| March 6, 2022
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…
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