Corona/Streaming: The End of Box Office As We Know It?

[Ryan Reynolds]

Big Tuesday drops cause of D+ launch 😀

[EmpireCity]

Hello, everyone.  I come in peace.  Wanted to post some thoughts about the landscape change taking place going forward and how it affects movie theaters, box office, studio relations an more.  

 

At first you may think this is some hot take based off Disney+, but it isn't.  This is something that has been on my mind for a long time but recent events have, in my opinion, have confirmed what I have been seeing build up for years.  Movie theaters and box office as we know it is going to drastically change.  

 

NATO has always had the upper hand when it came to protecting the 90 day release window.  They carried a $10b-$12b hammer called the box office and weren't afraid to use it.  Studios would float the idea of breaking that window, but at the end of the day no studio dared break it.  Then Netflix came along with quality films and the big 3 of course wouldn't comply with their shunning of the 90 day release window, but smaller and independent theaters have broken ranks.  They need the product and revenue to fill screens and can't pass up things like Roma and The Irishman, especially when Netflix is offering 35% terms and Disney is offering 65% terms.  

 

The issue is that theater owners have been getting squeezed for years with rising costs.  Studios keep pushing harder and harder for a bigger cut.  4K and laser projectors, Atmos sound, huge IMAX screens, and now the demand for luxury recliners in every theater have driven the cost of doing business through the roof.  This is all while the cost of high quality home theater equipment has dropped to all time lows.  You can hit your local Black Friday sales and grab a quality name brand 75'' 4K Smart TV for $750 and a nice soundbar with a subwoofer for $150.  

 

Theater owner costs of course are passed onto consumers in the form of higher ticket price, booking fees, $8 popcorn, $12 cocktails and an outing that might cost $100+ for a family of four to see a film.  

 

Netflix, Disney+ and HBO Max and their imminent combined success is going to change everything.  Disney+ alone is projecting to have $9b-$12b of revenue per year within 5 years.  Compare that with the entire box office domestic take of $11.8b in 2018.  Those revenues of course are split roughly 55% to studios and 45% to theater owners.  Disney+ has no split and Disney keeps nearly all of it.  

 

The biggest thing these streaming service will create is a viable distribution platform that is cost effective.  That was always NATO's firewall in the fight in preserving the 90 day release window.  They controlled where and when the consumer could see films in high quality.  These studio owned streaming platforms now eliminate all of that leverage.  You see already films that were scheduled for a theatrical release like Noelle and Superintelligence heading for streaming instead of the theater.  

 

The counter point to that will be that the movies that have been pulled from theatrical and put on streaming were largely poorly test screened and larger blockbusters will certainly still hit the theater.  I agree with this point, but what will change is when and how.  

 

I think within the next few years the 90 day release window will be eliminated or adjusted.  The model going forward will be something like this.....

 

Disney will release Thor: Love and Thunder day and date on Disney+ (and possibly other services like Vudu, Amazon) and in theaters. Disney+ subscribers and other streaming platforms can pay an extra $25 to see it immediately.  If they choose not to, they can wait however many months Disney chooses to put it on the streaming platform as part of the regular cost.  The movie will also be released in theaters for a normal ticket price.  

 

It is coming.  Studios have floated this for years trying to negotiate with NATO to make it work.  They never budged and had all the leverage.  Now that leverage is gone.  Theater owners will have no choice but to accept as not going along with it would be like cutting off their leg to save their foot.  

 

What I ultimately think for movie theaters is that there will be a large contraction over the next decade and even more mergers so they can survive.  

 

Looking forward to discussing as I think not enough of a discussion is being had on it.  

 

 

[TMP]

6 minutes ago, EmpireCity said:

Looking forward to discussing as I think not enough of a discussion is being had on it.  

I can't tell if this is a joke or not, since so much of the conversation around streaming services is about whether they'll eliminate the multiplex or not

[Maxmoser3]

Studios wasting their time on big budget failures. Netflix overcoming theaters because Disney taking over theaters and theatrical studios are getting pussified little ass bitches 

[EmpireCity]

1 minute ago, TMP said:

I can't tell if this is a joke or not, since so much of the conversation around streaming services is about whether they'll eliminate the multiplex or not

 

I meant more of the logistics of it, not the actual overall "will theaters be eliminated" part.  

[redfirebird2008]

It'll get to the point where only the big franchise type movies are released in theaters. Everything else will go to home video.

[EmpireCity]

The other factor that is killing movie theaters, especially smaller and independent ones, is that Disney has almost fully pulled the Fox catalog.  

 

No more filling theaters with Die Hard during the Holidays.  No more sold out theaters of Moulin Rouge on Valentine's week.  No more Sound of Music on Mother's Day.  Many more examples of how much this hurts theaters that depended on that 10%-15% of their business that often filled lonely Tuesday or Wednesday nights during slow times.  

[EmpireCity]

2 minutes ago, redfirebird2008 said:

It'll get to the point where only the big franchise type movies are released in theaters. Everything else will go to home video.

 

I truly believe it will be a modified version of that with everything being available on both streaming and theaters day and date or as close of a window to that as possible.  The best NATO can hope for is maybe they can preserve a 2 week or 4 week window.  

[Eric Atreides]

Hello.

 

We actually have a thread (made by me) related to your thread here if you're curious.

 

 

[EmpireCity]

1 minute ago, Eric Plus said:

Hello.

 

We actually have a thread (made by me) related to your thread here if you're curious.

 

 

Cool.  I will check that out.  

[Alli]

No more box office.   how will we know which movies are successful if the streaming won't release stats for their films?

[Cap]

13 minutes ago, Maxmoser3 said:

Studios wasting their time on big budget failures. Netflix overcoming theaters because Disney taking over theaters and theatrical studios are getting pussified little ass bitches 

None of this language is needed. Thank you. 

[eddyxx]

3 minutes ago, Alli said:

No more box office.   how will we know which movies are successful if the streaming won't release stats for their films?

Facebook and twitter trends 

[TMP]

12 minutes ago, EmpireCity said:

No more filling theaters with Die Hard during the Holidays.  No more sold out theaters of Moulin Rouge on Valentine's week.  No more Sound of Music on Mother's Day.  Many more examples of how much this hurts theaters that depended on that 10%-15% of their business that often filled lonely Tuesday or Wednesday nights during slow times.  

The price to pay for X-Men in the MCU...

[Cap]

15 minutes ago, EmpireCity said:

The other factor that is killing movie theaters, especially smaller and independent ones, is that Disney has almost fully pulled the Fox catalog.  

 

No more filling theaters with Die Hard during the Holidays.  No more sold out theaters of Moulin Rouge on Valentine's week.  No more Sound of Music on Mother's Day.  Many more examples of how much this hurts theaters that depended on that 10%-15% of their business that often filled lonely Tuesday or Wednesday nights during slow times.  

I agree this practice is bogus, and the wrong call. I hope Disney reverses it. That said, it wasn’t like Fox owned every movie ever made. Can’t show Die Hard? Show White Christmas or It’s A Wonderful Life. Can’t show Moulin Rouge? Show West Side Story. Can’t show Sound of Music? Show Step Mom. 
 

That’s why I think the decision is incredibly narrow minded. You’re not gonna stop the process. You’re just going to force The theaters to show different films. The real issue will be if Warner Bros. follow suit once HBO Max exists.  That’s the real danger. That Disney is setting a precedent. 

[eddyxx]

2 minutes ago, TMP said:

The price to pay for X-Men in the MCU...

The fox catalog wouldve just got bought out by AT&T or Comcast if it wasnt for Disney.

[EmpireCity]

I also wanted to add that if this happens, it won't fully go into effect until Disney+ and HBO Max are set up around the world.  Theaters still have the leverage of overseas box office.  

[lorddemaxus]

I think the problem is with franchise films too. They are sucking up the conversation from other films. We've had some of the biggest original hits of the year one months with no superhero movies (OUATIH in August, Hustlers in September, FvF and Midway in Nov). The fact that we are getting 8 MCU and DC movies (and of course all those Disney+ MCU and HBO Max DC shows so that we can be reminded that these franchises exist every day of our lives) in 2021 just sounds awful to me.

[Orestes]

I wonder, have the subscription services like AMCs A-List and Regal's Unlimited been having a positive impact at all?

[TMP]

Just now, lorddemaxus said:

I think the problem is with franchise films too. They are sucking up the conversation from other films. We've had some of the biggest original hits of the year one months with no superhero movies (OUATIH in August, Hustlers in September, FvF and Midway in Nov). The fact that we are getting 8 MCU and DC movies (and of course all those Disney+ MCU and HBO Max DC shows so that we can be reminded that these franchises exist every day of our lives) in 2021 just sounds awful to me.

The DC shows won't make a big impact; none of Berlanti's stuff's ever captured the Zeitgeist. We're still getting 8 MCU projects and 3 DC films that year though. Talk about over-saturation