MCN Commentary & Analysis

Uncle David’s House Of Box Office: Reboot

I haven’t written about weekly box office in a really long time. Even before the pandemic, it became an overwrought exercise.

But Disney has triggered me.

I’m not even clear in my own head about what it is that so worries me about their behavior around Black Widow and Jungle Cruise. Even when they announced the day-n-date Premium Video On Demand (PVOD) for these two titles, it didn’t bother me much, no matter how much I believe in theatrical as a financial necessity by distributors. I saw two films, still in the window of COVID, taking advantage of alternative revenue opportunity while still pushing out wide theatrical releases. Would this cannibalize the theatrical? Yes. But not to a huge degree, I thought.

And indeed… I don’t think the option cannibalized the theatrical release a whole lot. Even if you assume two people for every PVOD purchase buying theatrical tickets, it was just three million units, translating to $60 million in theatrical revenue that didn’t happen. This would not have made Black Widow an $800 million grosser.

But consumer behavior is a stew, not a series of a la carte meals. (That “everything is a one-off” mindset is rampant in media now, which makes for bad journalism… but that is another discussion.) So take it back to December and Wonder Woman 1984. And then, Warners’ announcement that all 2021 titles would go to theaters and streaming day-n-date.

Since Christmas, there have been 55 wide domestic releases. The Top 20 includes all of the films that were released at all in the U.S. and have grossed over $40 million worldwide. (In 2020, there were sixteen domestically released films with over $40 million worldwide and only six released after March. In 1999, there were 104 such releases.)

Of the twenty 2021 releases that have grossed over $40 million worldwide, twelve had some form of day-n-date availability. Nine of those twelve were available “free” with a subscription to a streaming service. Three were available on Disney+ with a $30 price point in addition to the subscription.

The highest grosser of the Top 20 (domestic and international) to-date is F9, with a 47-day window from theatrical to Premium VOD, $19.99 for a rental only. There is no purchasing option. Presale of the physical media options is on Amazon, but undated.

Black Widow, the #2 domestic grosser since Christmas 2020, will pass F9 domestically today (8/2/210) or tomorrow. (Look for new ads.) The weakness of the gross, aside from the pandemic, truly shows internationally more than domestically. It just tips over the 50% mark domestic to international, which is rare for a big movie and you have to go back to Iron Man 2 to find as poor a ratio for a Marvel title. So people looking to figure out “what happened?” should be looking at the international release, more than the domestic.

Widow is coming out online “early” (as promoted by Disney – “The Wait Is Over When Marvel Studios’ ‘Black Widow’ Lands Early on Digital Aug. 10 and 4K Ultra HD™, Blu-ray™ and DVD Sept. 14“). That’s a 32-day window… adding a two-week early digital release on top of the PVOD on Disney+. Will media figure out that this is a concession to the internal perception of failure of the Disney+ $30 PVOD offering, expanding to a wider audience at a lower price point in just 32 days? Disney is now collapsing its own windows, too.

The #3 domestic film is A Quiet Place Part II, which was released exclusively to theatrical. Paramount pushed the film to Paramount+ and sale-only VOD at the $19.99 price point on July 13 after its May 28 release (47 days).

The only other $100 million domestic grosser in this period is Godzilla vs Kong… but just barely ($100,392,257). This is the highest- grossing film from Warners under Kilar’s Folly, both domestic and international.

How are things going with the Warners program? Well, they have thrown nine films down the well so far. And thanks to international, where Warners has not launched HBO Max, they have generated $1.3 billion at the box office. $757 million on that is the international on 4 titles (WW84, Space Jam 2, Conjuring 4, Zilla v Kong).

However… the added costs of releasing all those titles onto HBO Max alone is surely greater than the $600-$700 million in theatrical rentals. And then there is the $800 million or so in production costs for these nine films. And while there may have been some thinning of the marketing spends, it wasn’t in great evidence, though all advertised HBO Max as well. So there goes another billion or so (conservatively).

So… the last seven months and change has been (conservatively) a $2 billion ad for HBO Max. They have reportly added about 10 million subscribers since HBO Max launched. At $180 a year, that’s $1.8 billion in revenue in a year. So you could make a case that this effort is almost breakeven.

Of course, you would have to assume that there is no churn with those 10 million new subs… and you have to not count all the other spending on HBO Max including originals and internal licensing like Friends and The Friends Reunion, as well as lost licensing revenue from the library… and you also have to ignore the amount of money not being generated in theatrical because of the day-n-date release of these WB titles to HBO Max. (And I couldn’t begin to figure out what percentage of HBO subs are now paying significantly less for HBO than they were before the HBO Max launch… but it is certainly double digits… which has nothing to do with the movie dump, to be fair.)

My take would be that they have thrown $2 billion or so down the well and had pretty much the same effect as had they just invested the $3 billion or so that they would have spent without sacrificing theatrical. And with every film with a significant budget and a legit chance of breaking through theatrically, they are burning more cash chasing consumers who have either already bought in or are coming just for one title or another and will churn away quickly.

The Suicide Squad is going to be interesting, as the first film from this IP, Suicide Squad, leaned domestic on its successful release in 2016, only 57% coming from international, which is unusual for a comic book movie. But it was a less familiar title and even the $422 million it did overseas was likely driven by the presence of Will Smith. Domestically, it did $325 million and the marketing leaned heavily into Margot Robbie’s Harley Quinn, The Joker, and even Batman, who appears only briefly in a dream sequence.

So what should be expected of The Suicide Squad? Internationally, there is no more Will Smith or The Joker or Batman… so can it get to $200 million? Possibly. Domestically? Can it be the second WB title of 2021 to hit $100 million? Iffy. I expect a strong Thursday/Friday number, driven by the hardcore audience that can name a single character in the film who isn’t Harley Quinn. After that? A hard sale. It doesn’t market like a sequel to a hit. Love some of these actors (Idris, Cena & Capaldi for starters), but none of them can open a movie. Even the James Gunn of it – see Guardians of the Galaxy, released on the same weekend in 2014 – doesn’t feel fully connected to this pitch.

Really, The Suicide Squad really stinks of being the kind of movie that opens soft ($80 million in the old world) and then builds an audience with word-of-mouth over the first summer week. But there isn’t much indication that this is possible at a high level in the day-n-date environment. Because if you aren’t in on the theatrical from opening weekend, you are waiting for it to turn up on your TV. That is what distributors are screaming at potential ticket buyers… week after week after week.

Before I go… one last painful statistic.

The worldwide gross for the Top 20 films this year (so far) is $3.4 billion.

The domestic-only gross of the Top 20 movies just last summer was $3.6 billion.

The total in VOD revenue for 2021 to-date, including Disney+ and Universal and all the variations and all the $5-ish rentals, is surely well under $1 billion. And that was boosted significantly by COVID.

A little perspective please…

6 Responses to “Uncle David’s House Of Box Office: Reboot”

  1. Christian says:

    Before the commenter crew starts in with questions about whether $2 billion in box office is enough for a title to break even or whether it’ll take $3 billion to do so, can I ask you, David, if you’ll be reporting on arthouse / limited-release box-office? I don’t mean to throw shade, but even in the pre-pandemic era, it was hard to generate a lot of discussion here about smaller releases. The blockbusters suck up all the oxygen. I get that. But talking about the Marvel movies and other franchises repeatedly only leads to an endless cycle of talking about the big releases. There’s still a smaller-distributor part of this business – an arthouse business – that’s vital to sustained moviegoing, right? (It’s not just my age talking, I hope.) I enjoy reading the weekly box-office reports at various sites and are glad they’re back, but my main question is, with the majors playing games about when/how to report the numbers for their releases, are smaller players playing similar games? The numbers I’ve seen for smaller films are Very Grim, but any discussion of the near- or long-term consequences of that seeming dropoff – and major consequences that might follow (a complete collapse of a theatrical model for such films?) – gets pushed aside to talk about the potential consequences of the latest Disney film. I get it – sort of. So much of the industry flows from the bigger releases. But I drive by an arthouse theater every day, see titles of the marquee that I’m pretty sure aren’t pulling in crowds. When I try to confirm that, I have a hard time getting the data (or I did, until I stopped trying). Does this make sense? Maybe this just isn’t the forum for such discussion. But with overall commenting having dropped off severely, I thought I’d give it one more go and ask what I might expect from your box-office posts specifically.

  2. cadavra says:

    I’m not the best person to comment here, being a retiree with the luxury of attending weekday matinees when theatres are far less crowded. Still, I wouldn’t dream of watching an epic picture like GvK or Jungle Cruise, even for free in the former case, when so much of their impact depends on the big screen.

  3. Bob Burns says:

    Black Widow has $360M, Jungle Cruise, $128M, and Suicide Squad $71M. Do these number even cover the costs of promoting their theatrical releases… especially after 50% is given to the theater chains?

    I don’t see much justification for the assertion that Warner threw away two billion. That two billion in revenue never existed.

  4. cadavra says:

    Even as a purely theatrical release, F9 did half of F8., the lowest domestic gross since #4. WIDOW is the lowest-grossing MCU title ever. And despite far better reviews, SQUAD will be lucky to do 1/7 of its hated predecessor.

    Don’t tell me the pandemic didn’t have an effect. (And they wouldn’t be streaming without it.)

  5. William R Burns Jr says:

    Theatrical in LA is a different experience than theatrical for regular schlubs elsewhere. We don’t get peak theatrical the way that the LA film press, and many in the industry enjoy theatrical. For example, David gets to see the films of people he has met, interviewed and joked around with….. just an example of the difference. The decision to go out to see a movie, for many, has always been marginal. Now, why sit in a theater with people who refuse to mask, or get vaccinated, when facing a virus much more dangerous than we faced a year ago? Theatrical is just that much less attractive for many. Breakthrough cases can be pretty rugged.

    COVID will be very dangerous as long as a tiny percentage of people in the world are vaccinated, and the virus is free to mutate. We are not living through an interruption. It is much more likely that we will be living like this for many years, maybe for our lifetimes.

    Anecdotally, we just returned from San Miguel de Allende and Mexico City. Everyone wears masks everywhere. Everyone. Everyone’s temperature is taken when entering every store, bar or restaurant…. and you get a squirt of hand sanitizer…. everywhere. Although they are far less vaccinated,ce. they have far fewer cases. Fewer assholes = less covid. Something to think about when looking at domestic versus international box office. If the theater chains and the Hollywood PR gods had actual brains, they would be running vaccination and masking ads with every trailer and every TV spot.

  6. Bradley Laing says:

    —This, below is not about two Hong Kong Democracy Movement related documentaries, one at the April 25, 2021 Oscar telecast, the Other at the recent Cannes Film Festival. But if the PRC government does not like it, does this count as defying the PRC dictatorship by Hollywood?

    —Oppress the People of Hong Kong, and the film industry strikes back with a good heist movie?

    “With the news that comedic actor Jimmy O. Yang will write the adaptation for Jon M. Chu’s forthcoming film The Great Chinese Art Heist comes the inevitable backlash from members of the Chinese community who object to the premise of the movie and the article on which it is based.

    In 2018, GQ published on article by Alex W. Palmer detailing a recent rash of high-profile heists of Chinese antiquities from European museums.

    It explored the possibility that the Chinese government was actually behind the thefts in an unorthodox effort to secure the restitution of artworks and artifacts taken by colonial powers, particularly from Beijing’s old Summer Palace, destroyed by French and British forces in 1860.

    China’s interest in locating and recovering its lost art has been made clear by the state-run conglomerate China Poly Group. Palmer wrote of the business’s treasure-hunting delegation that visited international museums in search of stolen works in 2009.

    Poly Group was less than pleased that article questioned whether the robberies were related to its research efforts.”

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