Netflix Reportedly Looking to Purchase Movie Theaters

In what appears to be an effort to legitimize its films and contend for more Academy Award nominations (and possible wins), Netflix is reportedly considering buying movie theaters in Los Angeles and New York City.

Being able to debut original Netflix movies in theaters would give the streaming service, known for dramatically changing the TV industry while simultaneously clashing with movie theater owners, a boost during Oscar season.

According to a report from the Los Angeles Times, people familiar with the situation say the theaters would be used to give greater exposure to the feature and documentary titles Netflix is hoping to push into the awards race.

Netflix executives initially considered purchasing the Los Angeles-based Landmark Theaters, the circuit co-owned by Mark Cuban, but backed off the idea because they believed the sale price was too high. The Landmark theaters are well known for attracting awards voters by running first-run features, documentaries and foreign films during Oscar season.

Sources close to Netflix told the Times that the company has no current plans to buy Landmark properties. Landmarks has three Los Angeles locations and 53 theaters across the U.S.

"Netflix wants to establish itself as a critical exhibition source on both coasts," a source told the Times. "For awards consideration they need to be able to release pictures on screens in major markets."

Netflix has released titles simultaneously on the streaming service and in theaters in the past: Beasts of No Nation, Okja, The Meyerowitz Stories and Mudbound, which was nominated for four Oscars this year.

But because the films are available to stream immediately on Netflix, the company misses out on the buzz and word-of-mouth anticipation that sustain award-winning films from competing studios. Being able to own and keep awards titles in release for longer could help Netflix gain more momentum in the awards area.

The news comes hot on the heels of Netflix announcing that it "regrets" its films not being able to compete at this year's Cannes Film Festival due to the fact that none of its films circulated in France.

"We regret our films not being able to compete at this year's Cannes film festival," read a letter to Netflix stockholders. "The festival adopted a new rule that means if a film is in competition at Cannes, it can not be watched on Netflix in France for the following three years. We would never want to do that to our French members."

"We will continue to celebrate our films and filmmakers at other festivals around the world but unfortunately we will have to sit out Cannes for now so that our growing French membership can continue to enjoy our original films," the letter adds.

That was the only "bad" news Netflix gave in its stockholder letter; the company also announced that it reported a total of 7.41 million new subscribers in the first quarter of 2018 — a 50 percent spike from this time last year and almost a million more than Wall Street analysts projected the streaming giant would reach by this time.

All told, Netflix now has 125 million subscribers around the world, as compared to 117.6 million this time last year. The company's revenue has also skyrocketed, rising 43 percent since last year, totaling $3.7 billion for the quarter.