Movie-theater insiders explain why Netflix's strategy for Oscar frontrunner 'Roma' proves it still has a lot to learn about the industry

But about a week later, the company did an unprecedented 180-degree turn.

Trade publications like Deadline and Variety reported that the streaming giant would for the first time do an exclusive theatrical release for three of its movies before their streaming dates: "The Ballad of Buster Scruggs," "Roma," and "Bird Box."

Why would a company that has thrived on being the disrupter of the industry suddenly toe the line? Simple: Oscars.

Though the news was about three titles, one was clearly the motivating force for all of this: "Roma," Alfonso Cuarón's critically acclaimed semiautobiographical family drama and a bona fide Oscar frontrunner for the streaming giant.

Netflix changed course to make its talent happy

Like most Oscar campaigns, the one for "Roma" kicked off at the Toronto International Film Festival in September.

Following the movie's premiere at the festival, Cuarón could be found holding court at the after-party by a small table of hors d'oeuvres. He gave strong handshakes and said he was appreciative of the kind words about his movie.

One person went up to the Oscar-winning director and told him that everyone needed to see his movie on the big screen. Cuarón looked the person directly in the eyes and said, "Keep talking about that!"

There was never doubt that Netflix would show the movie in theaters. But at that point, Netflix had never given any of its movies an exclusive theatrical run. So the main topic that evening — after people recovered from the emotional roller coaster the movie puts you through — was whether the industry would recognize a movie that didn't play by the normal theatrical rules.

Though Netflix had just come off an Oscar win at the beginning of the year, it was in the documentary category ("Icarus," about the Olympics doping scandal linked to Russia). Meanwhile, its rival Amazon, which releases its original movies with traditional theatrical runs before streaming them, took home the best actor and screenplay Oscars for "Manchester by the Sea." It was also nominated for best picture.

Netflix has never been nominated in a major Oscars category.

But it has had chances. Its first original movie, 2015's "Beasts of No Nation," was an odds-on favorite to score a best supporting actor nomination for Idris Elba. It didn't happen. And many were shocked that "Mudbound" wasn't nominated for best picture earlier this year.

These snubs were certainly a factor in why Netflix suddenly changed course and decided to give "Buster Scruggs," "Roma," and "Bird Box" exclusive theatrical runs. But never underestimate the power of the talent. Cuarón didn't make it a secret that he wanted his movie to have a life in theaters, and it seems he finally convinced Netflix that if it played by the rules, "Roma" might bring home an Oscar for best picture — something that would give the company huge bragging rights in the business.

While "Buster Scruggs" had a very quiet theatrical release in early November, "Roma" follows with a select run in theaters that started Thanksgiving eve. And Cuarón couldn't be happier.

"Seeing 'Roma' on the big screen is just as important as ensuring people all over the world have the chance to experience it in their homes," the director said in a statement. "'Roma' was photographed in expansive 65mm, complemented by a very complex Atmos sound mix. While a movie theatre offers the best possible experience for 'Roma,' it was designed to be equally meaningful when experienced in the intimacy of one's home."

But selling theaters on making room in their schedules to show "Roma" in all its glory was not an easy task for Netflix.

Trying to get movie theaters to change their ways

The movie-theater business has always been stuck in its old ways, and with other options (streaming, video games) gaining more popularity than ever before, movie houses fight for every dollar — and that includes the biggest chains in the world.

AMC, Regal, and Cinemark all operate with studios and distributors with the understanding that the titles they are showing are exclusively theirs for a time. The standard is 90 days before movies can be available on video on demand, streaming, or home video.

So when Netflix came on the scene touting a "day and date" model a few years ago, there was an immediate hard pass by the big three. That left Netflix working with the smaller chains.

Over the years, the company has been welcomed by the likes of Landmark, Alamo Drafthouse, and iPic Theaters, the latter of which for the first year or two was the only theater to play Netflix movies. Netflix has also booked its titles in smaller art houses with one location. But Netflix's ask of bookers to show "Roma" tested many of the relationships the streaming giant had built.

Numerous art houses, including Alamo Drafthouse, one of the most popular, told Business Insider they passed on showing "Roma" because of the streaming giant's demands, which in some cases included playing the movie in 70mm and in theaters with Dolby Atmos sound — elements most theaters outside of the big three chains don't have.

In the case of Alamo Drafthouse's location in Brooklyn, New York, one of the few in the city that can play movies at 70mm, Netflix wanted to run the movie for three to four weeks before its streaming date. But that would have meant that for up to four weeks, the movie would fill the theater's biggest auditorium.

With Netflix not budging, Alamo Drafthouse passed, a source close to the negotiations between the chain and Netflix told Business Insider. ("Roma" is playing at a Landmark theater in New York and the IFC Center, as well as a Landmark in Los Angeles. It's set to expand to other theaters in the following weeks.)

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And then there were some theaters that just couldn't place "Roma" or the two other Netflix titles because they were booked up with other movies.

The holiday season is one of the busiest times of the year for movie theaters. Because of this, the big studios lock down releases years in advance. The smaller indie distributors like Sony Pictures Classics and A24 announce their dates in some cases a year in advance. And now Netflix was suddenly going to theater bookers to run its titles within a month?

According to one source, independent distributors were also turning up the heat on theater owners, saying if they made accommodations for Netflix, which could cause other distributors' titles to get fewer screens, those companies may be less accommodating with their titles in the future.

Another hard ask Netflix was pushing on some theaters was a one- to three-week run with all three movies. For numerous theater owners Business Insider spoke to, that wasn't a precedent they were OK with. Generally, theaters want to play popular movies for months. With Netflix asking that its movies play for a few weeks and then disappear, theaters would be taking a major risk, since it would open the door for Netflix to dictate the terms of the release window moving forward.

"I won't be playing it," one theater owner in the Northeast told Business Insider when asked about showing "Roma." "They offered us 12 to 14 day-and-date, I can't live with that. My booker has a client or two that wish to play it, and he's been trying to convince them that it's very short-sighted."

Business Insider also spoke to numerous theater owners and programmers who were ecstatic that they were getting "Roma."

A source at one theater in the Midwest said it had been trying to get Netflix titles shown since it played "Beasts of No Nation." Netflix had passed until "Roma." The theater will show "Roma" in December, once the movie is already available to stream on Netflix, for one week.

iPic Theaters will show the movie at its locations in Dobbs Ferry, New York, and Fort Lee, New Jersey, for one week in December. Its CEO, Hamid Hashemi, said his company continued to have a great relationship with Netflix but acknowledged that scheduling "Roma" was a challenge.

Of the time of year Netflix decided for the exclusive theatrical run, Hashemi said, "It really gets tricky and much, much harder."

"I'm a little surprised that they did this, because they have been sticking to their guns that their philosophy is you should be able to see a movie whenever and however you want to," Hashemi said. "This is a departure, and it's pretty obvious that they are doing it because they are trying to appease the talent. They are going after the big names."

It's clear Netflix is not going through all of this because of the added revenue it can take in at the box office — it's for Oscar gold and keeping the big-name talent happy. And this is just the beginning.

Netflix has more big releases with huge talent on the horizon, like "The Irishman," directed by Martin Scorsese and starring Robert De Niro, Al Pacino, and Joe Pesci, set to come out sometime next year. Like Cuarón, Scorsese has always championed the theatrical experience. So expect the streaming giant to continue to tweak its approach to working with theaters to satisfy its talent.

It seems the theater business is open to this — if Netflix plays by the rules.

"The movie theater door is open to Netflix — to grow their revenues and improve their awards chances — if only they will give their best movies the time and attention they deserve, in cinemas," John Fithian, the CEO of the National Association of Theatre Owners, wrote in a column in November. "Filmmakers and movie lovers will appreciate Netflix so much more."

Netflix declined to comment for this story.