‘Knives Out’ Sequel Delivers in Theaters for Streaming Giant Netflix

The strong showing for the “Knives Out” sequel is likely to bolster arguments in Hollywood that streaming services should release more highly anticipated films like “Glass Onion” in theaters before sending them to their in-home platforms.

“Glass Onion” is expected to bring in $13.3 million in ticket sales Wednesday to Sunday, the person said, for average revenue per screen of $19,050. The movie proved a bright spot for exhibitors over a weekend that is traditionally strong for ticket sales but this year saw several high-profile duds from major studios such as

Walt Disney Co.

’s “Strange World” and the cannibal romance “Bones and All,” from United Artists Releasing.

Theaters aren’t releasing box-office performance figures for “Glass Onion” as part of their agreement with Netflix.

Netflix embraced an unusual release model for the film, debuting it in hundreds of theaters for just one week between Nov. 23 and Nov. 29, a month before a planned release on its streaming service.

In the past, Netflix has generally debuted its theatrical releases on a small number of screens a few days before films are available to stream.

In Hollywood, broad theatrical releases are typically defined as films appearing on thousands of screens for a month or more. Most major films are released several weeks, if not months, before they are available to stream or even rent at home.

Dani Walsh, 34 years old, and her husband in central Utah got a babysitter on Friday night and went to see the film at a sold-out 10 p.m. showing. She had purchased tickets by clicking a link that filmmaker Rian Johnson tweeted.

“We just felt excited we could even see it in theaters,” she said. “It pulled you right in.”

Her family discussed the film at the Thanksgiving dinner table before their trip to the theater, and some didn’t go due to the limited release.

At Netflix, executives have been divided over whether to pursue more frequent and broader theatrical releases for films they think could hit at the box office. Co-CEO

Ted Sarandos

has opposed doing so in part because of the marketing expenses associated with theatrical releases, and because he is concerned it could devalue Netflix subscriptions, the centerpiece of the company’s business model, The Wall Street Journal previously reported.

“We’re in the business of entertaining our members with Netflix movies on Netflix,” Mr. Sarandos said on the company’s November earnings call.

The first “Knives Out” premiered over Thanksgiving weekend in 2019 to $41.4 million and went on to gross $165 million in the U.S. and Canada, giving Hollywood a rarity in today’s business: a hit movie based on an original idea, and not derived from a comic book or the sequel to a well-known property.

The first movie was released by

Lions Gate Entertainment Corp.

, and Netflix purchased the rights to two sequels for nearly $450 million, among the biggest payouts by a streaming service for distribution rights.

Charli Ball, a 24-year-old murder-mystery fan in Newfoundland, was excited to hear that a sequel to “Knives Out” would be made, but was nervous when she saw that Netflix bought the rights because she feared she wouldn’t be able to see the movie in theaters.

When she learned that she could go see it on the big screen, she bought her ticket a month early and saw the film on its opening day with her mom.

“There’s something special about getting to watch something for the first time with a lot of people” as excited as she was, Ms. Ball said. “Everyone gasps and laughs together. It kind of makes me feel human.”

For years, major theater chains shunned Netflix films, worried that allowing a streaming service into their auditoriums would be supporting a company already accelerating consumers’ desire to watch movies at home. But as auditoriums reopened following Covid-19 closures, they were faced with a dearth of new releases from traditional studios, some of which had slowed production and shipped more movies to streaming services.

Suddenly the major chains were willing to play ball with Netflix, and the nation’s three largest—

AMC Entertainment Holdings Inc.,

Regal Cinemas and

Cinemark Holdings Inc.

—screened “Glass Onion.” The film appeared on about 600 screens in the U.S. and in some internationally. It ran in cinemas owned by all three major theater chains, a first for a Netflix movie.

Jake VanKersen, 40, a video producer in Chicago who also makes short films in his free time, went to the movies on Friday to see “Glass Onion,” opting to see it instead of Steven Spielberg’s “The Fablemans” because of the “Knives Out” film’s short run.

He is a Netflix subscriber and plans to watch “Glass Onion” again at home when it comes out.

Mr. VanKersen, who worked in a movie theater in high school, has seen a movie each month since then, except for 2020, when Covid restrictions closed down cinemas. He follows Hollywood business reporting closely and says he believes there is value in theatrical releases.

“I have a strong point of view: Send it to theaters first. You lose nothing and you gain so much,” he said.

Write to Erich Schwartzel at [email protected] and Sarah Krouse at [email protected]