Peeling Back the Layers of Netflix’s ‘Glass Onion’ Strategy

Here’s a mystery that might baffle even Daniel Craig’s master detective Benoit Blanc: Why is Netflix proceeding with such a strange rollout for “Glass Onion”?

On Wednesday, the streamer will release the follow-up to 2019’s “Knives Out” for a special limited run in about 600 theaters, including, in a first for a Netflix film, all of the big three U.S. theater chains (AMC, Regal and Cinemark). “Glass Onion” will play theatrically for one week only then disappear from screens for almost an entire month, before its streaming release on Dec. 23.

This isn’t what you would call an obvious recipe for success. Getting the major chains on board is significant (though Cinemark previously showed some of the streamer’s movies before the pandemic began to ease). But the footprint of “Glass Onion” will be much smaller than a typical mainstream theatrical release. Its predecessor, for instance, opened in about 3,400 theaters, per Box Office Mojo.

Then there’s the one-week-only run, which could of course be extended, though Netflix has shown no signs of softening so far. With a star-studded cast and name-brand recognition (the sequel is officially titled “Glass Onion: A Knives Out Mystery”), why not let the film run for a full month?

But this is Netflix we’re talking about, which has proudly and defiantly never done things by the Hollywood book, and there is a method to the apparent madness here that can be sleuthed out.

Theatrical runs are costly; they require hefty marketing investments, which Netflix has historically avoided for individual titles. Meanwhile, studios only receive half of a film’s box-office grosses, with the other half staying with the theaters, making the financial burden of a proper theatrical run even less enticing. Still, that hasn’t stopped many analysts, and reportedly even some Netflix executives, from believing the streamer’s movies could benefit from theatrical play.

It’s clear the “Glass Onion” rollout is a compromise between theater owners desperate for commercial movies, the advocates for theatrical at Netflix and co-CEO Ted Sarandos, who has continued to champion a streaming-first film strategy. Sarandos insists the release is “just another way to build anticipation … and build buzz and reputation for the film ahead of its Netflix release,” as he put it on the streamer’s Q3 earnings call.

“There are all kinds of debates all the time, back and forth. But there is no question internally that we make our movies for our members, and we really want them to see them on Netflix,” Sarandos added.

That may be, but there are more layers to peel back here. Last month, the Wall Street Journal reported top Netflix execs have pushed Sarandos to “experiment with releasing more Netflix original movies broadly in theaters,” while theater owners were reportedly blindsided and irked by the co-CEO’s comments on the earnings call. According to the Hollywood Reporter, “Glass Onion” had been “described as the first of several real tests trying to determine what kind of financial windfall an exclusive run in theaters could generate for Netflix.”

Indeed, if Netflix simply wants to build buzz for “Glass Onion,” why schedule the theatrical run so far out from its streaming debut? The choice of Thanksgiving weekend — the same slot in which Lionsgate released the original “Knives Out” three years ago — hardly seems incidental.

“Knives Out” performed strongly over the holiday weekend in 2019, racking up a five-day total of $41.4 million that recouped its entire reported production budget in one fell swoop. Netflix must be hoping “Glass Onion” can do decent business in the same slot, though box-office tracking predicts the sequel opening with a three-day total between just $6 million and $11 million. Still, that should be enough to place “Glass Onion” among the top-grossing films for the Thanksgiving weekend. (Aside from “Black Panther: Wakanda Forever,” holdover competition should be minimal.)

Of course, Netflix probably won’t be too bothered if it isn’t. The streamer, as per usual, plans not to report box office numbers and can easily shrug off a disappointing performance. Leadership is likely more concerned that an extended theatrical run would sap viewership from “Glass Onion” when it finally comes to streaming, or worse, deter potential subscribers who would have signed up to watch the film.

But as we all know, subscriber totals aren’t all that matter anymore. Netflix is actively trying to shift its narrative away from those numbers, stating in its Q3 shareholder letter that it will be “increasingly focused on revenue as our primary top line metric.” It would be foolish, therefore, for Sarandos & Co. to curtail a potential revenue stream, particularly with the company’s revenue growth dipping in recent quarters.

Yes, extending the “Glass Onion” run would require sinking more money into marketing the film. But having paid an astounding $450 million just for the rights to two “Knives Out” sequels, this is unquestionably the moment for Netflix to mount a major marketing push.

Not for nothing, “Knives Out” is also the most notable piece of IP the streamer currently has on the film side, and therefore represents its best hope for significant box-office dollars for the foreseeable future. Mounting a wide theatrical release for something like “Extraction 2” simply wouldn’t make sense, but giving “Glass Onion” a proper run — or at least a longer one — would be a stab in the right direction.