Premium Digital Release Strategy Now a Tale of Two Studios

NEWS ANALYSIS — In 2020, the pandemic created an opening for a new distribution strategy — premium (i.e. higher priced) digital release — but in 2022, as the pandemic subsided, the strategy became isolated to two major studios: Warner Bros. and Universal Pictures.

Among the top 20 domestic box office earners for 2022 (through Dec. 13), only Warner and Universal titles have had a premium digital release, mostly for both premium digital rental (around $20) and sale (around $25-$30).

For Warner, those releases included The Batman (available April 18 for premium digital rental and sale), Black Adam (available Nov. 22 for premium digital rental and sale), Elvis (available Aug. 9 for premium digital rental and sale), Fantastic Beasts: The Secrets of Dumbledore (available May 30 for premium digital rental and sale) and DC League of Super-Pets (available Aug. 23 for premium digital rental and sale).

Warner title windows from theatrical release to premium digital ranged from less than 30 days for DC League of Super-Pets and 32 days for Black Adam to 46 days for Elvis.

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For Universal, premium digital releases included Jurassic World Dominion (available July 15 for premium digital rental and sale), Minions: The Rise of Gru (available Aug. 2 for premium digital rental and sale), Nope (available Aug. 26 for premium digital rental) and The Bad Guys (available in early May for premium digital rental and sale). Universal title windows ranged from less than 30 days for Bad Guys and 32 for Gru to 35 for both Dominion and Nope.

The moves by each studio seem to result from an overall strategy coming from the top.

Warner Bros. Discovery CEO David Zaslav has made no secret of his dislike of the accelerated streaming window strategy and his intent to maximize studio revenue.

“Subscribers today are like clicks in the 1990s,” he said in November. “We want real subs that are going to pay real money. We’re not collapsing businesses because we are a diverse company. Optionality and the ability to move content around [different distribution channels] is one of the greatest opportunities of this company.”

On a recent earnings call, Comcast CFO Mike Cavanagh noted that NBCUniversal had a strong third quarter for studio releases. In a nod to the digital release strategy, he noted the benefit of the “acceleration in film windows.”

Meanwhile, Disney, Paramount and Sony, which have eschewed premium digital release for top titles, have leaned toward boosting streaming — Disney and Paramount on their own services and Sony (via a new deal) on Netflix. At least that’s how it stands for now. Whether those studios will continue to favor streaming services is an open question as Disney has changed CEOs (from Bob Chapek to Bob Iger) and late-to-the-game Paramount (with Paramount+) begins to face a mature streaming environment.

For now, premium digital release is a tale of just two studios — at least for top box office hits.

As for the independent studio marketplace, the premium release strategy is a mystery. Certain companies, such as A24 with The Inspection, are experimenting with the release strategy. But then again, A24’s Aftersun came out directly for regular (not premium) digital purchase.

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