Netflix’s infiltration into original theatrical-quality motion pictures officially began with the festival and limited theatrical release of Beasts Of No Nation, a film its director Cary Fukunaga and star Idris Elba thought would be a traditional prestige picture theatrical release when they signed on. Ted Sarandos has led the charge into new content for Netflix, and he hasn’t been shy about criticizing the old-school ways of theater owners who now boycott his slate or label it glorified TV fare. The past weekend saw numerous prestige films under-perform, despite glorious reviews. Beasts Of No Nation hardly rocked movie house turnstiles, but the film was taken seriously by reviewers at festivals, and it certainly is the only one in the current crop that turned a profit for its filmmakers before the movie even opened. Here, Sarandos explains why Beasts Of No Nation is already a disruptive success, despite a small theater penetration that fell in its second weekend and a tiny gross total.

Ted SarandosDEADLINE: Judged strictly as a theatrical box office play, Beasts Of No Nation’s performance is small. Of course, that’s not how the Netflix business model makes money. In the overall scheme, how has this first high-profile feature worked out?
SARANDOS: The good news is, two weekends in, we focused on making the film available to all 69 million Netflix subscribers around the world, in more than 50 countries. And we focused on giving consumers the choice to see it in theaters, in the places where we could, with screens in the U.S. and UK. But our focus has always been on the total audience. You know we famously don’t give out viewing numbers.

DEADLINE: Feels like you might make an exception here?
SARANDOS: It is worth sharing that this movie, in North America alone, has over 3 million views already. Which I think is a bigger audience than any specialty film could ever hope for in its first two weeks of release, and maybe for its entire run. And we’re just starting. We are just thrilled with the total audience reach of this film, not just in North America but the world. In the first week of release, Beasts Of No Nation was the most watched movie on Netflix, in every country we operate in. Even Japan, and I’m only calling out Japan because most specialty films don’t do very much of their box office outside the U.S. at all, let alone in Japan. Studios have trouble opening those movies in Japan. This was No. 1 in really diverse places in the world — Japan, Brazil, Mexico, places where these films typically never even open. It’s been incredibly gratifying to see these audiences respond to this film.

Koko
8 months
Netflix has channels?
scoo
8 months
I couldn't get halfway through this boring film. I had to flip channels. Even the normally hot...
naswg
8 months
Easy. Netflix bought it for more than it cost to make.

beasts of no nationDEADLINE: What has been your biggest challenge in keeping critics or media from marginalizing this film? These filmmakers took a risk that you would be not only get it seen but have it considered for theatrical awards. What have you done to turn around preconceptions as you’ve tried to prove this model as a viable way to release a prestige picture?
SARANDOS: We’re not trying hard to turn around any perception. We said we would deliver the film a big audience, and we have been doing that. The interesting thing, in the early coverage, the success and failure of limited-release films is measured in a couple of thousand people. Here, we’re talking about an audience of over 3 million, and just in North America. So we have brought and we will continue to bring a very large audience to this film — and not just in North America but around the world, and that is a unique thing we brought to this release strategy. There’s only so much we can do about what happens in the theater. We can make it available and try to book it, but if theater owners don’t want to book it, they won’t book it. Whether it’s in a theater or at home, our focus is on the total audience of the film. We just want people to see and love this movie. And they are seeing, and loving, this movie.

DEADLINE: Given the money Netflix can invest, and the importance of a theatrical presence to filmmakers and the animosity some theater owners have for Netflix, ever consider just buying and operating a certain number of theaters where you can place what will be a growing number of original films from your slate, with your main motive to satisfy that requirement to your filmmakers?
SARANDOS: Operating theater is definitely not in our wheelhouse. We have plenty on our plate — operating the largest global streaming service on the planet and trying to bring films like this to a big audience. Versus worrying about whether the seats are comfortable and the popcorn’s fresh. I don’t think this is a reflection of people’s preferences. If you want to go out and see a movie and sit in a dark room with strangers, it’s not an experience you can replicate at home. But it is a very good experience, to watch a movie at home in 4k, in the comfort of your living room. That’s the way most people see their movies. It’s a very sexy thing to talk about whether there’s a feud, but I think what’s really happening here is that we’re offering consumers a lot of choices they didn’t have just a few years ago. It’s interesting, the whole debate and us spending a lot of time talking about windows, and theater owners and splits. Consumers, they really don’t care about any of that. They just want to make a great movie, and I don’t think they make the same distinction we do, as to where they see it. Watching a movie is an emotional experience, and we have a bunch of business metrics we attach to that emotional experience. But the consumers don’t feel any of those. To me, cinema is not a movie or a TV screen, and it’s not a seat in a building versus one in your living room. It’s the art of motion pictures.

brad pittDEADLINE: Pictures like the Brad Pitt starrer War Machine and others will be proving ground for you as you continue to make theatricals. How big a budget does your business model allow for? If a $100 million-budget film became available with stars and plots that please your subscriber base, could you step up to that?
SARANDOS: Yes. There’s no financial constraints that say we couldn’t do that. It might not make sense, though, depending on the profile of the movie. But if you look at a movie like War Machine or Adam Sandler’s The Ridiculous Six coming in December, these are studio-sized films. We didn’t make those films for less than Sony or Warner Bros would have. Same with War Machine. You don’t get Brad Pitt to come and make movies on a small scale. There are some other ones, like the film we’re doing with Angelina Jolie, where they are struggling to get made. And we have a better economic model and a large global platform. I think filmmakers of all different profiles are embracing that.

DEADLINE: You opened Beasts Of No Nation on 31 screens and I imagine you four-walled those. This week that number dropped 10…
SARANDOS: No, they weren’t four-walled. They were programmed by Landmark, and we held 20 of those 30 or so screens.

DEADLINE: Will you push for more screens, or have you satisfied your commitment to the filmmakers to provide an opportunity for people who might want to see it on a movie screen?
SARANDOS: That’s out of our control. We’ll keep the screens for as long as we can and continue supporting the film with media. We’re also gearing up to release the film theatrically in Africa, in Ghana and Nigeria. Netflix is not there, and obviously the film is of local importance, so we’re doing that as well. We only released the film theatrically in the UK and the U.S., and it played festivals in Toronto, Venice and just this weekend it played to an unbelievable audience at the Japan Film Festival.

DEADLINE: What is the reaction from the filmmakers and cast that took this leap with you?
SARANDOS: The producers of the film and the creative talent, and us, we’ve all been thrilled with the reach of the film, and with the reviews and the critical response — and at a time, by the way, when the whole business has gotten pretty uncertain, and things that used to work aren’t working like you planned or hoped. We are in a very interesting time in this business, and I hope what people see here is opportunities for movies to get made that audiences are going to love but are increasingly difficult to get made. Films of a certain budget, of a certain nature and certain topics. If it’s not a special-effects spectacular, there’s no place for it anymore in the global box office. Today, I think the broad audience we are reaching with Beasts Of No Nation, that’s incredibly encouraging.

Film Title: Steve JobsDEADLINE: When you consider the number of people you say saw Beasts If No Nation, and then you look at a critically lauded movie like Steve Jobs or The Walk, struggling to make back their budgets and P&A spends, you make a compelling case here for a new model. Launching specialty films right now is a very costly and inefficient exercise, with no guarantee of financial success. You, at least, can fairly reliably guarantee a high number of eyeballs.
SARANDOS: Yes, and the eyeballs were delivered without risk. For the producers of Beasts Of No Nation, this was profitable for them before we released the film. That’s also very unusual in independent film.