How Breaching 45-Day Exclusive Window Will Devastate Movies & Why Netflix’s Commitment To Theatrical Is Misleading – Guest Column

Editor’s Note: Joseph M. Singer is a producer/film financier and former studio executive and the founder of Elixir Media. He is Managing Principal/CEO of a company that specializes in M&A; he has contributed as producer and financing consultant to most of the major studios, negotiating four multiyear slate co-financing deals where Elixir bankrolled 25% to 33% of pictures. Singer has been involved in over 120 major studio feature films. This is a follow-up to his December 19 guest column arguing why no massive media company should be allowed to acquire Warner Bros Discovery.

The Relevance Of An Exclusive Theatrical Window For The Survival Of The Global Film Industry 

Today’s motion picture industry stands at a critical juncture. The traditional mechanisms of distribution are being challenged by the immediate demands of streaming, digital scale, and platform-centric business models. A key component of this evolution is the “exclusive theatrical window” (i.e., the minimum period between a film’s theatrical release and its first lower-priced release, which begins with Transactional Video on Demand. Windowing is now in jeopardy of being reduced to a level that threatens the survival of theatrical distribution. This stacked sequence distribution model is the foundational structure that drives value creation and creative diversity in the motion picture industry. 

Over the past half-century, the exclusive theatrical window has shrunk from a six-month standard in the 1980s and 1990s to 90 days in the post-millennial period. It then settled into the post-pandemic range of 60 to 45 days for most studio films.

It is important to note that setting 45 days as the minimum exclusive theatrical window is based on quantitative data from all major and mini-major studio films. If that 45-day minimum before the TVOD window is breached, that inflection point leads to massive erosion of theatrical revenue. If this theatrical window is destroyed by a merger or any other process, the foundational structure that has driven profitability in the motion picture industry for decades will collapse, posing a mortal threat to the long-term sustainability of the global film ecosystem. This is not hyperbole; it is a fact supported by data and disciplined analysis.

To clearly explain the implications of preserving an exclusive theatrical window for the future of the film industry requires an examination of 1) the role of an exclusive theatrical window in studio economics, 2) the empirical consequences of window compression, 3) changes that would occur in creative risk-taking and slate composition if an exclusive theatrical window was significantly reduced, and 4) how shortened windows are central to understanding the massively adverse implications of the pending Netflix acquisition of Warner Bros. Discovery (as well as Universal Pictures continuing its 17-day window as it spins off its cable business). 

The Role Of An Exclusive Theatrical Window On Studio Economics

In the motion picture business, a “window” is a period of time during which a film is available exclusively through one distribution channel before moving to the next. This stacked sequence of major distribution channels is designed to capture value from different consumer segments at various price points, thereby maximizing the lifetime value of a film.

Currently, these are the sequential distribution windows that a film goes through:

As a film moves from its theatrical window to downstream platforms, this stacked sequence of windows allows studios to get paid multiple times for the same movie.

The post-theatrical windows are a high-margin revenue stream because there are almost no costs associated with them.

The theatrical window serves as a loss leader. Only the rare, most successful films will break even from the theatrical window alone. Most films rely on post-theatrical windows to generate enough revenue to break even or make a profit. As the theatrical window erodes, so will these downstream markets. Windowing is the lifeblood of studio economics; without it, filmmaking dies.

Hearing Before The Senate Subcommittee On Antitrust, Competition Policy, And Consumer Rights  

On Tuesday, Netflix’s Ted Sarandos testified before the Senate subcommittee on Antitrust, Competition Policy, and Consumer Rights. It’s important to note that Netflix’s claim about protecting the 45-day window was misleading. When Netflix says it will protect Warner Bros Discovery’s 45-day window, they mean their movies will go to SVOD 45 days after the theatrical release. The industry standard is 45 days to TVOD (PVOD, iTunes, Blu-ray, etc.). SVOD typically becomes available 90 to 120 days after theatrical release. No studio consistently goes straight from theatrical to SVOD without a meaningful TVOD phase anymore — despite what executives sometimes imply.

The industry often talks about “short windows,” but in practice, Pay-1 (SVOD) has settled into a de facto three- to four-months wait, mainly because TVOD generates significantly higher profits.

The reassurance that Netflix provided to protect the 45-day window for SVOD critically omits the preceding 30- to 60-day exclusive TVOD window and effectively halves the interval between theatrical release and SVOD for almost all films.

This gap between a 45-day window and a 90-day window for SVOD is the difference between saving theatrical and allowing it to die. Moving SVOD to 45 days after theatrical release would render most films unprofitable and inflict a mortal blow to major studios, film exhibitors, consumers, and tens of thousands of workers. I estimate that job losses, including direct and indirect employees, exhibition workers, and others, would exceed 250,000 people over the first five years.  

The Empirical Consequences Of Window Compression

A. Reduced theatrical window. Without windows, there is simply no programmatic and compelling reason for most audiences to go to the theater, regardless of the film. Short windows teach the audience to “wait out” the theatrical run. If consumers know they can simply rent a film, or it will be on a service they already pay for in three or four weeks, the incentive to buy a theater ticket significantly diminishes. Over time, the audience will view the theater as an optional inconvenience and an unnecessary cost. If this shift in consumer habits cuts just 10%–30% from box office revenue, it can be the difference between a profitable film or a tax write-off. We have modeled this shift and estimate that the loss in box office would actually be in the range of 30%-50%, which would destroy major studio output by approximately 50%.

Theatrical revenue, unlike streaming, is direct and transparent, with no ongoing “servicing” or “churn” costs. Studios retain approximately 50%–55% of domestic box office gross and 43% of international. This is “clean” liquidity. Replacing this theatrical revenue with amortized, indirect streaming favors the platform over the content creator, causing theatrical to lose the high-margin box office. And because the market will have shrunk, studios won’t be able to replace this loss with streaming revenue.

Moving revenue from a direct-transaction model (theatrical) to a subscription/bundled model (streaming) leads to lower return on invested capital. That’s because capital is tied up in content that doesn’t “pay back” in a clear, front-loaded cycle. Without theatrical “hits” to provide immediate cash flow, studios have less capacity to reinvest in new production. Streaming-first models obscure performance metrics, making it impossible for studios to accurately forecast the value of their library.

Conversely, a protected theatrical run creates a “durable asset.” A rushed release creates “perishable inventory.” The film library is a studio’s single most valuable asset. If films were not widely released theatrically – with strong marketing campaigns to support them – studios will lose a material portion of their library’s valuation.

A constricted theatrical window not only limits high-revenue theatrical attendance, it also erodes the “event status” required to drive a film into the cultural zeitgeist. Without the cultural significance and primacy of a film via a protected theatrical run, most films simply disappear into the vast, undifferentiated sea of content, losing the revenue and prestige that drives long-term licensing value. Thus, a theatrical window of sufficient length is vital to protect the level and duration of cultural primacy needed to create enduring value. Should that capacity be limited, with no delay or unpredictability in when a film would move to TVOD and later to SVOD, there is little doubt the theatrical business would be a fraction of its current size by the end of the decade.

If a Warner Bros merger closed today without a 45-day or longer theatrical window and without the unpredictability of when a film moves to TVOD, the theatrical business would be half its current size by 2030. It would also result in fewer jobs across the industry, including for creatives and crew, as well as widespread theater closures.

B. Reduced downstream revenue. If the high-margin theatrical window is shortened or eliminated, it won’t simply degrade theatrical revenue; the entire ecosystem of stacked revenue streams that support big-budget filmmaking will collapse.

Streaming has been a boon to major studios. TVOD, SVOD, AVOD and international output deals are all generating massive post-theatrical revenue. But if windows shorten, theatrical as we know it will be destroyed, as the downstream revenue films depend on won’t exist. A weaker theatrical launch causes substantially lower valuations across TVOD, SVOD, AVOD, physical media, and international markets. By collapsing the theatrical window, studios sacrifice high-margin revenue, which rarely results in a proportional increase in streaming subscribers, leading to a substantial net loss in the film’s total lifetime earnings.

The 45-day minimum window is not a preference — it is the economic foundation of a global film culture. Shortening the window doesn’t expand the audience; it simply migrates high-paying customers to lower-margin platforms, permanently devaluing the intellectual property. When a film goes to streaming too quickly, its “scarcity value” is destroyed. This materially softens theatrical demand and forces TVOD — and all premium prices — to drop sooner to attract remaining interest.

Data consistently refutes the idea that theaters and streaming are in a zero-sum battle for different audiences. Studies show that frequent moviegoers and frequent streamers are often the same people. These “super-consumers” are willing to pay for both experiences. When the window is shortened, they convert from “dual-payers” to “home-only viewers,” stripping the studio of the second transaction.

C. Cost increases and reduced creative risks

With shortened windows:

Why Studios Experimented With Shorter Windows

The push toward compressed or day-and-date releases was driven by extraordinary, short-term pressures rather than long-term economic sustainability:

The evidence from this “experiment” is now clear. While these strategies boosted streaming metrics, many films lost money. The idea that releasing films via premium streaming, closer to their marketing spend, would significantly increase revenue turns out to be perception rather than truth. There is ample empirical data showing that TVOD and all streaming revenue are not materially enhanced at 17 or 30 days post-theatrical release compared to 45 or 60 days post-theatrical release. 

The only economic result of this experiment was the cannibalization of theatrical revenue, which increases risk for a single picture and across a major studio slate. 

Last year, Disney extended the theatrical windows for several films beyond 100 days. It was also the first year that Disney+ generated more than $1 billion in profit. This is just one example of a studio concluding that the experiment failed.

The Existential Risk Of A Netflix–Warner Bros Merger And Universal’s 17-Day Window

Taking the above into account, one can see why the potential acquisition of Warner Bros by Netflix could represent a tectonic shift that may dismantle the economic foundation of the entire film industry. Beyond a mere merger of assets, this union could jeopardize the ancillary market ecosystem that sustains theatrical filmmaking.

If Netflix’s historical opposition to exclusive theatrical windows becomes the new standard for Warner Bros’ massive library, it would trigger a catastrophic devaluation of subsequent windows. Netflix’s behavior over more than a decade says: No durable commitment.

TVOD would be marginalized. Pay-1 licensing — worth billions — would erode. Long-tail value would collapse.

It bears repeating: When Netflix speaks about protecting the 45-day window, it is misleading the public and the regulators. Netflix means that it would go to SVOD 45 days after theatrical release, instead of the typical 90-120 days post-theatrical release.

Netflix’s philosophy is fundamentally at odds with the theatrical model. While regulatory testimony may soften the rhetoric, historical behavior almost certainly tells the real story. Netflix operates on a business model that practically demands shorter windows to optimize profits, which is its obligation to shareholders.

A Netflix-WB merger is not just a business transaction. It is a structural threat to theatrical filmmaking itself.

Universal’s 17-day window on multiple films a year is also devastating. It is another way to condition audiences to wait for the film to be available at home (and cannibalize future revenue). Uni started this in 2020 during the pandemic, and unfortunately, continues the practice on certain films. The other major studios tried the 17-day window and quickly ended it due to the economic damage it caused. At that time, Universal’s owner, Comcast, was a cable company. However, now that it is spinning off most of its NBCUniversal cable networks, it does not make sense that they still have a 17-day window on certain films. 

A hit streaming film is unlikely to materially change a platform’s profit based on how many people watch a specific show. However, theatrical films follow a variable-revenue model that relies on high-margin per-ticket sales and box office performance for downstream revenue. Massive successes lead to outsized returns for the studios.

Conclusion

Those who advocate for shortened windows would have us believe they are modernizing an antiquated theatrical business model. They would argue they’re capturing more value by growing revenue streams. However, the data and logic show that this is an illusion, beneficial only to those companies that value subscriber growth and streaming revenue as the sole endgame. One market segment is not the end game; a vibrant diversified, creative and growing film ecosystem is.

The theatrical window is not an antiquated tradition. It is a financial shock absorber and price-discovery mechanism. It is an essential component of the macroeconomic machinery upon which the entire film industry depends. Removing it does not modernize the studio; it fundamentally breaks the engine and shrinks the business.

Short windows kill a film’s “legs” in theatrical and all ancillary markets. The perceived value of a film as a “must-see” asset is permanently lowered. PVOD relies on scarcity. Remove the gap, and the premium vanishes.

Remove the financial floor and the industry contracts permanently. Theatrical windows are the mechanism that allows scale, diversity and creative risk. Without them, the film business does not evolve — it shrinks into irrelevance and disappears into a smaller, less creative version of itself.