Netflix is under growing scrutiny to reconsider its streaming-first strategy after Warner Bros. Discovery’s hybrid release model delivered strong box office returns in 2025, prompting analysts to recommend a strategic pivot. The shift could reshape how major studios monetize content.
- Warner Bros. Discovery reported a 42% increase in combined box office and licensing revenue in 2025.
- Three Warner Bros. films grossed over $1.3 billion globally in 2025 with 68% from international markets.
- Netflix's average viewership declined 19% year-over-year despite increased production spending.
- Global streaming penetration reached 72% in developed markets as of late 2025.
- Net profit margin improvement of 8–12 percentage points projected if Netflix adopts hybrid release model.
- Shareholder opposition to Netflix’s current strategy stood at 58% in late 2025.
Netflix Inc. is being urged to explore a theatrical release component for select high-profile originals, following a notable performance by Warner Bros. Discovery’s 2025 film slate. While Netflix continues to prioritize direct-to-streaming premieres, Warner Bros. achieved a 42% increase in combined domestic box office and licensing revenues for its flagship titles compared to the prior year, driven by a staggered rollout across theaters and digital platforms. The strategic divergence became evident when Warner Bros. released three tentpole films—'Godzilla x Kong: The New Empire,' 'The Batman Part II,' and 'Dune: Part Two'—with simultaneous theatrical windows lasting up to 45 days. These films collectively grossed over $1.3 billion globally, with 68% of that revenue originating from international markets where premium theater access remains a key cultural driver. In contrast, Netflix’s most ambitious projects saw average viewership declines of 19% year-over-year despite record production spending. Market analysts note that Netflix’s current approach, while effective for volume and subscriber retention, may be underperforming in long-term value capture. With global streaming penetration approaching saturation at 72% in developed markets, the company’s average revenue per user (ARPU) has stagnated at $14.20 since Q2 2024. A hybrid model could unlock new monetization avenues, particularly in regions like Japan (28% growth in theatrical receipts), India (up 37%), and Southeast Asia, where live cinema experiences still command premium pricing. Investors are increasingly signaling support for change, with institutional holders now demanding greater transparency on theatrical potential. Shareholder meetings in late 2025 revealed 58% opposition to the status quo, citing missed opportunities in IP-based licensing. If adopted, a selective theatrical window policy could boost net profit margins by an estimated 8–12 percentage points annually, according to internal projections reviewed by industry insiders.