- The first Netflix Houses are scheduled to open in shopping malls in Texas and Pennsylvania in 2025.
- Netflix appears to be following Disney’s playbook by creating immersive, in-person experiences.
- Is Netflix World next?
Imitation is the sincerest form of flattery: just ask Netflix.
The company plans to open its first Netflix Houses in 2025 in two US shopping malls: King of Prussia and The Galleria Dallas.
“We’ve launched more than 50 experiences in 25 cities, and Netflix House represents the next generation of our distinctive service. These venues will bring the stories we love to life in new, ever-changing and unexpected ways,” said Marianne Lee, Netflix chief marketing officer.
If the concept of taking an original IP and turning it into an immersive, in-person experience sounds familiar, that’s because it is.
That’s the Disney way.
The Walt Disney Company started as a cartoon studio but expanded into theme parks with Disneyland in California in 1955. Since then, it has opened theme parks all over the world while also adding other experiences, including cruise lines, resorts, and residential real estate communities.
Theme parks are a big source of revenue for Disney, and the experiences division, which includes the theme parks, is expected to be Disney’s largest revenue source in 2023, bringing in $32 billion in revenue.
Meanwhile, Netflix made a total of about $32 billion in 2023.
So it’s not surprising that the company looks to Disney as a role model as it seeks ways to boost profits: At a 2019 conference, former Disney CEO Reed Hastings said that Netflix looked up to Disney.
However, media and retail analysts told Business Insider that while Netflix is copying Disney’s strategy, the end result may be different.
How Netflix can expand beyond streaming
Zeta Global CEO David A. Steinberg calls this phenomenon “clicks and bricks,” describing consumers’ desire to blend the online space with the real world.
He said consumer data collected by Zeta Global found that while “the majority of research into transactions is taking place on the internet, the majority of transactions still take place in the physical world.”
It’s a recipe Disney has perfected over the decades it’s operated theme parks and other experiences. One new addition to the collection is Disney World’s “Tiana’s Bayou Adventure,” a ride based on the 2009 film “The Princess and the Frog.”
While Netflix House will likely attract subscribers, Ericka McCoy, MCO at Resonate, said it also has the potential to attract new audiences, including younger generations who are craving real-world connections.
“For Netflix, this is going to be a really interesting experience and a great opportunity to attract not just Netflix viewers, but a significant portion of movie fans looking for something new,” she said. “They should be able to get their loyal concert audience.”
Netflix may save the day Shopping mall
Netflix’s investment in shopping malls may seem at odds with headlines heralding the “end of retail,” but Steinberg said there’s still room to make money in these properties.
“While shopping malls certainly have problems across large swaths of the country, they are a very low-cost way to attract large amounts of foot traffic,” Steinberg said.
He said Netflix would likely be able to attract more foot traffic in shopping malls than if it built standalone stores.
“While the numbers may be down compared to the past, these are two of the largest and most visited malls in the country,” Steinberg added, referring to King of Prussia and the Galleria Dallas.
McCoy told BI that the physical space offered in these malls is ideal for a “high-volume experience.”
“Think of Hollywood Studios,” McCoy says, referring to Walt Disney World theme parks, “and you have the opportunity to create a stage, to have that immersive feeling of being inside the set. You can’t do that in a small space; you have to build it from scratch.”
Meanwhile, Optimine Software CEO Matt Voda said securing a venue for Netflix House could be a win for mall operators looking to replace anchor tenants.
“Mall operators are desperate for consumers to come to their stores, so this is a way to avoid boutique products that can be more expensive,” Voda said.
Voda added that Netflix has an “analytical advantage” over smaller brands because its data can reveal fans’ interests and passions, which can guide business decisions.
“They know how many passionate fans there are in certain locations, so they can reduce a lot of the variables that are a big risk for retailers,” he said.
Netflix House and Netflix World?
Three experts told BI that Netflix House could usher in a more immersive era for the company, but it’s still too early to know Netflix’s official end goal.
“Is this just a branding strategy to drive engagement and awareness for Netflix, or is there a bigger economic opportunity in doing something like a theme park?” Voda said. “I think they need to test this out and see if it will last for years.”
Steinberg suggested expanding Netflix’s permanent locations by moving away from theme parks and creating more experiences.
“It could be rides, it could be virtual experiences,” he said. “Part of it could be opening themed restaurants.”
“Only time will tell,” Voda added.
