Inside the failed deal that almost made 'The Irishman' Netflix's first wide theatrical release
- Netflix attempted to get Martin Scorsese's "The Irishman" a wider theatrical release than any of its previous movies.
- The streaming giant tried to make a deal with AMC Theatres and Cineplex to show the movie, according to The New York Times.
- The theater chains were willing to let the movie have a 60-day exclusive theatrical window, lower than the established 72 for all other titles. But Netflix wanted a 45-day window.
- But that wasn't the only thing the two sides were at an impasse about. Business Insider learned that AMC and Cineplex were trying to get a 75/25 split in ticket sales.
- It's very rare that a theater gets a majority of ticket sales.
- Netflix has ended up releasing the movie in a limited theatrical run, in which theaters are getting the higher end of the ticket sale split, multiple sources told Business Insider.
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"The Irishman" almost had the widest release of any Netflix original movie.
AMC Theatres, the largest movie theater chain in the US, and Cineplex, which has 1,600 theaters in Canada, were in talks with Netflix for months on showing Martin Scorsese's gangster epic, according to The New York Times.
The Times reported that both chains were even willing to do something that many in the industry thought unthinkable: shorten the exclusive theatrical release window for the movie to just 60 days before Netflix would be allowed to make the movie available for streaming (the industry-wide agreement is 72 days). But talks stalled because Netflix would go no higher than 45 days for an exclusive theatrical window, the Times reported.
But that's not the whole story.
Both sides weren't just negotiating how many days the movie would play in theaters. The theaters were also trying to get a better deal than they normally get from Hollywood studios.
According to a source familiar with the negotiations between the theaters and the streaming giant, AMC and Cineplex wanted a 75/25 split in ticket sales, meaning the theater would get 75% of the ticket sales. (AMC, Cineplex, and Netflix declined to comment for this story.)
Typically, a studio gets the higher side of the split (leaving a theater to make most of its money on concessions). Usually a studio gets a 60/40 split on its releases, meaning the theater only makes 40%. And there are cases when the studio takes even more. The Wall Street Journal reported in 2017 that Disney took 65% of "Star Wars: The Last Jedi" ticket sales.
But the talks fell apart, even with Scorsese imploring Netflix for a wide release, multiple sources familiar with Scorsese's thinking told Business Insider. Instead, Netflix released the movie this weekend in select theaters in New York and Los Angeles (Netflix does not report the box-office grosses of its films), with other theaters being added in the coming weeks before the movie is made available to stream starting November 27. The "splits" for those runs are in the favor of the theaters, not Netflix, according to multiple sources in the exhibition industry.
AMC, Regal, and Cinemark have never shown Netflix titles, as the streaming giant won't respect the exclusive window the rest of the industry does of 72 days before a title is available on a streaming service, VOD, or Blu-ray/DVD. The fact that AMC, the biggest theater chain in the world, was willing to show "The Irishman" and let it play in a shortened window than what the studios are allowed is significant.
"I am pleased they did not cave to Netflix's request of 45 days," the head of one independent theater chain, who wished to be kept anonymous, told Business Insider. "But I feel there is considerable pressure from many parties within the industry to shorten windows."
Will the news that a 60-day window was discussed make studios now look for the same kind of deal? It's likely that will be more of an uphill battle, as studios won't be willing to take a split that favors the theaters. But as we are on the cusp of even more options on the streaming front (with the launch of new services from Disney, Apple, and WarnerMedia), it's clear that the conversations on how theatrical and streaming can coexist are becoming more serious than ever before.
"If Netflix and other streaming entities continue to corral high profile films, shrinking the window will be inevitable," Exhibitor Relations senior box-office analyst Jeff Bock told Business Insider. "The fact that they were as close as they were shows progress, and as it is with any negotiation, they'll likely end up finding a middle ground sooner than later. The whole idea is to appease audiences, that's the endgame, so it's also in everyone's best interest."