MCN Commentary & Analysis

Movie Content Scoreboard: Episode 2 – Tenet & Mulan

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…

9 Responses to “Movie Content Scoreboard: Episode 2 – Tenet & Mulan”

  1. Dr Wally Rises says:

    Thank you Dave. Two small rejoinders : Mulan has been out for 12 days, not three weeks.. And there is a growing belief and momentum now that Soul will now inevitably be going the same Disney+ route come November.. Which can at least be taken as circumstantial evidence that Mulan has done well enough to proceed with repeating the experiment?

  2. Stella's Boy says:

    The CDC saying normal is possible by late 2021 with a vaccine would seem to be bad news for studios and movie theaters.

  3. David Poland says:

    I will adjust the Mulan timing.

    Whose growing belief and momentum, Dr Wally? Someone floated it and now it’s a full on rumor that Disney has denied.

  4. Stella's Boy says:

    I’d say Tenet proves that most people don’t feel safe going to a movie theater right now and have little desire to. That seems like a message studios and movie theaters need to pay close attention to: “A recent Morning Consult report from says only 18% of consumers feel comfortable returning to cinemas.”

  5. AkiraKaneda says:

    A key difference might be whether or not a “quarantine movie” could have movie theater legs post-quarantine.

    For example, Mulan is DOA, with most reviews appreciating the scenery but complaining about the lack of heart and a superhero heroine rather than the brave girl portrayed in the animated film. You put Mulan in theaters in a year and very few will go.

    Tenet, on the other hand, is from one of the best directors working today with a sizable following who will not only see his films several times to dissect them, but will also chase a 70MM screening if they can make it happen. (That’s my oldest son and I for Dunkirk.) You give me a safe screening of Tenet in six months to a year, I’ll be there with my family.

    I could be very wrong — I have been in the past! — but for truly good event pictures, I think audiences will head to the theater if the experience is worth it. (I’ve seen every Bond movie in the theater since A View To A Kill — and I’;; see it six months after VOD in a theater if I can.)

  6. David Poland says:

    They are. Clearly.

  7. David Poland says:

    There is little upside to releasing it and then re-releasing it. There are certainly films that can shake money from the tree when theaters are fully open. But that is not a model that the studios will be aiming for.

  8. Dr Wally Rises says:

    ‘Whose growing belief and momentum, Dr Wally? Someone floated it and now it’s a full on rumor that Disney has denied’.

    A fair point. At any rate, if Soul is on American movie screens in November I’d be frankly stunned.

  9. Serg says:

    Isn’t 400 net profit on 650 theatrical an unusually high margin?? Maybe in NA distribs can get 60 cents on the profit dollar, but this margin is certainly much lower international?

    As someone who has minimal experience with South American theatrical market, you’re typically only seeing 30-40 cents on the dollar IF you’re lucky.

Leave a Comment

MCN Commentary & Analysis See All

The News Curated by Ray Pride See All

Artnet

“Half a century ago, my father made a body of work that shocked the art world. Not only had he violated the canon of what a noted abstract artist should be painting at a time of particularly doctrinaire art criticism, but he dared to hold up a mirror to white America, exposing the banality of evil and the systemic racism we are still struggling to confront today.My father dared to unveil white culpability, our shared role in allowing the racist terror that he had witnessed since boyhood, when the Klan marched openly by the thousands in the streets of Los Angeles.”
Four Museums Postpone Philip Guston Career Retrospective, Saying His Anti-Klan Imagery Does Not Belong In This Moment

Artnet | September 25, 2020

Hollywood Reporter

"On September 10, James Packer’s $200 million megayacht IJE was harbored in Tahiti, where it was scheduled to stay for three months. A bailiff attempted to board the luxury liner to serve the film producer and financier and was told to return the following day because Packer was not there. When the bailiff returned, IJE was pulling out of the harbor and heading to Bora Bora with the Australian billionaire onboard. Meanwhile, in Bulgaria, a process server was attempting to serve Millennium Films CEO Avi Lerner at his Eastern Europe studio. Simultaneously, disgraced film producer Brett Ratner and former Warner Bros. chief Kevin Tsujihara were served at their homes in Los Angeles. Sources say the four men were notified of a petition filed September 3 in Los Angeles Superior Court by a woman named Melissa Parker, who was facing off against Clark Grandin, Bruce Hamilton, Gregory Kemp and Walter Nelson. The names wouldn’t ring a bell with anyone in the Hollywood community. That’s because they are pseudonyms, with Parker being a stand-in for Charlotte Kirk — the British actress at the center of a scandal that has led to the ouster of two studio executives from their top perches, Tsujihara and NBCUniversal chief Ron Meyer. The defendants are, in fact, Ratner, Tsujihara, Packer and Lerner. The men have used these pseudonyms in legal documents since 2017 in an attempt to shield their identities amid explosive claims."

Hollywood Reporter | September 25, 2020

Variety

Aaron Sorkin: "When you bring home a puppy, it’s said you should get a crate that is big just about big enough for the puppy to move around. That confined space will make the puppy feel secure. It’s the same with me. I like the four walls of the court and the office. I only have one movie under my belt, Molly’s Game, which had three principal characters. This film has eleven stars, most of whom are leads in their own movies and it has riots and teargas scenes. That’s not part of the puppy crate. Just writing the words, 'Exterior: Scene' on a screenplay makes me dizzy.... When I left Spielberg's house [in 2006], I called my father because I didn’t know about the events Steven was referring to. I said yes because it was Steven and he said there was a trial, so I thought courtroom and that was enough.”

Variety | September 25, 2020

Jonathan Lethem: "The sensation of sitting alone in the theater is one I compulsively compare to going to a brain laundromat. I’m there to have my brain rinsed in the stream of images. I specify “compulsively” because I think of this comparison every time I go. Watching a big screen in the dark relaxes and restores me, and takes me out of the realm of criticism and language that too often overtakes my pleasure at the immersive flow of reading. Those personal “sites”—immersive reading, dreamy-attentive moviegoing—are primal for me, and sacred."

September 24, 2020

The Video Section See All

Mrs. America, Uzo Aduba

David Poland | September 8, 2020

The Podcast Section See All