Netflix is the most successful streaming service in the world, but its rigid stance on theatrical releases is likely to hurt it in a new and big way. With some of the best movies and TV shows releasing on Netflix through the years, the streamer has built a reputation as one of the most dependable brands in home entertainment.

Their theatrical model, however, has been more unusual. While other brands have pivoted, with services like Paramount+ focusing on theatrical franchises, Netflix remains dedicated to a streaming-first model. This has been to the detriment of theaters and has unfortunately pushed some strong talent away from the service.

Building relationships between creatives and studios is important. Warner Bros. famously pushed Christopher Nolan away with some of their streaming-first decisions in 2021, and Universal reaped the benefits of this error with the incredible $975 million success of Oppenheimer. Unfortunately, it appears as though Netflix may be making a similar mistake.

Stranger Things’ Creators Are Leaving Netflix Due To Theatrical Policy

Ross and Matt Duffer, known professionally as the Duffer Brothers, are officially leaving Netflix after the final season of Stranger Things. The streamer’s theatrical policy has seemingly played a pivotal role in this decision, as they want to make “ambitious” and “large-scale theatrical films” per the announcement.

It was recently reported that the Duffer Brothers, creators of one of Netflix’s biggest hits in the show Stranger Things, were in negotiations for an overall deal between Paramount and Netflix. While their experience at Netflix has been positive, Puck‘s Matt Belloni previously revealed that Netflix’s stance on theatrical releases helped give Paramount the edge.

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Rather than focusing on films for theatrical release, Netflix is committed to producing content for its streaming service with only limited theatrical runs, generally only to qualify the films for Awards.

Netflix CEO Ted Sarandos believes that the theatrical model is outdated, and this has rubbed many creatives the wrong way. Most filmmakers have great affection for the big screen model, which has tended to cause greater cultural impact than movies released straight to streaming services.

There may be exceptions and benefits to this. KPop Demon Hunters is among the most culturally resonant films of 2025, and it was released directly to Netflix. The streamer’s model allowed them to invest in the riskier property when Sony felt less certain of its potential success, which was a mᴀssive boon for audiences.

However, the film’s impact, as well as huge KPop theatrical screenings, suggest it could have flourished further with a full theatrical run. With Sony receiving minimal profits from the mᴀssively successful film due to its streaming-first release, this may not have been the best option for them in the end.

Most major studios are pivoting back to theaters. Prey was released on Hulu, but Disney is putting the sequel, Predator: Badlands, in theaters. There is even talk that the sequel to KPop Demon Hunters might be released theatrically, eschewing Netflix’s support and influence, due to Sony retaining the rights to the film.

Netflix Not Bending Their Theatrical Model For The Duffer Brothers Is Telling

If Netflix is not willing to make concessions for the Duffer Brothers, this reveals a great deal about the company’s future outlook. While the upcoming Greta Gerwig adaptation of The Chronicles of Narnia has been granted a small IMAX run before streaming, this is looking to be the rarer circumstance for creatives working with the service.

Netflix has experimented with theatrical releases to an extent. The theatrical release of Glᴀss Onion: A Knives Out Mystery was an unusual one that saw the film playing exclusively in cinemas for a very limited period before releasing on the service one month later. There is no confirmation yet on how Wake Up ᴅᴇᴀᴅ Man will be released.

If Narnia is a success in cinemas, many hope that this could cause Netflix to rethink its outlook to an extent. Unfortunately, this is unlikely. Data on theatrical releases and how they generate income for the studio is already available to the streamer, and does not seem to be budging it on its outlook.

Netflix, instead, is set on furthering a paradigm shift in the culture away from theaters. Only a few years ago, most other studios were with them, with Disney+ and Paramount+ both commissioning a significant volume of content meant for direct release to their streaming library.

These studios have since changed their outlooks. Disney pivoted to theatrical with Moana 2‘s $1 billion success before releasing the film to increased streaming success months later. The data is available that makes it clear that theatrical is the better move for movies, but Netflix does not appear to be convinced by it.

While Disney, Paramount, and other studios are in the movie business, Netflix is in the tech business first and foremost. Their service has proven to be incredibly successful, but it remains to be seen how they might function if they lose all of their best creative relationships.

With the potential of missing out on the future of both the Duffer Brothers and KPop Demon Hunters, Netflix might need some flexibility to remain relevant long term. While the streaming service is primarily a tech product, it still requires original work developed in mutually beneficial partnerships with strong creatives to survive.