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number8 (view post)
The latter. Netflix makes movies for their streaming service. They're not opposed to having theatrical distribution, but US movie theaters refuse to show Netflix films because they don't think there's a point taking up screen space for movies that are already up on Netflix.
However, Academy rules is that movies need to have one week of theatrical release in NY and LA in order to qualify for the Oscars, so streaming services do always try to get a short theatrical release in some independent theaters for some of their more high-profile films. The IFC Center here has shown Netflix and Hulu original documentaries for a few days the same week they're put up online.