'Glass Onion' could have made $200 million, but Netflix only let it play in theaters for a week - CNBC

Netflix astir apt near hundreds of millions of dollars connected the array by not keeping Rian Johnson's "Glass Onion" successful theaters.

The sequel to Johnson's critically acclaimed "Knives Out" opened successful astir 700 theaters, the largest merchandise of immoderate Netflix archetypal movie to date, past Wednesday up of the Thanksgiving vacation weekend. "Glass Onion" leaves theaters Tuesday. It volition get connected Netflix Dec. 23.

The movie snared an estimated $13 cardinal to $15 million during the five-day stretch, a coagulated opening for a movie released successful lone a constricted fig of theaters.

Box bureau analysts, however, accidental that fig could person been overmuch higher if Netflix had opted for a accepted wide merchandise of 2,000 to 4,000 theaters. The truncated tally for "Glass Onion" besides prompted manufacture insiders to again question the streamer's theatrical merchandise strategy. Netflix has backtracked connected its erstwhile policies, including by introducing an ad-supported subscription option, starring galore to wonderment whether the institution should rethink its absorption to the accepted Hollywood movie merchandise exemplary arsenic it looks for caller ways to turn revenue.

"With a accepted wide release, premium surface spread, and afloat selling campaign, I deliberation 'Glass Onion' could person generated astatine slightest $50 cardinal to $60 cardinal to pb the full market," said Shawn Robbins, main expert astatine BoxOffice.com.

Instead, Disney and Marvel Studio's "Black Panther: Wakanda Forever" continued to pb the container office, tallying $45.9 cardinal successful home summons income during the regular three-day play and $64 cardinal for the five-day vacation period.

Netflix declined to supply container bureau receipts for the film, breaking with modular procedures different studios adhere to each weekend, truthful it is unclear what "Glass Onion" generated successful summons income Friday, Saturday and Sunday.

But successful 2019, "Knives Out" snared $312 cardinal globally connected a fund of conscionable $40 million. The archetypal film's show astatine the container bureau has provoked questions astir wherefore Netflix has constricted the merchandise of "Glass Onion" to conscionable 1 week successful a constricted fig of theaters. After all, the streamer reportedly shelled retired $400 cardinal for the rights to 2 sequels.

Box bureau analysts predicted the movie could person hauled successful much than $200 cardinal successful summons income earlier the extremity of its tally if it had been fixed a wider planetary release.

"This is precisely the benignant of movie adults privation to spot successful theaters close now," said Robbins. "The household constituent made 'Knives Out' a cleanable Thanksgiving merchandise for audiences crossed the state 3 years ago. Daniel Craig's instrumentality arsenic Benoit Blanc, Rian Johnson's crisp storytelling, and different circular of affirmative reviews for 'Glass Onion' are gathering connected the fantabulous goodwill from the anterior movie arsenic this semi-sequel reaps immoderate rewards, but it arguably could person achieved adjacent more."

Word of rima was a immense origin successful the occurrence of "Knives Out," arsenic evidenced by the film's debased driblet successful summons income from week to week aft its opening. Typically, films volition spot play income driblet by 50% oregon much successful each week aft its opening. But "Knives Out" summons income declines remained consistently nether 40% until Christmas, erstwhile income got a 50% boost, and past lone fell betwixt 10% and 30% play until February.

This indicates that audiences were talking astir the movie and encouraging others to spell retired and spot it, starring to a beardown clasp successful summons sales.

"Glass Onion" earned a 93% "Fresh" standing connected Rotten Tomatoes from 238 reviews and an assemblage people of 92%, suggesting that it excessively could person generated the aforesaid benignant of connection of mouth.

Some executives wrong Netflix reportedly lobbied co-CEO Ted Sarandos earlier this twelvemonth to see longer stints successful theaters and wider releases for immoderate films, but Sarandos nixed the idea. Top brass astatine the institution person said repeatedly that the aboriginal of amusement is streaming.

The company's strategy successful the past with constricted theatrical releases — specified arsenic with Martin Scorsese's "The Irishman" — has been to physique buzz for subscribers earlier the movie arrives connected its service. That's the play here, too, the institution said during past quarter's net video.

"We're successful the concern of entertaining our members with Netflix movies connected Netflix," Sarandos said during the call.

He said that Netflix has brought films to festivals and has fixed them constricted runs successful theaters due to the fact that filmmakers person demanded it.

"There [are] each kinds of debates each the time, backmost and forth, but there's nary question internally that we marque our movies for our members and we truly privation them to ticker them connected Netflix," helium said.

Netflix did not instantly respond to CNBC's petition for comment.

While Sarandos and co-CEO Reed Hastings person remained adamant that subscribers don't privation Netflix contented successful theaters, immoderate Wall Street analysts don't deliberation that's the case.

"Subscribers don't attraction astatine all," said Michael Pachter, expert astatine Wedbush. "The talent, connected the different hand, cares a lot. ... The endowment needs that to assistance negociate aboriginal deals, and thrives connected the prestige of awards nominations."

"Netflix did not bash this for the money," helium added. "They did it due to the fact that of unit from the talent."

To others, similar streaming adept Dan Rayburn, Netflix's cross-platform promotion of putting "Glass Onion" successful theaters for a week to tease its merchandise connected the streamer a period aboriginal "makes a batch of sense."

The streaming elephantine would person besides had to ammunition retired much successful selling costs to beforehand the movie implicit time.

Still, it's hard for investors to spot each the wealth near connected the array — particularly erstwhile Netflix continues to walk heavy connected contented arsenic subscriber numbers slow.

In caller years, the streamer has spent large connected flashy, blockbuster-style enactment movies similar "The Gray Man" and "Red Notice," which outgo the institution $200 cardinal each. The films are the archetypal steps successful bids to spark event-level franchises. But they're costly, and it's unclear however affirmative they person been for Netflix's bottommost line.

Unlike rival studios Universal and Disney, Netflix doesn't person a wide breadth of sources to make revenue. Its lone option, until recently, for recouping its spending has been done subscription growth. The institution is hoping its ad-tier volition assistance make much funds to subsidize its $17 cardinal yearly spending connected content.

Box bureau analysts and Wall Street spot theatrical releases arsenic a astute mode for Netflix to marketplace its contented and spark gross growth.

"Here's hoping 'Knives Out 3' is fixed the accidental to physique further connected this watershed infinitesimal of practice betwixt Netflix and theatrical exhibitors," Robbins said. "It would beryllium a win-win for the full industry." 

Disclosure: Comcast is the genitor institution of NBCUniversal and CNBC. NBCUniversal owns Rotten Tomatoes.