Netflix Has Considered Buying Movie Theaters in Los Angeles and New York to Gain an Oscar Edge

The character Okja and Seo-Hyun Ahn in a scene from the Netflix movie “Okja,” which competed at Cannes last year. (Netflix via Associated Press)

Netflix, the global streaming giant that has dramatically changed the TV industry and clashed with movie theater owners, may be ready to move onto the big screen in a new and surprising way — by owning cinemas.

The Los Gatos, Calif., company has explored the idea of buying movie theaters in Los Angeles and New York that would enable it to screen a growing pipeline of feature films and documentaries, according to people familiar with the situation.

Netflix executives considered acquiring Los Angeles-based Landmark Theatres, the circuit co-owned by Mark Cuban, but recently backed off the idea, said two people who spoke on condition of anonymity because the plans are private.

One of the knowledgeable people said Netflix decided not to pursue a deal because executives believed the sale price for Landmark was too high.

Although no cinema deal has materialized, the idea of Netflix buying a theater chain would mark a new phase in the company’s rapid ascent to become one of the most powerful players in the entertainment industry.

Netflix has attracted its 125 million subscribers worldwide by releasing dozens of original films and TV shows annually on its fast-growing streaming service, bypassing the traditional theatrical market, as well as the cable bundle.

Netflix has promised to spend as much as $8 billion this year on original and licensed content for its subscribers who pay a monthly fee to binge shows and films. The company said in October that it would release 80 original movies this year alone, and has done film deals with such high-profile figures as Adam Sandler, Martin Scorsese and the Duplass brothers.

The downside for Netflix is that its movies are locked out of major theater chains, and have been effectively blocked from one of the world’s most prestigious film festivals.

Netflix last week said it would not go to the Cannes Film Festival this year because the festival decided to ban movies from competition that don’t have theatrical distribution in France. Last year, Netflix movies including “Okja” competed at Cannes.

“We want our films to be on fair ground with every other filmmaker,” Netflix Chief Content Officer Ted Sarandos told Variety. “There’s a risk in us going in this way and having our films and filmmakers treated disrespectfully at the festival.”

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SOURCE: LA Times, Ryan Faughnder