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For Netflix, Releasing the ‘Knives Out’ Sequel in Theaters Is a Bad Idea: Here’s Why

Rian Johnson's much-anticipated "Glass Onion: A Knives Out Mystery" could be a great film, and Netflix's first with an exclusive 45-day window. That would be a mistake.

Glass Onion: A Knives Out Mystery

“Glass Onion: A Knives Out Mystery”

Netflix

September will see the premiere of “Glass Onion: A Knives Out Mystery,” the first of Rian Johnson’s two planned “Knives Out” sequels. Netflix bought the rights to the sequels for $469 million in March 2021, surpassing the $200 million reported budget for recent release “The Gray Man” (billed as its most expensive original film yet). The film will premiere at the Toronto International Film Festival in September (Johnson’s first “Knives Out” film, released by Lionsgate, also premiered at the fest in 2019).

But what comes after that TIFF premiere? Reportedly, Netflix executives met with exhibition leaders this year about releasing the film with a exclusive 45-day window; that release would be part of a test to see if the strategy might make sense for future Netflix titles.

Netflix previously provided exclusive theatrical windows for films like awards players “Roma” and “The Irishman,” but the sequel poses a new opportunity. The 2019 “Knives Out” grossed $165 million in its domestic run, more than four times its five-day Thanksgiving opening weekend of $41 million. Marketing is always essential, but for the first time another studio laid the groundwork three years ago.

The arguments for Netflix titles going to theaters first are myriad: Advance play elevates a Netflix original and makes it feel more like a “real” movie. A meaningful theatrical release could mean a meaningful revenue stream. And, if Netflix takes exhibition seriously, so perhaps will exhibitors. Currently, Cinemark is the only top chain that will book a Netflix film.

Here’s the thing: Those aren’t very good arguments.

The Gray Man, Ryan Gosling

“The Gray Man”

Netflix

Did you miss one of the most expensive, star-packed films of the year in theaters last week? The one by directors whose 2019 film grossed $2.8 billion worldwide? Of course you did. “The Gray Man,” from brothers Anthony and Joe Russo, is number one this week on the Netflix charts following its July 22 streaming debut — but it got a head start in about 450 theaters the week prior, where it made between $200,000-$250,000 on opening weekend per industry sources.

Based on those industry estimates, each theater saw an average of 40-50 people over the course of that first weekend. A major benefit theaters claim is the enhancement of the shared experience, but if you bought a ticket to see “The Gray Man,” there’s a chance you might have seen it with more people at home.

Netflix doesn’t put its movies in theaters to elevate the experience, and we know it’s not for the tiny film rentals the films might earn. In fact, it’s hard to figure out what it has to gain by doing it — and when the streamer increasingly finds its strategic decisions under fire, there is a case to be made that theatrical releases are counterproductive.

Six teenagers of mixed genders, standing outside and wearing '80s casual wear and staring at something off camera.

“Stranger Things 4”

Tina Rowden/Netflix

When it comes to what performs best at Netflix, there’s no contest: It’s the original series, like the record-breaking Season 4 of English-language “Stranger Things” or the even-stronger Korean-language “Squid Game.” A Netflix original film usually (but not always) tops its film chart, at least in its first week. However, when Netflix combines its series and movie charts, series overwhelmingly dominate.

Of course, there’s differences in how Netflix measures series and movies (multiple episodes count toward a series’ total). Another big difference: Netflix’s hit series maintain their amazing performances without ever showing anywhere else.

There is scant evidence that theaters can benefit Netflix for a general-audience film like “The Gray Man” or “Glass Onion.” (It’s another story for Oscar titles and their essential awards-qualifying run.) There’s no real money to be made: It would be all but commensurate with the increased marketing costs. Making nice with AMC, Regal, and Cinemark, who are never going to be their allies — why?

In fact, there’s much stronger evidence to suggest that going theater first could create substantial drawbacks for Netflix.

The company has a theatrical distribution staff, but it’s a small one. It’s not the kind of operation meant to coordinate a run in 3,400-plus theaters — the size Lionsgate handled for the original “Knives Out.” Marketing a Netflix film for theaters is a slog of its own making: There’s already been a decade of aggressive marketing dedicated to telling audiences that Netflix means stream on demand, at home. (Good luck convincing The New York Times to break its policy of timing Netflix film reviews to their streaming debuts.)

There’s also the matter of grosses. Netflix doesn’t reveal them, but there’s always insider estimates that include rivals who don’t have Netflix’s best interests at heart. Theatrical distribution means real-time results reported, shared, and analyzed with the world — a Netflix anathema. Terrific box office would be a marketing plus (presuming Netflix revealed it), but anything less than the original could mean unwelcome scrutiny.

And finally, no matter how seriously Netflix takes theatrical distribution, streaming is still the point. Theatrical-first tells viewers that streaming is second best and undermines what makes Netflix series perform so well: It’s only on Netflix. Moving into wide-release theatrical distribution is an unforced error, creating consumer confusion and denying the streaming premiere its undivided attention.

Worse yet: What if theatrical audiences respond to “Glass Onion” with mixed word of mouth and blunt the anticipation for its Netflix arrival?

For a service dealing with a recent loss of subscribers, it’s hard to see why sharing its exclusive viewing opportunity makes sense.

Expect major interest in the Toronto premiere for Johnson’s film. The festival runs September 8-18; “Glass Onion” is as yet undated for any would-be theatrical run, as well as its streaming premiere. As many others have noted, releasing a film shortly after its festival debut takes advantage of all that earned media; reportedly, Netflix plans to release in the last quarter of 2022.

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