2026-01-07 19:39:06
When looking back at the origins of the "hackquisition" model for acquiring startups, Microsoft was clearly the godfather of such deals. Their March 2024 deal to not buy Inflection, but instead to bring on much of their team was groundbreaking in this regard, and it has led basically all of their rivals to copy (or expand upon) the same general structure.1 But actually, there was almost a "hackquisition" that Microsoft did before the Inflection deal... OpenAI.
I've long thought that the Inflection deal structure, and thus, the "hackquisition", was born out of a deal Microsoft nearly had to execute under duress. In November 2023, OpenAI's board ousted CEO Sam Altman and the ensuing weekend saw Microsoft, led by Satya Nadella on down, scramble to save the situation. The company had invested around $13B into OpenAI at the time – a lot of money in those days2 – and they were worried it was going to go to zero overnight.3 So they implemented a plan. Either OpenAI would reinstate Altman, or Microsoft would just hire the entire company.4
Sound familiar?
But wait, don't "hackquisitions" also involve some level of IP rights? You know, "non-exclusive licensing agreements"? For show, if nothing else? Yeah, Microsoft didn't need those here because they already had far more rights to OpenAI's IP, thanks to their deal terms following their massive investments. So yes, this would have been the first "hackquisition". And now we know how much it would have cost.
Thanks to text messages from OpenAI COO Brad Lightcap, uncovered as part of Elon Musk's lawsuit against the company, to Nadella and Altman, we have the number. $25B. Or $29B if they wanted to include Ilya Sutskever. Which of course Microsoft would have, but given his role in said coup d'état of Altman, it's not clear that would have happened...
As relayed by Rocket Drew of The Information:
Lightcap disclosed Sutskever’s financial stake after the OpenAI board fired CEO Sam Altman and Microsoft CEO Satya Nadella prepared to hire Altman and OpenAI colleagues. Lightcap wrote to Altman and Nadella that paying OpenAI employees for their equity would require $25 billion excluding Sutskever’s equity, or $29 billion including Sutskever’s vested units. (It’s not clear how much Sutskever had in unvested equity.)
The day following the exchange, Microsoft chief technology officer Kevin Scott said publicly that Microsoft would hire and match the compensation of every OpenAI employee who chose to resign from the startup, in the event that Altman was not reinstated at OpenAI. Those hires never happened because the OpenAI board rehired Altman later that night.
So yeah, Microsoft would have paid at least $25B, and perhaps $29B to do that would-have-been "hackquisition". That's not too surprising since OpenAI was valued at... $29B during secondary sales that were taking place at the time. But the math wouldn't have been quite that straightforward.
The key bit to remember here is that no one actually owned equity in OpenAI at the time. This was long before the conversion to the public benefit corporation, and everyone from Microsoft on down simply had percentages of the rights to future profits. Microsoft was clearly willing to "true up" those employees and match the on-paper value, and seemingly assume that those employee shares equated to 100% ownership of the company. Of course, there were other investors in OpenAI, even beyond Microsoft. So the bigger question remains if they would have given those other investors anything.5
That is, of course, another key component to the "hackquisition", paying out investors to ensure they go along with the deal. Given how freaked out those investors were during "The Blip", it seems reasonable to think they believed they'd be getting nothing for their investments. But it's also probably reasonable to think that Microsoft would have given them something to avoid future litigation, if nothing else. Again, this is what Microsoft did with Inflection investors several months later.
And if that's the case, that probably would have pushed the deal well past $30B – especially if you consider compensation for Altman, who famously had no direct equity – or even "Profit Participation Units" – in OpenAI at the time (and apparently still doesn't). But if Sutskever was going to get $4B... Microsoft probably would have wanted to keep Altman happy, in order to keep him.
Anyway, there was one massive shareholder Microsoft didn't need to pay out: Microsoft. Everyone now knows they own 27% of OpenAI, but again, at the time no one had any equity. Microsoft had the right to 49% of those profits (though actually a much higher percentage until their initial investment was paid back) and undoubtedly could have and would have argued that meant they "owned" 49% of the company. Unless it was regulators who were asking.
Had anyone else tried to "hackquire" – or even actually acquire – OpenAI, they probably would have wanted at least $15B for their troubles, if not more. And it highlights just how killer of a deal Microsoft would have gotten here.
Call it $30B - $35B to effectively buy OpenAI in late 2023. Given that the company is currently raising around an $850B valuation just over two years later...
Alas, by the end of the weekend, Altman was back in place atop OpenAI and "The Blip" was just that, a blip. This is clearly the outcome Nadella and Microsoft wanted, undoubtedly due to regulatory concerns if nothing else. But the mad scramble also pretty clearly planted the seed that would grow into the "hackquisition" model.
One more thing: if Sutskever's stake was worth $4B back at that $29B valuation, it would be worth $117.2B at that $850B valuation. Obviously, there has been a lot of dilution, but he also stayed and vested another six months before he was off to start Safe Superintelligence... So let's guess that Sutskever's OpenAI's stake is likely worth around $100B now – assuming he didn't sell in any of these tenders...
1 Notably bringing on board OpenAI co-founder and Inflection CEO Mustafa Suleyman to head up Microsoft's AI efforts, presaging Google doing a similar move with Character.AI's Noam Shazeer and Meta doing that with Scale AI's Alexandr Wang... As an aside, the $650M price point seems quaint today! I mean, NVIDIA just did a "hackquisition" for $20B! ↩
2 Also sort of wild that Microsoft apparently hasn't really committed more money since that point. Sure, they've "participated" in some subsequent fundraises, but presumably only token amounts. That shows just how clearly they've outsourced the support of OpenAI to SoftBank and others post "Blip". They clearly decided they needed to try to own AI themselves... ↩
3 To be clear and fair, a lot of that money was in compute credits, and future capital commits. So Microsoft undoubtedly wouldn't have actually lost $13B, but still many billions. And arguably a lot more if you take into account where OpenAI is valued today... ↩
4 Well, anyone who wanted to come aboard. Which, judging from the immediate reaction from the employee base, seemed to be pretty much everyone. ↩
5 And I won't even go into the "grants" Elon Musk made to OpenAI at its inception. He clearly – clearly – would be suing Microsoft right now over those, either to block/unwind any deal, or get paid. But it may have been a harder argument without any legal equity conversion... ↩
2026-01-07 03:07:23
Yes, I'm linking to The Daily Mail. But it's (potentially) James Bond news, and there's almost certainly some smoke here, if not exactly fire yet:
The quest to find the next James Bond may be over.
Sources have told The Mail on Sunday that Callum Turner – the bookies' odds-on favourite to take over from Daniel Craig – has been telling friends the role is his.
One source close to the Fantastic Beasts star said: 'He's been blabbing all over town. Callum is the new Bond, it's been confirmed. Everyone in his circle is talking about it. It's the worst-kept secret going.'
Over the past few days, a number of other publications have cited The Mail's piece with varying degrees of matter-of-factness. But Jordan Ruimy seems to both support/augment the reporting with his own for World of Reel:
Over the weekend, I reached out to my strongest 007 source to ask about these latest rumors, and it turns out there is some truth to them — but, as usual, The Daily Mail is over-reporting what is so far not a done deal. Yes, Turner has caught the attention of Villeneuve and Amazon/MGM, and yes, he is due for a screen test in the coming weeks, but he still hasn’t nabbed the role. Not even close. My source continues to maintain that Jacob Elordi remains in the mix as another potential candidate.
The fact remains: Villeneuve is currently in post-production on “Dune: Part Three” and won’t commit to any actor until that picture is locked.
It was previously known that Villeneuve wouldn't commit to picking the next Bond until Dune 3 was wrapped. It's possible he made a move/met with Turner after filming wrapped, but they're clearly still in post-production for his massive blockbuster due out in less than a year. Steven Knight is undoubtedly busy writing Bond 26, so it's certainly possible that he's taking some meetings for Amazon – which is still a weird thing to write.
Regardless, Turner clearly has to be the favorite at this point, and while a studio obviously shouldn't make such a decision based on the actor's fiancé... well, it can't hurt to have Dua Lipa perfectly teed up for a theme song? That's just a fun added wrinkle to all of this. Aaron Taylor-Johnson also has a talented partner, but her skillset, directing, is covered here...
Interestingly, Turner and Taylor-Johnson – long the front-runner based on clearly also premature reports/rumors – are the same age at 35. (Turner is about four months older.) That is also pretty much the perfect age for James Bond per Ian Fleming's novels. And that's perhaps more important than usual here as:
Knight is rumored to be drawing heavily from Fleming’s earliest novels, which could signal an ‘origin’ Bond — revisiting his Royal Navy background, his recruitment into MI6, and his eventual attainment of ‘00’ status. The story could even be set in the ’50s or ’60s.
This is an angle that a lot of people, myself included, have long been clamoring for. The Bond-trying-to-make-his-way-in-the-modern-age trope has been well overplayed at this point. Why not take him back in time. We know Knight is good with period pieces – the Peaky Blinders movie is due in two months – Villeneuve would be a total wildcard there. His movies are all contemporary or Blade Runner 2049, or well, Dune.
Jacob Elordi is an interesting wild card here. Few actors (outside of the decidedly non-British Timothée Chalamet) have more buzz around them at the moment. But he may be a click too young for the role at just 28. Yes, he's technically Australian – but so was George Lazenby – and Elordi certainly plays English well enough. So perhaps Elordi finds himself in a Pierce Brosnan situation, where he reports back for his mission at a later time...
Anyway, I'll just note that I (almost quite literally) ran into Callum Turner on the streets of London a few weeks back after a Chelsea match (he's a diehard fan).1 So while I liked the idea of Taylor-Johnson, I'm in favor of this, if it happens.
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1 Awkward since Dua Lipa is an Arsenal supporter... ↩
2026-01-06 19:51:00
Undoubtedly knowing my longstanding love of all things Microsoft branding, several people pinged me about the notion that the company was seemingly rebranding 'Office' to 'Microsoft 365 Copilot app'. Yes, seriously, the main landing page on office.com says exactly this right up top:
I love everything about this page, from the peachy tones and 2020-style ombré to the simple asterisk footnote denoter.1 Mainly I love that it's confusing as fuck. It's perhaps the most Microsoftian branding exercise yet! Because Microsoft is not actually rebranding Office to 'Microsoft 365 Copilot app' – at least not the Office you're thinking about. As Tom Warren explains:
As much as Microsoft loves to shove its Copilot branding everywhere, Office hasn’t been renamed to “Microsoft 365 Copilot app.”
The confusion comes from Microsoft’s own Office.com domain, which for the past year has acted as a way to push businesses and consumers to use the Microsoft 365 Copilot app. This app is a hub app that provides access to Copilot, as well as all the Office apps. Microsoft used to call this app simply Office, before the company rebranded Office to Microsoft 365 in 2022.
First and foremost, 'Office' is a great brand and name for a product suite. I'm not being flippant – it's up there with 'Windows' for perhaps the only good bit of branding that Microsoft has ever done.2 Equally impressive is the office.com domain – a killer domain that's super simple to remember, assuming you're using it to direct people to said Office suite of products online...
But no, apparently you're not. Because you decided that everything which AI touches within Microsoft needs to be rebranded as "Copilot", even, and perhaps especially when it makes no sense. Juice that usage, baby. And so the great office.com domain became the hub for the Microsoft 365 Copilot app,3 which itself is a hub for both Copilot (which you're undoubtedly not looking for) and the Office suite of apps (which you're undoubtedly looking for).
That mention of “formerly Office” is Microsoft referring to the very old Office app that launched in 2019 as a way to try and convince people to use online versions of Word, Excel, and PowerPoint. Until a year ago it used to be called the Microsoft 365 app. Microsoft then announced it was rebranding its Microsoft 365 app in November 2024 to a Copilot one, which I and everyone else were very confused at. The new app icon and name — Microsoft 365 Copilot — then rolled out on January 15th last year to Windows, iOS, and Android users.
So yes, that beyond confusing statement is just meant to say that the online version of Office, which used to be called 'Office' but stopped being called 'Office' in the push to use the '365' branding ahead of the push to use the 'Copilot' branding, now uses both '365' and 'Copilot' in its branding – also 'app' lol – which actually happened about a year ago, but no one knows why.4 You could do a whole George Washington SNL skit about such decisions.
All of this still resides on office.com, mind you. Perhaps microsoft365copilotapp.com was taken.5 There's always .net though.
1 That footnote, by the way, reads: "Copilot Chat in the Microsoft 365 Copilot app is available for Microsoft 365 Enterprise, Academic, SMB, Personal and Family subscribers with a work, education, or personal account. It is available in these supported languages: https://support.microsoft.com/en-us/office/supported-languages." Nearly absolute repetitive gibberish. ↩
2 Though shout-out to the OG heavy metal logo that rocked, hard. ↩
3 Special shout-out to the Microsoft 365 Copilot app logo, which looks like a motorway sign: "M365". ↩
4 Odds that Microsoft pivots from the 'Copilot' branding, at least for consumers, in 2026? Pretty high, I think. ↩
5 We see you, Satya. ↩
2026-01-06 06:38:19
...and we're back. Happy 2026 everyone. And Happy Endless-Barrage-of-CES-Posts in all of your feeds, if you celebrate. Which I do not.
Last week, I sent out some predictions for 2026, and a few days before that, looked back on the 2025 predictions. Below, some other things I wrote over the break.
The Spyglass Signal is a newsletter featuring links and commentary from M.G. Siegler on timely topics found around the web.
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📝 Satya Nadella Blogs – To me, the content is less interesting – AI is gonna be big in 2026, you heard it here first! Though I do appreciate the "scaffolding vs. substitute" & "slop vs. sophistication" framing. And, of course, referencing the "bicycles for the mind" without mentioning you-know-who... – than the meta aspect of Nadella deciding to blog. Presumably, this is an attempt to establish some sort of "thought leadership" position as Microsoft navigates the extremely competitive AI waters. He perhaps even learned a thing or two from his friend Sam Altman, who oscillates between his own personal blog and OpenAI's official blog – or even other ones – seemingly on a whim. To that end, Nadella's post isn't a blog on an official Microsoft site or even Microsoft-owned LinkedIn, where many such thought leader-y posts are born, but instead on "snscratchpad.com" – there wasn't a better URL available?! That perhaps led it to fly under the radar, with Techmeme just posting it now, even though Nadella posted this a week ago. Maybe this was a new year's resolution to write more, which I can certainly appreciate! We'll see how long he keeps it up... [SN Scratchpad]
📱 OpenAI Latest App Store Attempt – Rolfe Winkler tried to use some of the initial apps in ChatGPT’s latest attempt to re-create the magic of the App Store. The result? Predictably not great. OpenAI says it’s early, which it is, but the real issue is how much easier/better it is to use the partners' services via their actual apps and/or websites. The App Store worked because it took advantage of a new device and form factor in the form of the iPhone. OpenAI’s hope here is to leverage the fact that people already have ChatGPT open, but these other apps really are just a click away, be it in another tab or another app. Which is to say, maybe this strategy works when OpenAI has their own device (if that device is compelling enough), but then again, Amazon has been trying that for years too without much success… I can see some business use cases here, but consumer use cases are going to remain a challenge unless OpenAI can figure out something truly novel (perhaps by using ChatGPT’s knowledge about you?)… [WSJ 🔒]
📽️ Hollywood Had A Slightly Better 2025 – $8.9B in ticket sales (in the US and Canada) was 2% better than 2024 — but such numbers are still down over 20% versus the pre-pandemic levels. And that’s before you take inflation into account. This naturally brings up the "is this the new normal?" question, which it probably is unless Hollywood actually does something to change the equation here. Netflix could help, but the industry will do everything in their power to stop that from happening so… Still, one of my predictions for the year is that the 2026 box office will be up pretty significantly, sequentially. And it may even touch those pre-pandemic numbers (again, before inflation). The slate looks that strong with franchises galore (not that those helped much this year). But it will likely be a mirage. Real change — reel change? — remains needed. [NYT]
🥽 Apple Cuts Vision Pro Production & Marketing – Many in Apple's orbit seem to be quick to call this latest report a "nothingburger" – mainly in that it's nothing new (IDC's market report notes that Luxshare halted production last year), but I would just note that the company did ship an updated version of the device since then (also IDC's sales estimates do keep falling below even their muted expectations). Sure, it was a small spec upgrade, but many Apple updates are and they still manage to move needles year to year – that does not seem to be the case with Vision Pro. IDC believes they shipped just 45k units in the holiday quarter; Apple sells something like 600k iPhones and about 60k Macs a day. Still, I think that small update was probably the right strategy with the product already in market (they should have launched it as a dev kit, not a full-on consumer product in its current state, but we're way past that now...). Rather than seeing them try to do a lighter/slightly cheaper Vision Pro right now, I'd rather see them meet Meta in the market for Smart Glasses (which is clearly happening). And build up from there. There's just still no real market for headsets yet – Meta dominates it, but even they're seemingly pulling back. [FT 🔒]
📺 Versant Lives! – And more importantly, the now-spun-off new public company sets a potential price for WBD's television assets, which could ultimately make or break the Netflix deal. Right now, Comcast's old TV assets look to be valued by the market somewhere around $6B. At 4.5x forward-earnings, that would make WBD's assets worth... a lot. But it's not that straightforward because those assets are also going to be saddled with... a lot of debt. So at least right now, we're... likely somewhere between what Paramount thinks they are worth and what WBD (and Netflix) thinks they are worth... Funny that. (Don't be shocked if Paramount raises their offer.) [THR]
"Labubu doesn’t actually have that much of a story behind it, it’s just a strange-looking doll."
— Chris Pereira, founder of consultancy iMpact, noting that Pop Mart, the Beijing-based company behind the phenomenon, needs to focus on evolving the brand, lest we hit "Peak Labubu" (which we may have already). Currently, the company is focused on expanding their retail footprint around the world. And yes, the movie is coming, directed by Paddington helmer Paul King, for Sony…
Everyone has long joked about how CBS was the "old person's network", but it really is wild seeing these two charts side-by-side. The most popular channels watched by "younger" audiences are almost exactly the opposite of the most popular channels overall. I mean, CBS even lost to a cable channel in ESPN amongst those 18-49!
Overall, TV as we knew it sure seems screwed – hence, spinning out Versant, the WBD channels, etc. How long will even YouTube TV really want to be in that business? It's increasingly a headache dealing with the channels over carriage fees. And that means constantly having to jack up rates and piss off customers. Just like the cable companies of old! As soon as most live sporting events are shown elsewhere...
The Spyglass Signal is a newsletter featuring links and commentary from M.G. Siegler on timely topics found around the web.
2026-01-03 23:39:42
Clever girl:
Clicks Power takes the keyboard available in iPhone cases and cases for the Pixel 10 series, Galaxy S25, and Motorola Razr devices and detaches it from the device. Embracing Qi2 and MagSafe, the accessory can be attached to the back of your device and extends outwards to reveal the keyboard when it’s time to use it.
This new take on Clicks means that you’ll be able to use a physical keyboard through virtually any device. While it’s designed to work with Qi2 and MagSafe, a magnetic case or even an adhesive magnet ring will suffice. The keyboard connects over Bluetooth instead of requiring USB-C/Lightning, meaning it can also be used wirelessly with your phone, or other devices like a tablet, TV, or virtually anything else.
Back in 2024, I bought the first product from Clicks, their iPhone case which included a physical keyboard. It was part fun, part ridiculous, but not very practical. Especially if you happened to have an iPhone Pro Max, which made the device so comically long. I likened it to the real life "Bananaphone", but Raffi's fictional phone would have been arguably more ergonomic. The iPhone + Clicks keyboard was just so incredibly top-heavy. And when you put it in your pocket, well, the jokes write themselves...
Anyway, my main thought/feedback at the time was this:
Honestly, I wish Clicks had made a horizontal keyboard. That sounds potentially even more crazy but whenever I'm using this thing, I can't help but feel that an elongated keyboard would both feel better to use in your hands (the vertical keyboard is too narrow for comfortable two-hand use) and would further highlight the freed-up screen real estate. Right now, using the iPhone in landscape mode is a bit silly for everything beyond watching video or playing games. The digital keyboard when used in that position takes up too much screen real estate. A landscape Clicks could and would solve this!
You can use it horizontally to type now, but it requires even further breaking of your brain to type that way. And it's just even more awkward to hold that way. But a horizontal keyboard at the bottom of the device... I think there's something there. But they also must have thought about this and concluded it wouldn't work well for some reason or reasons.
Well, those crazy sonofabitches did it. It's not exactly the case I imagined, it's far smarter than that. By using MagSafe, it can latch on to the back with a keyboard that extends down when you're holding it either vertically or horizontally!
The fact that it's a battery pack too giving you an additional 2,150 mAh of capacity – the original Clicks case didn't give you this bonus despite its size – is just icing on the cake. I'm sure the whole package will be a bit unwieldy to carry around on your phone regularly, but as a battery pack – something I almost always have on me anyway – this seems like a great little package in your bag.1 It's also $109 versus the $159 cost of the original – or $79 if you pre-order ahead of its Spring 2026 ship date, which made it a no-brainer buy to me to try out, if nothing else. I'll report back.2
One more thing:
Joe Rossignol
Um, the Clicks team is cooking. At the same time they unveiled the new battery/keyboard accessory, they also unveiled their really big idea/product:
The company behind the BlackBerry-like Clicks Keyboard accessory for the iPhone today unveiled a new Android 16 smartphone called the Clicks Communicator.
The purpose-built device is designed to be used as a second phone alongside your iPhone, with the intended focus being communication over content consumption. It runs a custom Android launcher that offers a curated selection of messaging apps like Telegram, WhatsApp, Slack, and Gmail directly on the home screen.
There have been a number of players who have tried to create a "second device" – something you carry alongside your smartphone. In a way, even the device(s) that OpenAI is working on with Jony Ive is one of these. It's a category that's an acknowledgement that nothing is going to be able to fully replace the smartphone anytime soon, so better to pitch it as a complement. None of these have worked to date, but that doesn't mean they will never work, it just means it's a hard sell, literally, because smartphones are already expensive and can technically do everything these complementary devices do – and a lot more, of course.
Of course, that's part of the pitch too. The growing desire – at least stated desire – to breakaway from your smartphone with a purpose-built device that still allows you to do useful things. In this case, email and messaging. Again, it's not a bad pitch, it just never seems to work at scale because again, there's a literal cost associated (and maybe the revealed preference is for one device after all).
There are several clever features here like the side button that glows different colors depending on where/who a message is from – something I've long wished Apple could better surface without looking at a notification (they have okay ways to do this with haptics, but this seems smarter/better). And the fact that the whole physical keyboard is touch-enabled (on the top of the keys), so it is effectively a trackpad. Again, clever.
Anyway, I'm intrigued by the Clicks Communicator but I'm going to hold off on pre-ordering this one – though there is a deal too, a $199 deposit knocks the total price down to $399 (from the regular $499 price). This will obviously come down to how well both the hardware and software is done. Nailing one of them is hard, nailing both seems almost impossible for all but the biggest/best smartphone makers – and some might say all but Apple! But I hope it's great, it could be a fun/useful throwback to the BlackBerry.3
1 I'm also slightly worried that the add-on covers the lower camera on the iPhone Pro, as you can see in their announcement video. Again, maybe not a huge deal if you just plan to use it to type/re-charge. But worth noting... ↩
2 This is not a paid placement, I swear! I'm ordering it just as anyone else can. I'm just excited for their new idea per my critique for their old product. ↩
3 Consider this another reminder to check out the great 2023 movie about RIM.
2026-01-02 23:38:01
One of the bigger stories of 2025 in the technology/entertainment overlapping category that I often traverse around these parts was undoubtedly the success of KPop Demon Hunters in movie theaters. For one weekend last August, it topped the box office. And this was big news because it had already been streaming on Netflix for two months beforehand. How much did it take in? About $18M. Again, for a movie you could technically watch for "free" at home (assuming you had Netflix, which you undoubtedly did). It was a key data point in showcasing both how the movie-going experience could evolve and how Netflix's own stance on movie theaters could as well...
Netflix, of course, is now singing a very different tune when it comes to such distribution. That's obviously because they're in the midst of buying a movie studio – or trying to, if Paramount and/or the government doesn't get in the way of their deal. And a big part of that pitch is keeping the Warner Bros theatrical distribution window open for business. Hollywood, naturally, is skeptical – you would be too if the co-CEO of Netflix was saying things like this mere months ago – but again, I think it can actually make sense for Netflix as the company evolves. And now we have another data point.
Here's Anthony D'Alessandro reporting for Deadline:
Sources are telling us this morning that the Stranger Things finale cleared well north of $25M, possibly even $30M, in concession cash to movie theaters over its New Year’s Eve and New Years Day play. Of that figure, $15M was generated by the No. 1 circuit, AMC Theaters off an attendance of 753,000. By comparison, 20th Century Studios’ Avatar: Fire and Ash, the No. 1 grossing film of the season, made a combined $23.7M over New Year’s Eve and New Year’s Day.
Yes, another bit of content that you could technically watch for free from the comfort of your home just made another killing at the box office. Perhaps even slaying the mighty Na'vi of Avatar in terms of sales. Even more incredibly, that's from only around 600 locations – Avatar 3 is playing in closer to 4,000.
Granted, this is all quite convoluted to calculate because of the hoops theaters had to jump through in order to make such sales work:
Exhibition couldn’t charge for tickets to the Netflix event given the cast’s contractual terms for residuals, hence the streamer and circuits got around this by reserving seats with concession vouchers. At AMC theaters, such concession vouchers cost $20 per seat. At 231 locations, AMC had a bit more than a third of the total theater count showing Stranger Things. AMC estimates that more than half of all Stranger Things fans watched the finale in a movie theater do so at an AMC venue.
Still, it's a close-enough proxy for ticket sales to know that Stranger Things absolutely killed it in theaters – so much so that AMC had to keep adding screenings to keep up with demand. Oh yes, and this wasn't even technically a movie (though at two hours and eight minutes, it's longer than some of them!), but a television show. Whatever that means, these days.
Regardless of how you want to caveat them, these numbers are wild. And it shouldn't be too surprising. I've been arguing for years that the streaming services (and movie theaters) were just leaving money on the table by not leveraging theatrical distribution for all kinds of content, not just your typical Hollywood movie fare. As I wrote back in 2019, arguing that HBO should have debuted the final season of Game of Thrones in movie theaters:
Imagine if they ran the first episode in theaters only for the first week. Or even just opened it on a Thursday for the weekend before the Sunday premiere on HBO itself. I know I would absolutely go to see it on the big screen. As would many, many others, undoubtedly. Given the near feature-length of the episodes, I would even be fine paying full price for a movie ticket. But even if HBO “only” charged $5-$10 a ticket, how much money would they make? Tens of millions of dollars for sure. Hundreds of millions? Perhaps!
Just imagine if HBO had opted to open each of the six episodes of this season in this regard. We’re definitely talking hundreds of millions of dollars at that point. Then the question becomes: are we talking billions? Maybe not. Still, that is a lot of money for HBO to leave on the table, all for not doing much beyond some additional marketing and logistics.
The complications of selling such tickets (per above) aside, that's basically exactly what Netflix just did with Stranger Things. And it clearly worked to the tune of those tens of millions of dollars. And Thrones may very well have garnered even more support at such theaters – especially if they audience didn't yet know what a belly-flop that final season would prove to be! (I might also just note that Netflix is on the verge of potentially owning the rights to Game of Thrones along with HBO...)
Obviously, some have dabbled with such experiments in the past, but this should be an at-scale operation to take advantage of pent-up demand for certain content and the wide reach/footprint of movie theaters – many of which are partially or even mostly empty when they stick to their first-run-movie-only stances. It's silly.
For some reason we're sticking with the model from a century ago even though all the data points don't just suggest, but scream how the world has changed. That's not calling for an end of movies, it's calling for an evolution of their distribution. This too has already happened thanks largely to yes, Netflix. To put it as plainly as possible: some movies should go to theaters, but others should go to streaming.
And on the flip side, some shows should clearly go to theaters! At least for special events like premieres or finales. But depending on the show, perhaps at a regular cadence too! Who cares if they're an hour? That could actually help fill scheduling gaps at theaters...
Also, some movies that are hits on streaming should then shift to theaters for "special events" a la KPop Demon Hunters. And some hit streaming movies should get sequels that go to theaters (sort of the inverse of the sequel direct-to-video play back in the day). Some hit shows should get movie sequels (which Netflix is doing right now with Peaky Blinders). Some movies should get show sequels. Some should go to streaming, some to theaters. Some to both. Literally everything should be on the table.
Hollywood hates all of this because it's the end of the movies-must-play-in-movie-theaters religion. But again, that already died in so far as every movie made obviously – obviously – should not play in a movie theater. At least not in wide release! Blasphemy, I know. But the alternative is the death of the entire industry so...
At the same time, that doesn't mean theaters are only for blockbuster, mega-budget movies. That will undoubtedly remain the most popular type of theatrical content for obvious reasons, but breakout viral hits can be smaller too. Like KPop!
I feel as if I'm repeating myself. Because I am. But I also feel the need to keep repeating this until it's the inevitable reality. Movie studios keep releasing movies that are clearly going to bomb at the box office when they should be sending these to streaming.1 Unsurprisingly, the newer tech players were quicker to wake up to this reality, but also shot themselves in the foot perhaps because they didn't realize that Hollywood wouldn't see it their way – the logical way, yes, but also the way that goes against the past century of success for Hollywood.
And it's not like the tech players are perfect either! Netflix is sending movies right to streaming when they clearly should be playing in theaters first – like their Knives Out hit franchise, for example. And Frankenstein, which they relented on, but probably not enough!
Netflix's previous anti-theatrical stance cost them business too in the form of both movies going elsewhere to ensure a wide theatrical component of their work, but also the talent too. For example, the very creators of Stranger Things, The Duffer Brothers, bailing on Netflix for Paramount (before the whole battle for Warner Bros), supposedly in large part because of the theatrical stance! Which undoubtedly contributed to Netflix's thawing of that stance and thus, this Stranger Things big theatrical moment – which in turn is perhaps helping them make the case to buy Warner Bros!
One more thing: I particularly enjoyed the opening of the The Hollywood Reporter piece about the Stranger Things box office numbers:
Stranger things have happened before when it comes to Netflix and its often strained relationship with theater owners, but no one could have predicted the two sides would ring out 2025 as the best of frenemies.
Really? No one?...
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 And sometimes simply opening a movie wide for a week – obviously almost always the biggest draw anyway – and the pushing it right to streaming could work well too! ↩
