Sure Seems Like Cinema and Streaming Can Coexist

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Consumers don’t distinguish between content sent FTA or OTT — it’s all just television. So could the way we feel about cinema be headed this way too? The choice to watch fresh movie releases day and date in theaters or on screens at home is here to stay at least while COVID lasts and probably beyond.

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The numbers are starting to stack up.

The opening weekend results for Marvel Studios’ Black Widow is the latest test case. It recorded the largest domestic box office debut since the pandemic began and the largest domestic opening weekend since Star Wars Episode IX: The Rise of Skywalker in December 2019, amassing $80 million.

The film topped that with another $78 million in overseas markets and earned another $60 million from Disney+ subscribers paying $30 (£20 in the UK) via its Premiere Access program for a cumulative $215 million. Disney was so pleased with its hybrid cinema-SVOD strategy that in an unusual move it issued figures for the film’s streaming performance.

The take-away is that theatrical versus streaming is no zero-sum game. SVOD gain need not be proportionate to exhibition’s loss. Given the right product (for Black Widow a strong female lead, action franchise, decent reviews; see also A Quiet Place Part II) audiences favor the chance to select whether they want to watch it on IMAX or tablet.

Strong recent box office showings clearly demonstrates an appetite for returning to theaters. Covid fears undoubtedly played a part in some choosing to pay a similar amount direct to Disney at home. Audiences want the big budget immersion of something made for cinema whether they view it on the biggest screen or not. The studio wins both ways.

Exhibitors might argue that they miss out on vital concessions revenue from punters staying at home. On the other hand, that Black Widow was successfully “event-ized” as a must-see by being exhibited in theaters surely boosted the coffers of both cinema chain and Mouse House.

Also factor in the 100+ million accounts that Disney has amassed for Disney+ worldwide. If you’re already a subscriber it is easier to pay for a one-off. That almost frictionless purchase is not the case with less ubiquitous streaming platforms which may instead choose to offer new titles as part of the bundle in order to build their base.

For example, Warner Media/Discovery’s HBO and HBO Max share 44 million subs, in part boosted by offering Godzilla vs. Kong at no additional cost to subscribers on the day it released in theaters.

Disney has the mass to make Premium Access work. It’s not clear that other studios do.

Netflix also offers critical mass (north of 200 million households worldwide) but its revenue model is not dependent on theatrical. Certain prestige titles will be given the cachet of a cinema outing to boost Awards profile and salve the conscience of A list directors but exhibition is not a deal breaker and Netflix remains locked out of Cannes.

Movie release and production budget strategies have been ripped up by the pandemic. Talent agents are pondering how to give their clients points on a picture when the traditional means of judging a film’s performance in various windows has been smashed. Meanwhile platform owners are in the habit of releasing streaming figures only when they have a hit. That lack of transparency is causing havoc basis on which to value a movie going forward.

There does seem to be symbiosis between theaters and streaming that will see cinema bounce back, if not to pre-pandemic heights then close to it, but the old certainties such as they were are gone for good.