TV Industry Balances Box-Office Releases and Streaming

After over a year of delays, the ninth installment of the Fast and Furious franchise, F9, is finally cruising onto the big screen June 25—and unlike many other films released during the pandemic, there is no option to stream it at home. The film’s anticipated theatrical-only release will unofficially kick off a busy movie season as studios look to resuscitate box-office revenues. But priorities have changed considerably in a year’s time. Companies that found success boosting streaming services’ subscriber numbers with would-be theatrical releases are considering how to balance their flow of films to feed the box-office beast while still servicing their growing streaming fans. “They want to use any combination they can to make sure that all of their different profit engines are being oiled,” said Geetha Ranganathan, senior media analyst at Bloomberg Intelligence. “They don’t want to let go of momentum on the streaming side, but they also want to make sure they’re not totally missing out on consumers that would watch exclusively in theaters.” Disney and ViacomCBS are going through a title-by-title decision-making process to put some films only in theaters, others straight to streaming and some titles in both places through a so-called "premier access" model. WarnerMedia opted to make Warner Bros.’ entire 2021 film slate available simultaneously in theaters and on streamer HBO Max, but the company said it will walk back that strategy next year. The decisions about where to send upcoming films often reflect the priority of the companies in question. Boosting streaming subscriber figures, a key metric among investors, has unsurprisingly been a major priority. Decisions about films’ release locations also highlight the expected audience for titles. Kid-oriented movies and family-friendly films receive day-and-date releases, as children under 12 still do not have access to vaccination doses. Young adult-centered titles and potential blockbusters are debuting exclusively in theaters since millennial and Gen Z viewers are more comfortable returning to theaters. Mid-size films and niche releases that may not get droves of viewers to theaters are prime straight-to-streaming candidates. “It’s a little bit of a chicken-and-the-egg scenario,” said Steve Nason, senior analyst at research firm Parks Associates. “The issue with the movie theater business is that there haven’t been to this point, for the most part, big enough titles to draw people out.” Coming Soon: Movie Audiences Morning Consult surveyed U.S. adults about returning to movie theaters. Here's what they had to say: About half of U.S. adults are comfortable returning to movie theaters, including 59% of Gen Z, 57% of millennials, 51% of Gen X and 41% of boomers. Fifty-five percent of adults say they are excited to head back to the movies.About two in five adults say they would feel comfortable returning to movie theaters in the next month. That's more than twice the amount of adults who say it will be at least six months before they return to cinemas. In-home entertainment is still strong, with 52% of U.S. consumers saying they stream movies at least once a week and 61% of adults saying they stream TV shows at least once a week. That’s beginning to change. A Quiet Place Part II, which debuted exclusively in theaters in May and will be available on Paramount+ 45 days after its release, cleared $100 million at the domestic box office in the second week of June, the first movie to do so since early 2020. “We believe in the power of theatrical releases, and we have faith that after things get back to normal, audiences will enthusiastically return to theaters,” Jim Gianopulos, chairman and CEO, Paramount Pictures, said earlier this year. “At the same time, consumers have also increasingly embraced streaming as another way to enjoy films.” Box-office estimates have been steadily rising, with Bloomberg Intelligence projecting $4.3 billion in 2021 box-office sales, more than $3 billion of which is expected to come during the second half of the year. While those revenues are enticing, the pandemic-driven practice of offering titles to rent at a premium price point via streaming may offer a wiser financial move. Even if premier access titles don't make as big a splash on streaming as in cinemas, companies can pocket more revenue instead of splitting the winnings with theater operators, Ranganathan said. “It’s a pure profit play,” said Ranganathan. “They don’t necessarily have to have blockbuster sales off the movies digitally because they get to keep everything.” As media companies calculate which titles should go where, streaming services may win more titles than before the pandemic. It’s not just the importance of streaming—it’s also that many consumers have over the past year been primed to wait for new theatrical releases until they’re available on demand. “There will be tons of people that won’t ever go back to theaters, even if they did before,” Nason said.

Streaming & OTT

The Entertainment Industry’s Next Act: Balancing Box-Office Releases and Streaming

Big names help juice subscriber numbers, but theaters remain essential

Kelsey Sutton

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Kelsey Sutton