Netflix and iPic team to release original films in theaters

The deal will allow the company to also start showing movies the same day on its website

Financial trends and news by Steven Loeb
October 5, 2016
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Updated with comment from Netflix

As Netflx and Amazon have begun to venture into feature films, either developing themselves or distributing them, they have run into major issues with theater owners, who are unhappy with the threat they pose to their livelihoods.

The major sticking point is when those movies that Netflix owns will be released online; Netflix wants to release them the same day, while the theater operators, for obvious reasons, want a longer window.

Now Netflix seems to have finally found a way around the big theater chains, teaming up with theater chain iPic, according to a report in the Wall Street Journal, which will allow it to simultaneously screen its original movies in theaters the same day that they appear on the streaming service.

In all, iPic runs a chain of 15 multiplexes, with locations in California, Arizona, Washington, Texas, Wisconsin, Maryland, New Jersey, New York and Florida.

With this deal, starting within the next year, up to 10 Netflix movies will play in iPic theaters in Los Angeles and New York City, and the company will have the option of showing them at the company's other locations as well. Financial terms of the deal, including revenue split, weren't disclosed. 

This deal could be a major move for Netflix, as it has encounter more resistance than it in the world of television. 

Netflix first ran into this problem in 2014, when it won the rights to produce a sequel to the early 2000's martial arts hit Crouching Tiger, Hidden Dragon. The plan was to release the film on its website, and in IMAX theaters, on the same day.

However, the operators of the majority of those screens balked at the idea, including AMC, Regal and Cinemark, which together operate 247 of the 400 IMAX theaters in North America. Those chains said that they would refuse to show the film, voicing their opposition to the idea of having it released on-demand on the same day.

Amazon ran into a similar issue with its first original movie, the Spike Lee-directed Chi-Raq. The company partnered with Roadside Attractions and Lionsgate for a limited release in theaters on December 4, 2015, and the film didn't hit Amazon's streaming service until February 4, two months after its theatrical debut.

That may seem like a long time, but it's much, much shorter than the 39 to 52 weeks it usually takes for movies to premiere on subscription video services. The fear from the theater owners is that a shorter time between the theatrical debut, and its online debut, will cause fewer people to spend the money to see it in a theater. Perhaps the deal with iPac is a sign that this is becoming less of a concern, at least for some theater operators. 

The fact that Netflix's movies will be showing in New York and Los Angeles is no accident, by the way. Those are the two cities that a film has to play in for at least a week to be eligible for the Oscars. 


Netflix has confirmed the partnership with iPic, but would not disclose any terms of the deal.

"We are  advocates of consumer choice and are delighted by the fact that this offers consumers another option in which to enjoy a Netflix film," a spokesperson said. 

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