How Netflix’s ‘Knives Out’ Sequel Overcame AMC Theatres’ Resistance and Scored a Big-Screen Release

It’s no accident that “Glass Onion: A Knives Out Mystery” was the Netflix film that finally got AMC Theatres and Regal Cinemas onboard for a one-week limited theatrical engagement — breaking a years-long standoff between the streamer and the nation’s two largest movie theater chains.

And both sides stand to gain from the experiment. Netflix, which paid director Rian Johnson and producing partner Ram Bergman $469 million to make two sequels to his hit 2019 mystery starring Daniel Craig, will get the exposure that comes from a big-screen release; while exhibitors, reeling from post-shutdown financial woes, will get a starry, well-reviewed mystery film in a year in which A-list studio fare has been in short supply.

AMC and Regal can also test if films produced for streamers — and headed to the small screen within weeks — really can get motivated moviegoers back into cinemas. And since Netflix and the chains have committed to releasing the films in just 600 theaters nationwide — Sony’s “Lyle Lyle Crocodile” opened last Friday in 4,350 — the risks are relatively low.

“This is a proof of concept for AMC and Regal,” Boxoffice editor Daniel Loria said. “None of this is a guarantee that future films will arrive at these theaters, but these chains will now have some data to base future negotiations for Netflix films on.”

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“Knives Out” is a known quantity

Unlike other awards-oriented films from the streamer that have received a limited release often in art-houses, director Rian Johnson’s mystery is the rare streaming sequel to a genuine box office hit. The original film opened in November 2019 against heavy competition like Disney’s “Frozen II” and pulled in a strong $165 million in North America with $311 million worldwide against a $40 million budget.

AMC CEO Adam Aron cited the box office success of “Knives Out” in his statement announcing the coming arrival of “Glass Onion” to his locations, with one-third of the 600 theaters the sequel will screen on being AMC multiplexes. Aron also said that he has long wanted AMC and Netflix to “find a way to crack the code and synergistically work together,” echoing the mantra repeated by many exhibitors that streamers and cinemas can co-exist, bringing more titles to theaters that in turn get an awareness boost from their time on the big screen.

Theaters still get a bit of exclusivity

After its theatrical run, “Glass Onion” will not go to streaming until Dec. 23, roughly three weeks after its theatrical play. That should boost interest among the cult fan base of “Knives Out” to buy tickets to see the film early while giving Netflix the advantage of several weeks of word-of-mouth by those early moviegoers ahead of its Christmas streaming release.

A three-week gap is far from the 45-day window of continuous theatrical play that has become the norm for major studios since the pandemic, but it’s a marked change from the release strategy Netflix used for other populist films like “The Gray Man,” which hit streaming immediately after its one-week theatrical run. A handful of Netflix awards contenders like Noah Baumbach’s “Marriage Story” have also had a gap between theatrical and streaming release, but “Glass Onion” is the most high-profile Netflix title to try this.

“We have long said that we would welcome Netflix movies in our theatres with the proper agreements in place. This agreement that we have reached with Netflix for ‘Glass Onion’ is acceptable to AMC as it sufficiently respects the sanctity of our current theatrical window policy,” Aron said, though he declined to discuss any details of that agreement.

Representatives for Netflix declined to comment for this story. Regal reps didn’t respond to requests for comment, while AMC’s rep declined to comment beyond Aron’s initial statement.

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Both Netflix and theater chains need revenue

This deal also gives all involved some extra financial help after what has been a turbulent year. While Netflix has consistently eschewed the 45-day-plus theatrical window that has become the industry standard since the pandemic, the streamer has significantly cut back on its production spending after surprise losses in subscribers and dropping stock prices in the first half of 2022.

Meanwhile, AMC has been looking for new ways to manage its debt load amidst a significant box office drop in Q3, while Regal’s parent company Cineworld has filed for bankruptcy in an effort to restructure itself and reduce its own debt.

While Cinemark and smaller chains may have the same financial struggles as their bigger rivals, the whole industry has suffered as Q3 domestic box office totals only reached $1.92 billion, down 32% from 2019. A major reason for this is because of a substantial decrease in wide theatrical releases compared to pre-pandemic years due in large part to production slowdowns caused by the pandemic.

“Theaters are likely paying a low film rent percentage to Netflix on this short window, and on content that they wouldn’t have otherwise had access to, so it’s incremental even if a relatively small amount,” said Wedbush Securites analyst Alicia Reese. “With the volume of releases still well below 2019, the more titles Netflix sends to theaters over the longer term, the better overall for theaters.”

Still, the new deal marks a turning point for Netflix and the major chains, which had been at loggerheads over theatrical windows. As Aron noted, Netflix and AMC have been in talks for years about a way to book the streamer’s films in theaters, without success. Insiders told TheWrap that Netflix and AMC got close to a deal on “The Irishman,” Martin Scorsese’s three-hour crime epic that earned 10 Oscar nominations, but the two sides couldn’t bridge the gap in talks.

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There’s a shortage of major releases

While Netflix won’t report box office grosses for “Glass Onion,” it’s unlikely to be one of the top holiday grossers compared to films that will be screening in far more than 600 theaters. Indeed, theaters are counting on a strong release slate in November and December to boost their year-end ticket sales.

As TheWrap previously reported, there are only 34 wide releases scheduled to open between September and December this year — which is well under the 47 that opened in pre-pandemic 2019 but also below the 42 wide releases that opened last year in the same period. But that shortage was felt more in September and October, as studios are saving what films they do have ready for release during the more lucrative end-of-year period.

When “Glass Onion” opens, it will be competing against November studio films such as Marvel’s “Black Panther: Wakanda Forever,” Disney Animation’s “Strange World,” Universal’s Steven Spielberg drama “The Fabelmans,” and Sony’s Korean War film “Devotion” starring Jonathan Majors and “Top Gun: Maverick” star Glen Powell. There’s adult-skewing fare like Universal’s “She Said” and MGM’s “Bones and All,” which will be trying to bring audiences back to art houses.

“Glass Onion,” a mystery film with a comedic bent and an ensemble cast, will add to what should be the most wide-ranging lineup that movie theaters have seen since the pandemic began during a time that historically has been popular for moviegoing. Even if it’s only in theaters for seven days, there’s no one in contemporary cinema quite like Benoit Blanc, and theaters will always be game for adding a unique, well-reviewed film to the marquee.

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