45-day window that is completely out of step with the consumer experience of just loving a movie."

But is he right?

(Photo by Rolf Vennenbernd/picture alliance via Getty Images)

Ted Sarandos Gets Movie Theaters Wrong

Sarandos said he believes that "we're in a period of transition," from the model where filmmakers got into the industry to make movies for a big screen.

"Folks grew up thinking, ‘I want to make movies on a gigantic screen and have strangers watch them [and to have them] play in the theater for two months and people cry and sold-out shows … It’s an outdated concept."

What about the communal experience of being with other people in a theater, with popcorn and a soda? Sarandos was dismissive of that too.

"For movie theaters, for the communal experience" is "an outmoded idea," Sarandos said, "I think it is — for most people, not for everybody. If you’re fortunate enough to live in Manhattan, and you can walk to a multiplex and see a movie, that’s fantastic. Most of the country cannot."

He also said his biggest fear isn't the death of movie theaters, it's that "people stop making great movies."

Netflix, to its credit, has demonstrated that there is an audience for direct-to-streaming content. "Stranger Things," "Bridgerton" and other shows have become cultural reference points; things people talk about. But few, if any, Netflix movies have achieved that same level of saturation. 

Yes "The Irishman" received awards and nominations. As did "Emilia Perez," though it was widely hated by most audiences. But Netflix has not demonstrated that a streaming-exclusive movie can be the next "Barbie" or "Avengers." Or that it can release the next Christopher Nolan event movie. Primarily because most at-home content is watched in bits and pieces on iPads while browsing the internet.

The communal experience does still matter. Movie theaters do still matter, because they're capable of creating buzz and word-of-mouth that can create cultural touchstones. Television shows can be consumed at home, with distractions, because there's more dead time in ~10 hours of content than two. Movies don't have that luxury. 

Scale is different in a theater, sound is different in a theater, getting out of the house and focusing your attention on one thing is different. It's also worth preserving.