Netflix's Sarandos pledges 45-day theatrical window for Warner films

Netflix pledges to keep Warner Bros. theatrical model

Netflix co-CEO Ted Sarandos has made his most specific pledge yet to preserve Warner Bros. Discovery's theatrical business if his streamer acquires it. He committed to maintaining a 45-day theatrical window for major Warner films, followed by a premium video-on-demand (PVOD) window, before they would hit streaming.

Sarandos made the comments on the podcast The Town With Matthew Belloni. He was pressed on how Netflix would handle future tentpole releases like sequels to Superman and The Batman.

“The core thing is that it will feel traditional in how long it is in theaters and how long it takes to get to HBO Max,” Sarandos said. He promised "no coded talk," stating films would not go straight from theaters to Max.

The strategy behind the PVOD window

This multi-stage release strategy is already used by studios like Universal. The logic is that each window taps a different customer base and revenue stream.

PVOD targets cost-conscious viewers, like families, who want a new film but find a theater trip too expensive. This generates concrete revenue from a single title, unlike the abstract value of adding it to a streaming library.

Theaters and many studios argue longer windows protect profits. They worry training audiences to expect quick streaming availability devalues tickets and digital rentals.

Sarandos reverses his previous stance

Sarandos has historically been critical of long theatrical windows, calling them consumer-unfriendly. His position has shifted dramatically during the pursuit of Warner Bros. Discovery.

He now argues Netflix must sustain the theatrical model to get full value from the proposed $83 billion acquisition. “We’re buying a business model and we’re going to invest in it and grow it, not kill it,” Sarandos said.

He has delivered this message in multiple interviews and even in testimony to the Senate Judiciary Committee.

A rival bidder re-enters the fray

Sarandos's comments come as Warner Bros. Discovery has reopened negotiations with a competing bidder. The company granted a seven-day window to a consortium of Paramount and Skydance Media, known as PSKY.

“During this period, WBD will engage with PSKY to discuss the deficiencies that remain unresolved,” Warner Bros. stated Tuesday. This allows the rival group to present a new offer.

Sarandos told CNBC that Netflix granted Warner a waiver to have these talks. He framed it as a move to create clarity after Paramount's aggressive tactics.

“Paramount had been making a ton of noise, flooding the zone with confusion for shareholders,” Sarandos said. “So we’ve given the opportunity to get those shareholders exactly what they deserve, which is complete clarity and certainty.”

What a Netflix-owned Warner would look like

If Netflix succeeds, its management of Warner Bros. would represent a major strategic pivot. The streamer would be committing to a traditional studio structure it has long avoided.

Key elements Netflix would inherit and has pledged to support include:

• The 45-day theatrical window for major films
• The subsequent PVOD sales window
• The HBO Max streaming service
• Warner's vast film and TV production pipelines

Sarandos is betting that the value of Warner's content library and brand outweighs the cost of maintaining a business model Netflix once sought to disrupt. The coming weeks will determine if shareholders agree with his vision or opt for a different buyer.