It looks like Hollywood is recalibrating (again) to try and fix the crumbling movie industry. After direct-to-streaming failed to bring streaming services to profitability, it is back to theaters for feature films.
Over the past few years, Hollywood’s mega-studios attempted to replicate the insane success of Netflix. As I have mentioned, this happened way too late, but sometimes late is better than never. This is not one of those cases.
Yes, suddenly, we were bombarded with shiny, new streaming services: HBOMax, Peacock, Disney+, Paramount+…Billions and billions of dollars were spent to produce (mostly awful) content. The flop sweat shined most brightly when studios dropped what should have been theatrical releases into their respective streamers.
The bottom line of a successful streaming service is attracting and holding monthly subscribers. Unlike cable TV, which is gamed to reward failure, streamers must survive on merit. And so, in a blind panic to replicate Netflix, mega-studios like Disney, Warner Bros. (HBOMax), and Universal (Peacock) assumed the best way to attract and hold subscribers was to exclusively drop a theatrical movie on their streaming service or make a title available to subscribers on the same day it hit theaters.
The result, like most decisions born of desperation, was a failure.
Not only are outlets like Disney+ dealing with billions in debt (spent on dreadful content), but turning theatrical movies into the equivalent of direct-to-video titles you see in Walmart’s DVD section diminished and damaged the brands. There is a notable perception difference between, say, the quality of a Bruce Willis movie that opens in 4,500 theaters and a Bruce Willis title you’ve never heard of until you surf RedBox.
Warner Bros. dumped a full year’s theatrical slate onto HBOMax. Disney whored out Pixar in the same way. Nevertheless, the experiment failed even with the perfect conditions of having theaters closed due to the China Flu.
Here is Variety’s take… It is not all wrong, but I will try to make more sense of it below…
Overall, the domestic box office stands at $2.3 billion, up 36.8% from the same period last year and an astounding 589.5% improvement over 2021, according to Comscore. The exhibition industry is finally looking like its pre-pandemic self again. That’s partly attributable to studios releasing new installments of successful franchises, but it is also linked to a shift in attitude among the major media companies when assessing the value of a theatrical release.
In recent years, Hollywood had a serious case of Netflix envy, with studios opting to launch their own streaming services. To do that, they amassed a lot of red ink building splashy streaming shows and shrunk the amount of time that movies screened exclusively in cinemas as a way of generating enthusiasm for the likes of Disney+, Paramount+ and HBO Max. But lately, Wall Street has soured on the economics of streaming, believing that the media conglomerates that run these services need to be as focused on making money as they are on attracting subscribers. Investors are not too thrilled about all the debt that’s been built up, either. That’s made box office revenues an increasingly vital part of their overall financial health.
Okay, let’s not get too excited. Year-to-date, the 2023 domestic box office is still 20 percent behind 2019—the last normal movie year before the China Flu hit—and 33 percent behind 2018. Nonetheless, it is still smart for Hollywood to shift back to theatrical.
As Variety points out, a good example is Air, the new Matt Damon/Ben Affleck movie. This Amazon movie is not burning up the box office, but it is doing okay. Nevertheless, Amazon’s decision to release it wide theatrically means that when it does arrive on Amazon Prime, it will offer subscribers an exclusive title with the value of a big theatrical release attached to it. Had Amazon gone straight to streaming with Air, the direct-to-video stink would have made it less attractive and valuable.
The problem with streaming services (not called Netflix) is not that these theatrical releases fail to attract enough subscribers. The problem is that there is not enough overall content to hold onto subscribers.
It is great to be able to sit home and watch Halloween Kills (Peacock) or Will Smith’s King James (HBOMax), or Pixar’s Soul (Disney+) on the same day it hits theaters. The problem is these movies are only two hours long, and…now what? What do I watch now?
Netflix’s bottomless pile of content held onto me for over ten years. I only canceled it a few months ago. But Netflix got a jump on everyone, and unlike Disney+, which went all-in on Marvel and Star Wars series, Netflix offers something for everyone.
Every month, Netflix regularly pumps out something from pretty much every genre—from true crime to musicals to horror to fantasy to sci-fi to procedurals to animated… Sadly, the woke culture turned that bottomless pile into a bottomless pile of crap (which is why I canceled), but that is a different topic.
Also, because Netflix has been around for nearly 15 years, it can offer something the newer streamers can not: the regular dropping of a popular show’s newest season. In the past, whenever the wife and I thought about canceling Netflix, we would not because the next season of The Crown or Stranger Things, or Cobra Kai was coming soon.
Because it was only $19.99 for the full year last year, I subscribed to Peacock and felt I got my money’s worth. Still, I have no intention of re-subscribing. There is nothing left to watch.
The biggest stumble these streaming services (not called Netflix) ran into was launching in the woke age, which means that most of their content is unwatchable and off-putting. How many billions has Disney+ wasted on Marvel and Star Wars shows that no one likes that have damaged the brand, including the theatrical ones?
Movies are making a comeback because people enjoy going to the movies. Still, the movies making this comeback are non-woke titles like John Wick 4, Super Mario Bros., Dungeons & Dragons, Puss in Boots 2, and Creed III. Meanwhile, woke garbage like Shazam 2 and Ant-Man 3 have quickly flamed out.
By all accounts, Air went out of its way to avoid the poison of woke and opened to a respectable $20 million. I’ll catch it on Amazon. Had it gone straight to Amazon, I probably would not have bothered.
To sum up: Theatrical is kind of back, which is good. But, the real reason dropping theatrical titles straight to streaming failed to make these streamers profitable was the lack of attractive content beyond those two hours.
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