| March 6, 2022
Today, we are two-and-half months from the first death from COVID-19 in Wuhan. And things are beginning to start up again in Wuhan and across China.
The first death in America from this virus was on February 29, in Washington state. California: March 4. New York: March 14.
The arc will vary, but two-and-half months means May 15 – June 1 and, one hopes, the first sense of normalcy should return to these hot spots. Another month of finding our feet, and July 1 seems like a reasonable guess at when we can go to a restaurant and maybe see a movie in a theater.
Thing is, America is a big country. And most of the country is just getting their invitations to this horrible, horrible party. Easter is 18 days away and the rotten eggs won’t take that long to be found. Easter seems to be a likeley target date to expect the first deaths in much of the country and for the U.S. toll to blow past the 5,000 mark. (We will be lucky if it’s that low in 18 days… it could easily be double that if New York or L.A. or San Francisco hospitals are overwhelmed.)
That would put much of the country at a July 1 first break date and an August 1 start of relative normalcy.
In the meanwhile, anything that speeds up the process, from any part of the globe, is incredibly welcome. Anything the preening peacock Donald Trump does that helps… incredibly welcome. I am relatively safe and comfortable. But people are dying. People sick with other things will not get the attention they need. Women are giving birth alone in hospitals, scared to death that, no matter how careful, they or their child will be infected. Businesses are closing. Employees who can’t afford to pay for home delivery and tip others are anxious and already eating less than they should. Schools are working to stay connected to the kids, but it is hard. Rents and mortgages are due for many in less than a week as the last paychecks to be expected for a while go out almost as quickly as they come in.
But what about show business?
Even the Chicken Littles are tired. After all, how many times can the sky fall in a month?
Early VOD efforts at increased pricing—$20 for a rental—started last Friday and the fantasy that this could be the New Normal seems dead after just one weekend. (Sky Up!) A lot more on this later in the column.
Exhibition pled its case to Congress to get a carve-out in the $2 trillion stimulus. (They appear to have succeeded.) The dynamic of the future of theater owners is somewhat different now than it might have been 30 years ago with all the consolidation. But no one really wants to see a large percentage of theaters go under, including the landlords and loaning banks. Like so much of the business world, the balance is delicate and not all on the side of the people who have the power to say, “no.” If they say “no” too much, then the people they answer to start saying “no” as well.
The ongoing flaw in the Death of Theatrical argument is that millions love going out to the movies. And those people spend more per person than movies can generate in any other delivery system.
I often wonder whether media has come to deny this $30+ billion in annual revenue as significant because we, in the media, have become so obsessed with clicks that we now value quantity over quality almost exclusively. If it was argued through, copper would be better than gold, rhinestones better than diamonds, and endlessly rewritten content from the rare journalists who actually do the legwork would be valued over… well… journalism.
The television and streaming business will start having trouble come the fall, not so much this summer. That is when content flow will dry up. As others noted, there is an opportunity to clear out the crap. But expect a fresh wave of game-show reboots and reality shows to have an oversized footprint in September through Thanksgiving, maybe until 2021.
The biggest question in the industry right now is whether HBO Max and Peacock will launch in the midst of this. Theoretically, they can move forward. But like a show about to open on Broadway, there is a lot of shaking down to do once you get into the theater and start selling tickets.
Under these very unique circumstances, both HBO Max and Peacock should launch for free for everyone for their first three months. Simple as that. Limit content to some degree. Don’t launch originals, or instead launch very selectively. But open the gates. No credit card. No period leading to the moment you get charged for a month and forever more. No games. If you can get the app, you can get the content. Just sign up and watch. Until America is feeling like America again and you have created goodwill with 50 million households.
And when the three months is over—say August 1—offer an aarray of ways to join. Meanwhile, they would have harvested a load of intel about who watches what and why they love or don’t love the service.
Thing is, no one wants another hand in their pocket as the well threatens to run dry. The first 10 million customers won’t care. They are still paying for AOL dial-up every month and have no idea. But the next 50 million are paying a lot of attention. Some are cord-cutters. Some are not. But there is one thing that makes everyone happy… free.
What’s scary about this strategy is that Amazon has over 100 million Prime members in America and fewer than 20% use Prime Video, which one of the subscription’s benefits. But both Peacock and HBO Max have more marketable bait than Amazon Prime, even with “Maisel” and “Hunters” and “Boys.”
But we are all locked down with the TV. Something fresh, even if it’s only a well-remembered library, wlll be embraced. Especially for free.
The company with the most to benefit is, yes, Netflix. People aren’t going to cancel their subs, even if finding something you want to watch after spending 40 hours on the app in a recent week will get harder and harder. But better, this is a way for Netflix to not spend a couple billion on production without anyone pointing fingers. And that is the smartest thing the company could do right now. If anyone is in line for a budget haircut, it’s Netflix. This is great cover.
Another potential winner in this situation is… taa-dah… industry unions. The pressure on WGA to figure it all out is off the table, as no one is allowed to sit any anyone else’s table. The SAG/AFTRA contact comes up on June 30. This is the perfect opportunity for the two unions that have a desperate need to re-set the storyline with The Man to sync things up. Of course, the industry-friendly SAG leadership team would have to be willing to get into the fight in a real way. And while the opportunity to make that happen is kind of thrilling, the likelihood of the SAG majority showing any grit on this is kind of depressing.
Over at The Academy, I expect that Dawn Hudson, bolstered by a new contract through at least May 2023, as well as a raise in the face of many failures, will remain reactive instead of proactive and screw things up even further.
Oh, it’s going to be a sick-making day when the HPFA takes a step ahead of AMPAS in the legitimacy of its methods and practices. But all this ruckus about significant changes in the face of Coronavirus goes right up there with the “Popular Oscar.” Why does The Academy Board of Governors insist on appearing to be a bunch of out-of-touch old people who are so desperate for their grandkids to watch the show that they are willing to pay them for their attention?
These are really smart, savvy people. The only rule that should remotely be considered is a one-year abeyance of the rule about screening before being shown on post-theatrical media before qualifying theatrically. And that variation should end six weeks after theaters open up widely again.
As for the 2021 show, I suggest that they spend the next two months begging certain people to produce. (But they spent six months this year begging certain people to produce to no avail.) The problem is growing because it used to just be a time suck. Now. having your name on the show makes you a target. I believe that serious discussions about how to change the whole process should happen, and not just stunts to get someone through their next CEO contract.
The studios have other things to worry about beyond their movies. Disney has a giant problem with Parks. That is their Achilles heel. Big time. Comcast and AT&T have to protect their cable and satellite businesses… although I believe people are change-averse in moments of extreme tension. Paramount and Sony are in wheel-spinning mode, as they too often have been this last few years.
There will be another side to this. Human nature will not be transformed. Selling people stuff isn’t going to become a unique new effort.
But lockdown is a weird sensation. I was traveling a lot around 9/11. Domestic and international. And it is nothing compared to this. There were fears and odd looks and limited availability of lots of things. The feeling after 9/11 will be more like the fear next fall about a recurring wave, still pre-cure. But this… months shut in… good and bad… messes with the mind. About this, the president/fool is correct. But his response to it is childlike and not adult, much less like a leader.
We aren’t close. But let’s not throw people out of the boat now for fear of running out of food next week. We’ll get there. As. my mother used to say, “It’s an experience!”
And now… a more detailed analysis of this past weekend on the VOD side.
We don’t know the actual numbers behind the iTunes or Fandango Top Ten lists. Suffice it to say that the gross numbers are less than you are led to believe. Perspective is offered in that The Gentlemen, The Fittest, and Dolittle are all in the top 8 on iTunes.
But even in the broader picture, here is the point… the only $20 to rent only title to make the Top 10 was… nothing. The Invisible Man (a terrific film, see it!) was the highest ranking film at #13. None of the other $20 to rent titles made the Top 20. And that #13 showing was with the film coming in as the #1 and #2 box office movie in weeks past and as the most headlined title in media story after media story after media story.
I don’t know if Universal will be shy about it, but the financially sound choice would be to flip it over to $20 to buy and $6 to rent this Friday. I would even consider converting the rental buyers from last week to owners. Because this experiment just didn’t work. Disappointment all around, but in the big picture, it would be have the best financial upside for the studio. (I would also plan for a funky theatrical re-release on 200- 500 screens when things open up again… “See the movie that Coronavirus didn’t want you to see with an audience!”)
What was working on iTunes last weekend? $20 to buy. Nothing too unusual. Onward was #1, sale only, coming out early, though 1917, which has been out for sale only for 2 weeks, added rental on Tuesday (3/24) and pushed past Onward immediately. Birds of Prey is the current #3, coming to digital early, offering a $20 sale price only (rental on April 7, delayed from March 24, according to Vulture). #4 is Bloodshot, sale only, no rental until June. Closing out the Top 5 is The Gentlemen, which set a lower sale price at $15 with no rental until April 14.
I’m not suggesting there were not benefits to opening early for these films. But most of those benefits can be attributed to the theatrical marketing campaigns that had either been going for a while or were in the heat of pre-release. But the goal is not to be #1 on iTunes… the goal is to make the most money with your product. (My chop-up of the iTunes Top 20 is at the bottom of this piece.)
Warner Bros. has one of the experimentally dated releases now in digital, The Way Back. It’s #10. $20 for sale. Rental scheduled for May. It’s one of those titles that was not ever going to be a theatrical high flyer, unless it was an awards title, which the studio chose against months ago. I don’t know if the film sold 50,000 units ($1m) or 100,000 or 250,000. But I can read the tea leaves and estimate that it didn’t do much more in digital than it would have in the normal window model.
Whatever my tea leaves say, after one weekend of that experiment, the question of whether Wonder Woman 1984 would try to go direct-to-streaming was answered. “NO!”
I welcome the April 10 release of Trolls World Tour direct-to-digital, in some part because I expect it to confirm the flaw in the thinking in another segment of this discussion. If I were advising Universal for money, I would be begging them to take the one win that is really left for this movie, which is to become a hero to movie exhibitors and kill the digital release. I don’t think they need to be responding to threats by the National Association of Theater Owners. The movie was borderline before, is borderline now, and it will be borderline if they delay and wait for a theatrical release. But they have a chance to really change the story and make the future for theatrical – which they are dependent on – a bit brighter.
That leaves the third tier of day-n-date waiting for a brave sucke… uh, soul to try it out. A big, wide release movie going straight to paid streaming. And for everyone trying to make this a one-size-fits-all, Paramount selling off a movie they didn’t know how to market to Netflix. That ain’t a paradigm shift. That’s as old as the hills. (Anyone want to discuss Slumdog Millionaire?)
It will make my friends in exhibition crazy, but BRING IT ON!!! How I want to be in those numbers, when day-n-date comes marching in!
It used to be the thing that was going to far to compare someone to Hitler. And now, as he prepares to smother thousands of New Yorkers in their hospital beds, calling someone “Trump-like” is a nasty thing. But man, the people who really, really, really want to be right about The Future are very Trumplike. No matter how the facts are stacked and restacked in front of them, they insist that things must change because… well, people have been making these arguments for decades.
You know what? If the world is really ending, great. Let’s all go Wall-E and survive as best we can.
Here is a rundown of the value proposition amongst todays iTunes Top 20 today (3/26):
$20 to buy
Birds of Prey
The Way Back
Star Wars 9
$20 to buy, $6 to rent
Spies in Disguise
Ford v Ferrari
$20 to rent
The Invisible Man
$15 to buy
$15 to buy, $6 to rent
$13 to buy, $5 to rent
$10 to buy, $6 to rent
$10 to buy, $4 to rent
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