| December 4, 2020
I have avoided writing constantly about the immediate prospects of exhibition and studios because we didn’t get to the next significant event between the last Movie Content Scoreboard in July and the Tenet/Mulan experiments of the last couple weeks.
I will deliver “Episode III – After The Fall” soon. But I wanted to keep the focus on the two recent major experiments. I keep reading emotional postures on the future of exhibition and VOD. But the studios have real financial skin in the game, while those writing about it have none… just a desire for what they would like to be entertained by, as soon as possible, in a way that makes them comfortable
The easier analysis of the two major movie releases is Mulan. It’s been two weekends+ and we haven’t heard a word about how much business was done in the Disney+ SuperPremium VOD window. We know that the film hasn’t done much business in any international markets where it landed in theatrical. And Disney knows that even if they add, say 50%, onto the Trolls World Tour number, this experiment is a streaming failure.
Unless there is a great surprise coming, Disney will lose no less than $50 million on this Mulan experiment. There is no conservative estimate of what Mulan would hav done in normal windows that would have ended up in a loss. The hope for this experiment is that it would at least break even, if not make some fraction of what normal windows would offer.
If it were not for the public embarrassment, Disney would likely be well-served, financially, to refund half the Mulan SPVOD fee that anyone has paid and push the film out on normal PVOD at $15 a pop. This would make the market much wider instantly, and most likely return a higher net. But that is not going to happen because… again… the public embarrassment at this point. Disney has much bigger issues.
Tenet is more complex, in every way. $30 million domestic. $180 international, almost a third of which is China, which usually costs an extra 20% of gross against rentals. But with premium deals for theatrical done by WB, that is probably a 40% bigger hit than any other country.
A generous estimate of Tenet rentals coming back to WB worldwide after three weekends is $130 million.
Do I believe that there is a second wind for Tenet? Absolutely. But if the film’s PVOD brings in 50% more than the world record for VOD, the generous estimate on gross returns to WB for Tenet is about $150 million.
So we made it to $280 million. Now add another generous $80m in post-theatrical/VOD. Hell, let’s go $150 million gross with a massively successful theatrical rerelease returning $75 million. $435 million. WB doesn’t lose money on Tenet in this most generous of scenarios.
What would Tenet have looked like in the normal series of windows?
Conservative worldwide gross of $650 million, returning $400 million to the studio. (Remember the pumped-up split. And this estimates $150 million of the gross from China, at a reduced split.)
VOD and physical media sales net a conservative $200 million.
Premium Cable/Satellite window, conservatively $30 million.
Streaming second window, say $20 million in the first two years.
$650 million, conservatively, with another $50 million in potential incidental revenues from areas like Merchandising, International Post-Theatrical, etc. AND don’t forget that the marketing budget is made smaller by over $100 million in cross-promotional ad-committed marketing deals that aren’t happening under the current situation.
Add an extra $100 million in marketing costs, if you will, for a “regular” release. Take every financial advantage you can in adding it all up. Pump up the current release all you like and tighten the margins on a traditional windowed non-COVID release… and you are still leaving at least $100 million on the table in the current scenario. On a $200 million investment in production.
There are at least 16 completed movies in a similar boat as Mulan and Tenet. So aside from “I want to see it on my TV right NOW!” what argument can anyone make to cause studios to see any advantage in moving forward right now?
That discussion in Episode 3…
| December 4, 2020
| December 3, 2020
| November 26, 2020
Steven Zeitchik: "It's worth remembering -- because many people seem to have forgotten -- that before the pandemic U.S. movie theaters had their best two-year period ever, with a collective $23 billion in revenue. This isn't some dying model that digital needs to come in and save. Those sales, incidentally, likely include the many people who swear they will never go to a movie theater again. When the new Marvel or Jordan Peele or Mission: Impossible or Parasite comes only to theaters, I suspect they'll be lining up like they always have. What’s troubling is the false binary: streaming vs theaters. You can like both! Netflix is good and theaters are good! Institutions don't have to die just because something new is cool. And historically it takes more than one company in a strategically tough spot to kill a model. Of course ownership can change and experiences can change. We watched silent films and newsreels and serials in movie houses, and then we saw gritty crime films and pop films and dramatic films, and then 3-D films and franchise films. And there weren't showtimes and then there were showtimes, and seats weren't reserved and then they were reserved; we went from movie palaces to multiplexes to downtown dine-in rooms with reclining seats. And studios owned theaters and then families owned theaters and then entrepreneurs did and then big corporate chains and soon studios might own theaters again, and package movies as experiences or events or something new we haven't yet thought of. Of course it's theoretically possible an entire American institution just goes away. But given how durable it's been over the decades, I wouldn't bet on it. And certainly not because one company, for its own internal reasons, at one moment, needs to put its movies somewhere else."
| December 5, 2020
"Stankey decided to use HBO as the centerpiece for a new mission: Build a true Netflix competitor, dubbed HBO Max. When Stankey took over as AT&T’s CEO, he passed that goal to new WarnerMedia CEO Jason Kilar, who previously launched Hulu. Stankey has dismantled the old Time Warner, spurring dozens of executives from all parts of the company to depart. He is attempting to funnel all of the company’s resources from cable, film, and HBO into HBO Max. Disney, Comcast’s NBCUniversal and ViacomCBS are all going through similar changes now to prepare for a world where subscription streaming services overtake cable as the world’s primary form of television consumption. Stankey — the MBA-buzzword, deep-voiced phone guy — was ahead of the trend. Still, his vision irritated some veteran WarnerMedia executives, who question Stankey’s knowledge of media. The execution of his mission, which Kilar has overseen since May, has been marred by strategic confusion and culture clashes, according to more than a dozen high-ranking WarnerMedia employees, about half of whom have left the company in the past six months. For now, investors don’t like what they see. AT&T is trading near a 10-year low."
| December 5, 2020
Nicholas Kristof: "I've spent the last few months reporting this piece about Pornhub. What most people don't realize is that it's infested with rape videos. I talked to child trafficking survivors whose rape videos the company had distributed and monetized. Unconscionable. Let's be clear: The issue is not porn, it's rape. Just as the problem with Harvey Weinstein or Bill Cosby wasn't the sex but the lack of consent, it's the same with Pornhub. Search "13yo" on Pornhub, and you get more than 100,000 videos. There are playlists called "Under Age." A special question for Canada, because Pornhub is based in Montreal. Prime Minister Trudeau, you are rightly proud of your reputation as a feminist. So why does Canada host a company that inflicts rape videos on the world? It's not just Pornhub, of course. Companies have enjoyed impunity, so even as we prosecuted individuals like Jeffrey Epstein we allowed corporations like Mindgeek (which owns Pornhub) to monetize rape videos. Pornhub is Jeffrey Epstein times 1,000. Solutions are difficult and complicated. I don't have perfect ways to solve the problem of online child sexual abuse. But I do outline steps that would help. These survivors risked so much to tell their stories."
| December 5, 2020
| December 13, 2019
| December 4, 2019
| December 4, 2019