Why Netflix’s IRL Flexes Are All About Streaming

The one-time slayer of Blockbuster now has a bona fide blockbuster theatrical hit.

Netflix scored its first No. 1 box office win with animated sing-along “KPop Demon Hunters.” And the company is about to open two big entertainment and shopping venues in the U.S., with more on the way. But Netflix isn’t pivoting to theatrical movies or theme parks: The IRL extensions are fully designed to support its massive streaming biz.

“KPop” pulled in an estimated $18 million-$20 million at the box office over the weekend of Aug. 22-24. That’s nothing to sneeze at, but some incremental cash was not Netflix’s primary goal when releasing the sudden streaming sensation into theaters. The simple truth still holds: Netflix doesn’t really want you to go to the movies — Netflix wants you to watch Netflix.

Netflix has “these bespoke releases” for films, often for Oscar-qualifying runs, co-CEO Ted Sarandos said this spring at the Time100 Summit. While he’s a fan of the theater “experience,” he doesn’t see a future for the business: Making films “for movie theaters, for the communal experience,” he said, is “an outmoded idea.”

Meanwhile, Netflix has had success over the past few years with live experiences including “The Queen’s Ball: A Bridgerton Experience” and Broadway’s “Stranger Things: The First Shadow.” It also has a line of merch based on its TV and film franchises, and is rushing out a set of Funko Pop! figurines based on the “KPop Demon Hunters” characters to capitalize on the movie’s buzz. But the point is to super-serve fans and, ultimately, ensure they stay subscribed to the streamer every month.

The company’s first two Netflix House destinations will open their doors in Philadelphia and Dallas in November and December, respectively. A third location is set to go live in 2027 in Las Vegas, where Netflix has a themed dining experience, Netflix Bites, at MGM Grand.

These 100,000-square-foot Netflix Houses are being built to draw fans who can go get regular hits of “Squid Game,” “Wednesday,” “One Piece,” “Stranger Things” — and now, naturally, “KPop Demon Hunters” — in the form of activations, merch, restaurants and screenings centered on the Netflix-owned IP. New immersive experiences created for the first two Netflix House locations include “Stranger Things: Escape the Dark” in Dallas and “Wednesday: Eve of the Outcasts” and “One Piece: Quest for the Devil Fruit” at King of Prussia Mall in Philadelphia. The Dallas location at Galleria Dallas will also house “Squid Game: Survive the Trials,” a permanent version of “Squid Game: The Experience,” which previously debuted in cities including New York and Seoul.

But Netflix, for now anyway, isn’t trying to build Disneylands. The streamer’s strategy in this sector is similar to Warner Bros.’ Harry Potter-themed studio-tour experiences and stores, which are “really profitable” in capitalizing on the existing, persisting Wizarding World fan, says Jessica Reif Ehrlich, senior media and entertainment analyst at Bank of America Securities.

“It seems like [Netflix is] leveraging their properties in a very smart way and just adding to it,” Ehrlich says. “And you can rotate the brands.”

That is the plan: Netflix has said that beyond the initial slate announced for Netflix House, it is developing future experiences and installations surrounding shows and movies including “Bridgerton,” “Love Is Blind,” “The Floor Is Lava,” “Big Mouth,” “Outer Banks,” “Money Heist,” the “Knives Out” franchise and “Army of the Dead.”

That strategy shows that Netflix wants visitors to focus on what’s currently streaming or just coming up and is ready to pivot to accommodate the latest trend and buzz: like announcing the last-minute addition of “KPop Demon Hunters” experiences to the soon-to-open Netflix House locations, even though it can’t yet say exactly what those will be. What’s important is fans know it’s going to be there, and they’re talking about it.

“I think it drives further affiliation with the brand or loyalty to a brand or to a story,” Ehrlich says. “It just expands everything that they have, and it is a good promotional outlet.”