Picture Credit: Netflix
For years, the great Hollywood debate has raged on: do movies released in theaters ultimately perform better on streaming platforms than direct-to-streaming originals? With Netflix seemingly closer than ever to releasing its movies in theaters (two at the time of publishing), we’ve got fresh data from Netflix and Chiffres, which uses Nielsen data, to hopefully settle the debate.
Traditionalists and box-office purists have long argued that a theatrical window gives a movie a “premium” feel, serving as a massive marketing campaign that pays dividends once the film hits Netflix, Max, or Disney+. But does the actual viewership data back that up?
Updating his initial 2024 deep-dive with 18 more months of Nielsen data (stretching from January 2021 to March 2026), occasional What’s on Netflix contributor Frederic Durand has analyzed over 600 films to see which release strategy really drives the most eyeballs.
The TL;DR – Despite what you may have been led to believe, direct-to-streaming originals still outperform theatrically released movies on streaming.
Here’s a breakdown of the fascinating findings from the 2026 Netflix & Chiffres report, and what it all means for Netflix’s ongoing movie strategy.
The Methodology: Apples to Apples
Before we get into the winners and losers, it’s worth noting how Frederic crunched the numbers. He used Nielsen’s weekly Top 10 data (US TV viewing only) and translated the “minutes viewed” into Complete Viewing Equivalents (CVEs) by dividing the total minutes by the film’s runtime. This is a metric we use all the time here at What’s on Netflix because it levels the playing field between a 90-minute comedy and a 3-hour epic.
He then looked at the first 14 days of a film’s availability on streaming to capture the most crucial launch window.
Note: Nielsen’s data has a slight quirk. It can’t separate SVOD viewing from paid VOD viewing on the same platform, meaning theatrical films get an estimated 5% to 15% artificial bump in these numbers. Keep that in mind when you see how well streaming originals still performed!
Direct-to-Streaming Still Dominates the Top 100
If a theatrical run was truly a prerequisite for streaming dominance, you’d expect the Top 100 most-watched films of the last five years to be dominated by multiplex hits. But that’s simply not the case.
According to the updated 2026 data, the threshold to even break into the Top 100 is now a staggering 15 million CVEs in the first 14 days. Out of that elite Top 100, only 34% are theatrical films. The remaining 66% are direct-to-streaming originals.
In fact, the number one spot on the overall chart recently shifted. Pixar’s direct-to-Disney+ hit Luca held the crown for years, but as of summer 2025, Netflix’s Happy Gilmore 2 is officially the most-watched film in its first 14 days on streaming.
When comparing the very top of the charts, the most-watched direct-to-streaming films hold a 19% lead over the most-watched theatrical films. As you move down the Top 100, that gap widens to 25%. While the gap has narrowed slightly since 2024 (when streaming originals led by upwards of 30-37%), the trend is clear: exclusivity drives massive initial audiences.
Would Zootopia 2 or Moana 2 have scored even higher if they skipped theaters and dropped directly on Disney+? We’ll never really know, but Frederic’s data suggests yes.
Live-Action vs. Animation: A Tale of Two Genres
When you break the data down by genre, things get incredibly interesting.
Live-Action: Netflix’s Bread and Butter
In the live-action space, direct-to-streaming films utterly obliterate theatrical releases. Streaming originals achieve audiences 37% to 41% higher than live-action films that played in theaters first.
Even if you strip away bigger sequels (like Happy Gilmore 2 or Glass Onion), direct-to-streaming originals still comfortably win the averages. Netflix has essentially built its empire on this metric, proving that algorithms, front-page promotion, and sheer subscriber volume (aided by new exclusive movie releases) can conjure larger audiences than a traditional theatrical marketing campaign.
Animation: The Disney Effect
Animation tells a slightly different story, but it comes with a major asterisk. Since 2023, theatrical animated releases have outperformed direct-to-streaming animated films on average.
Why? Disney completely abandoned their direct-to-streaming animation strategy (the Bob Chapek era that gave us Soul, Luca, and Turning Red) and went back to theatrical-first. By cutting off the supply of premium direct-to-streaming animated films, theatrical releases naturally took the lead. However, the data notes that none of Disney’s recent theatrical-first animated hits have managed to match the streaming numbers of Luca, Turning Red, or Encanto on Disney+.
Does a Theatrical Movie “Hold” Better Over Time?
One argument for theatrical films is that they have better “legs”—meaning they hold audience interest longer than the flash-in-the-pan weekend drops of streaming originals.
Frederic looked at the viewership evolution between Days 14 and 28 to test this. The result?
- Theatrical Live-Action films saw their audience grow by a factor of 1.35x.
- Streaming Live-Action films grew by a factor of 1.28x.
So yes, theatrical live-action films have a very slight 5% edge in long-term retention. But it’s not nearly enough to overcome the massive 30%+ head start streaming originals get in their first two weeks.
When it comes to animation, however, the hold is identical regardless of how the movie was released, but that shouldn’t be all that surprising, given that kids are known for repeat viewing. The top 10 films with the best long-term holds were all children’s movies (kids love to hit replay) or Christmas movies (which get a delayed boost as the holiday approaches). Buzz outweighs the release model. Just look at the viral success of KPop Demon Hunters or the enduring dominance of Encanto.
What This Means for Netflix
Every time Netflix releases a major hit like Glass Onion or Happy Gilmore 2, the internet asks: “Why didn’t they put this in theaters for a month? They’re leaving money on the table!”
But perhaps Netflix knows what it’s doing….
Frederic spelled out the financials in that earlier 2024 report, and they hold mostly true today: Netflix’s North American revenue (now estimated to be 44% of its total revenue and roughly $19.96B, up from the $16B in the original report) completely dwarfs the now estimated $3.75 to $4.5 billion that traditional distributors share (based on a 50% to 55% share and the total box office being $7.5 to $9B) North American box office.
Spending tens of millions to market a Netflix film in theaters for a wildly unpredictable box office return—while simultaneously cannibalizing 30% of its streaming viewership—just doesn’t make financial sense for the streamer, and that maybe explains best why Netflix appears, on the surface, to be leaning in on theaters, but as we’ve discussed before, it’s hardly going all-in. Instead, it’s being strategic with stunts and treating it as a marketing exercise, with the added benefit of good PR, and perhaps opening doors that weren’t otherwise open with talent and the like.
Second, this data proves that box office success is not a prerequisite for streaming success. Some of the biggest theatrical hits completely fizzle out on streaming because the audience that wanted to see them already bought a ticket. Conversely, theatrical “flops” like Red One or Encanto can become massive streaming behemoths.
A huge thank you to Frederic D. at Netflix & Chiffres for this data. If you love deep-dive streaming analytics, we highly recommend checking out his work and subscribing to his newsletter!
What do you think about the theatrical vs. streaming debate? Let us know in the comments down below!
