Is there a better metaphor for the messy state of the “movie” business than this week’s announcement that executives from the biggest movie distributor, Disney, won’t be attending the biggest gathering of movie exhibitors, CinemaCon?
Apparently, COVID-19 is flying Delta (the variant) to Vegas in droves. The White House designated southern Nevada a “sustained hotspot,” and the Mouse House designated a late-August Las Vegas visit “not strictly necessary.”
All the other studios are still committed to go, as CinemaCon tries again to hold its 10th gathering after last year’s cancellation of both the event and most of the exhibition industry.
But that’s absolutely subject to change, as Los Angeles County, the biggest movie market, joins St. Louis, near the worst Covid-19 outbreak, in reimposing indoor masking on everyone. Among other impacts, that makes for some fun movie-going.
Meanwhile, media companies continue to wrestle with the best way to maximize returns on their honking big pile of $200 million cinematic works of art/high-risk investment properties, hoping to get the darned things seen and paid for sooner than later.
But with a resurgent virus, stumbling exhibition business, and renewed customer anxiety, we’re entering what I call The Goldman Zone.
That’s screenwriter William Goldman, who famously wrote, “Nobody knows anything … Not one person in the entire motion picture field knows for a certainty what's going to work. Every time out it's a guess and, if you're lucky, an educated one.”
And that was before a lethal global pandemic and streaming video.
We’re seeing Goldman-esque uncertainty play out with Disney’s release strategy, but also with most of Hollywood’s other media companies. All are experimenting with day-and-date releases, shortened exclusive windows, premium video on demand, and viewership building on their shiny new streaming services, while trying to squeeze every nickel out of those feature-length projects.
Of course, Disney is the one distributor that could afford to blow off CinemaCon, the official business gathering/drunken revel of the National Association of Theater Owners (NATO). Everyone wants Disney’s movies, and everyone knows what’s in the pipeline. No need to belabor the obvious in person, unless you like wading through refrigerated cigarette smoke, casino lifers, and another brutal Vegas pandemic summer.
But then again, everyone thought Disney had figured out the optimal mix of theatrical, PVOD and streaming-first after a spring stuffed with Disney Plus Emmy candidates followed by week 1 of Black Widow.
Widow worldwide theatrical gross was great, but so was the movie’s simultaneous home release on Disney’s Premier Access. Disney even issued an unusual news release bragging about “more than $60 million” in PVOD revenues.
But a braggart’s pride goeth before a fall, my humble grandmother might have said, and fall Disney did in Week 2.
Box office plunged, with no mention of further PVOD riches, presumably because there weren’t any. NATO promptly issued a told-you-so release that might more accurately have been titled “Nyah, Nyah, Nyah.”
It also set off a flurry of Goldman Zone questions. Did PVOD cannibalize theatrical? Was Black Widow a bad movie, at least by the standards of Marvel otaku, if not actual humans? Or worse, now that people have streamed approximately 100 bajillion hours of Marvel movies on Disney Plus, are they Just Over It?
Or, maybe, that first weekend attracted only the most hard-core fans, online and in theaters. Maybe everyone else wasn’t that jazzed to pay more or risk more to see a standalone Marvel movie of only middling (and mostly valedictory) importance to the canon. They’ll just wait a few months and watch it free, probably after an episode of The Mandalorian.
It’s worth recalling Disney’s response in 2018 when Solo: A Star Wars Story bombed at the box office (the $275 million film grossed “only” $393 million). Even light-saber-addled core fans appeared to be tiring of the rapid-fire cadence of Star Wars film releases in that long-ago era. Panicked company execs slowed down theatrical release plans, and likely pushed some gestating projects into what became Disney Plus. Will we see another shift in Disney release strategies after the Widow walk?
Now, as the Goldman Zone envelopes the streaming era, the big questions have only multiplied, for Disney and everyone else.
What films should be streaming only? Which should be theatrical only, especially as storm clouds gather again over theatrical? What films should get a PVOD or other simultaneous release?
Disney will do the dual release again next weekend, for park-ride adaptation Jungle Cruise. But it’s going theaterical-only for Labor Day Marvel entry, Shang Chi and the Legend of the Ten Rings, and Ryan Reynolds action comedy Free Guy. No, I don’t understand the dividing line either.
NBCUniversal, meanwhile, used its Olympics house ads to promote the DreamWorks Animation feature The Boss Baby: Family Business, which is a Peacock exclusive.
Other streamers’ Olympics spots revealed their priorities too: Hulu flung fans across the landscape in an otherwise anonymous pitch for its “originals.” Netflix averted an alien invasion with heart-warming moments from hits such as Bridgerton and The Queen’s Gambit.
Most interesting was the surprising ad from NATO, proclaiming “the big screen is back.”
“Well, we’ll see,” my humble grandmother might say in the face of baldly confident assertions built on dubious facts.
Disney execs reportedly want to move their release strategy back to the Before Times as soon as possible, phasing out PVOD. Understandable after the record year Disney had in 2019, with worldwide gross of $11.1 billion, and six films cresting $1 billion each in gross.
But 2019 isn’t happening again anytime soon, at least on this time line in the MCU. At mid-year, PwC estimated the exhibition business won’t fully recover until at least 2024. Even that feels wildly optimistic amid the latest Delta-fueled resurgence.
WarnerMedia plans to phase out simultaneous releases in theaters and on HBO Max after this year. But that company also just announced it will make at least 10 movies specifically for HBO Max. Interestingly, that includes potential Oscar contenders, which at will least get a limited theatrical run too.
“The motion picture format absolutely matters and it matters in a number of ways,” WarnerMedia CEO Jason Kilar said in this week’s earnings call. “It matters in theaters ... They also matter at home and, absolutely, in terms of the response that we’ve gotten… from all of our (day-and-date) titles. We feel very good about the response that consumers have given it in the home.”
Netflix agrees, promising even more movies in the second half of the year as its production pipeline returns to normal. Last quarter, Zack Snyder’s Army of the Dead grabbed a whopping 75 million Netflix households, spurring both a prequel and a spin-off, as well as a traveling virtual-reality experience launching this week in four cities.
Hedgeye Communications released intriguing exit survey data this week suggesting why Netflix cares so much about original features. The second-most common reason given for subscription cancellation, “There aren’t enough good movies.” Price is still No. 1, but that looks like good motivation to go long, and evolve for a different world. =
Kilar agrees.
“In terms of where things go in the future, I think it’s fair to say that … I certainly don’t anticipate us going back to the way the world was in 2015 or 2016 or 2017, where windows were quite lengthy between theatrical and home exhibition whether it was an a la carte transaction or something else,” Kilar said.
Like everyone else in Hollywood, I don’t know much of anything either here in the Goldman Zone. But I’m thinking Kilar’s dead right on this one.
