MPN Podcast: Hollywood Strike Talk; Netflix Expands Its Gaming Ambitions

 
 
On this month’s episode of the Media Play News podcast, hosts Charles Parkman and Charlie Showley conduct an interview with Adam Conover, a representative for the striking actors and writers in negotiations with the Hollywood studios. Conover shares some of the background reasons that led to the strike in the first place. As Charlie and Charles unpack this interview they touch on some of the longer term trends of the industry and how it may be existentially threatened by film and TV production overseas and the exploding popularity of sites such as YouTube and Twitch. While the exact resolution of the strikes is still uncertain, it’s probable the consumer will be saddled with $5 lifts in all of their streaming subscriptions.
 

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Netflix has branched out from a modest gaming library on mobile to two indie games streamed to select TVs and PCs in Canada and the United Kingdom. Charlie is deeply skeptical of the idea of gaming streaming because of his subpar experience with such services. At the same time, companies such as Netflix, Xbox, and Sony are simultaneously building the infrastructure that will support game streaming and perhaps in another five years it won’t be as bad. Until then, Charlie and Charles will keep gaming on their home consoles.

The hosts conclude the show by gushing about Barbie, writing off Oppenheimer, and revisiting, yet again, the Hollywood writers’ and actors’ strike. With Barbie, a movie the hosts expected to be pretty good ended up being incredible with a loud sense of style and terrific performances from its leads. As for Oppenheimer the hosts are down on Christopher Nolan after his previous movie Tenet disappointed.

Actors Reportedly Walked Away From $1 Billion Hike in Pre-Strike Compensation, Benefits Offer

The Alliance of Motion Picture and Television Producers (AMPTP), the negotiating entity representing the Hollywood studios and streamers, including Netflix, reportedly offered SAG-AFTRA, the union representing about 160,000 working actors, more than $1 billion in increased financial compensation and benefits before the strike call last Thursday, July 13.

“The deal that SAG-AFTRA walked away from on July 12 is worth more than $1 billion in wage increases, pension and health contributions and residual increases and includes first-of-their-kind protections over its three-year term, including expressly with respect to AI [artificial intelligence],” read an AMPTP  statement, according to Reuters, which first reported the offer, citing information from AMPTP.

SAG-AFTRA, which reportedly is calling the statement a mischaracterization of the pre-strike negotiations, is seeking  greater compensation for streaming video distribution, among other issues.

The Directors Guild of America (DGA) in June inked a new labor deal with AMPTP that featured a 21% hike in streaming residuals that includes content streaming access to foreign subscribers across Netflix, Disney+ and other major platforms.

SAG-AFTRA is also seeking greater control of actors’ AI images as the technology’s use increases with content production.

Studios already use Generative Artificial Intelligence (GAI) when making actors appear younger or older, or creating realistic images, voiceovers and communication.

For example, in the new three-part Showtime documentary Goliath on the late NBA star Wilt Chamberlain, GAI is used to recreate Chamberlain’s voice-overs from media statements he made.

The technology and practice is increasingly being used by content producers for actors in other situations — an emerging business practice SAG-AFTRA wants to stay on top of.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The DGA labor deal with AMPTP expressly addressed safeguards for directors regarding GAI.

Specifically, the agreement outlines that “duties performed by DGA members must be assigned to a person, and GAI does not constitute a person.”

Content creators/producers are not allowed to use GAI in connection with “creative elements” without consultation with the director or other DGA-covered employees. The labor contract also calls for twice-yearly meetings with the studios to discuss and negotiate the use of GAI.

Streaming a ‘Dagger’ in Heart of Studio Assets

For a solid month, the 2023 projection of new theatrical releases bounced between 501 and 502.  Two weeks ago, the number rose to 510, as the projected number of new theatrical releases for 2023.  

Ralph Tribbey

Last week it was 511 … and this week it is 510. At least it is holding steady.

Ditto for the number of top box office films ($25 million plus; $100 million plus), which held at 64 for the third week in a row.

The Super Mario Bros. Movie (Universal Pictures) continues to roar at the box office with $436 million in domestic ticket sales, which looks right now as an easy climb to the half-billion-dollar mark when all is said and done. The only new candidate for the “top-box” arena is writer-director Lee Cronin’s creep-out horror tale, Evil Dead Rise (Warner Bros.), which pulled in $24.5 during its opening week (it will easily push past the $25 million level).

On the transition front from theatrical venues to the home entertainment packaged-media marketplace, Paramount Home Entertainment’s Dungeons & Dragons: Honor Among Thieves got a lightning-quick move to a May 30 disc release slot — that’s a theatrical-to-home window of just 60 days.

The status for filmmaker James Cameron’s Avatar: The Way of Water remains in limbo.  We’ve speculated — and it is only speculation — that Disney is delaying the release until the latest round of layoffs (industry trades are throwing around 4,000 as the number) have taken place and the dust has settled.  

That aside, it doesn’t help restore the health of the theatrical marketplace when the studio — yes, Walt Disney Studios — takes writer-director David Lowery’s mega-budget film ($150 million-plus) adaptation of the J.M. Barrie classic, Peter Pan & Wendy, and bypasses theaters for Disney+ streaming. To add insult to injury, it was — of course — immediately offered for sale on Blu-ray Disc by one of Mickey Mouse’s “helpers.”  More will certainly follow in the days ahead.

Walt Disney Studios will be reporting earnings on May 10. It will be interesting to see how much red ink is attributed to the current streaming obsession.  

Of note, Universal/Comcast was the first of the season and they are projecting to lose $250 million per month for the balance of the year.   Paramount and Warner Bros. Discovery are back-to-back next week on reporting quarterly earnings.  Last year, these historic “Hollywood” studios averaged $800 million per month in losses attributed to streaming.

How can you possibly justify bypassing theaters for a direct-to-video launch of Peter Pan & Wendy with a production budget north of $150 million?     

Ditto for the $40 million or so production budget associated with director Dexter Fletcher’s Ghosted?  This Apple Studios/Skydance production starring Chris Evans, Ana de Armas and Adrien Brody launched this past week on Apple TV+ and was immediately released on Blu-ray from several “helper”/”void-filler” — polite words for “pirate” — sites.  

Apple TV+ still hasn’t released the Best Picture-winner for 2021, writer/director Sian Heder’s CODA, on DVD, Blu-ray or 4K Ultra HD, but plenty of Apple TV+ “helpers” have gladly stepped up to fill the void.

The industry’s inattentive monitoring of what is happening with their film and series production assets is not limited by any stretch of the imagination to the high-profile theatrical release candidates.  

Amazon Studios, with production partner Morgan Creek, got hit for the mini-series “Dead Ringers” from more than one “helper” on Blu-ray; Hallmark got hit seven times, plus producing partners Larry Levinson Productions and Johnson Production Group got hit for five more (if you are counting, that’s 12 Hallmark films in one week); Netflix got whacked for a half-dozen series; and Paramount’s Scream VI had its first “helper” attack within hours of being streamed on Paramount+.

We could go on about theatrical catalog and all the little “helpers” on that side of the street, but that ship has sailed.  Those vast film libraries that were built from the 1930s to the launch of DVD in 1997 (the cut-off point for theatrical catalog and new theatrical) by the various “Hollywood” studios are now all in the public domain — when you don’t monitor and enforce your copyrights that’s exactly what happens.  

Sure, they still think they have copyright protection, but that’s an illusion that is not supported by the helter-skelter release activity taking place in the DVD marketplace these days.  

To that point, through the first four months of 2023, 3,978 theatrical catalog releases (sound era through 1996) arrived on DVD.  That tracks for a total of 12,000 new product offerings in that category alone for 2023 … the average pre-pandemic count was roughly 1,600 titles per year.

New theatrical launches are stuck in limbo — still nowhere near pre-pandemic levels. Mega-budget films that could change that dynamic go direct to streaming. And priceless studios assets — in the form of theatrical libraries — are sacked at a pace that would make a Visigoth blush.

Streaming has been nothing less than a dagger in the heart of studio assets. When will someone wake up and see the damage that has been done and take steps to correct it?

Ralph Tribbey is the publisher of The DVD & Blu-ray Release Report, a weekly newsletter that tracks physical media. Tribbey began his long career in entertainment in theatrical exhibition and later rose to VP of marketing for MGM Home Video. 

NFL G.O.A.T. Tom Brady Retires Again as Hollywood, Media Careers Beckon

Tampa Bay Buccaneers quarterback and NFL legend Tom Brady in a social media post Feb. 1 officially announced his second retirement from the game after 23 seasons. The announcement comes one year to the day Brady first announced he was stepping away from the game — only to reverse that decision 40 days later.

Brady, the 199th pick in the 2000 NFL draft, would go on to win six Super Bowls with the New England Patriots and one with the Buccaneers. The 45-year-old ends his career as the greatest of all-time (GOAT) leader in NFL passing yards (89,214) and touchdown passes (649).

Brady is transitioning from the gridiron to Hollywood and the broadcast booth. Paramount Pictures Feb. 3 is set to release 80 For Brady, a sports-themed dramedy co-starring Lily Tomlin, Jane Fonda, Rita Moreno and Sally Field as a group octogenarians who have made it their life-long mission to go to the Super Bowl and meet Brady — who stars as himself and co-produced the movie through his 199 Productions company.

Brady has previously appeared on “Saturday Night Live,” “The Simpsons” and “Family Guy” (2005), a season six episode of “Entourage,” and Universal Pictures’ 2015 R-rated comedy Ted 2.

Brady is also set to begin a 10-year, $375 million contract with Fox Sports as a signature NFL game analyst.

DEG International Renews ‘Les VODays’ Showcasing Hollywood Movies in France

The Digital Entertainment Group International (DEGI), and the Syndicat de l’Edition Vidéo Numérique (SEVN), Jan. 16 announced the return of “Les VODays,”’ a week-long marketing campaign to jumpstart digital retail sales of Hollywood and European movies in the French market.

French consumers will be offered a selection of new and classic movies at discounted prices from Universal Pictures Video France, Sony Pictures Entertainment France, SND Films and Warner Bros. Discovery France.

Titles will be available across both digital sellthrough and transactional VOD, allowing consumers to buy or rent movies. The selection of both Hollywood and local movies include Fantastic Beasts: The Crimes of Grindelwald, the “Spider-Man” saga, Jurassic World: Fallen Kingdom and Joyeuse Retraite! 2, among others.

Participating digital platforms include the Apple TV app, CanalVOD, Filmo, Microsoft Movies & TV, VOD from Orange TV, Premiere Max, Prime Video, Rakuten TV, UniversCine and VIVA.

Les VODays” is backed by a nationwide media campaign that includes Facebook, Instagram and Catch-up TV on MyTF1 & 6play, with additional visibility across the ALLOCINE network.

“‘LesVODays’ in 2022 was a bold activation that delivered new and lapsed customers to the French market,” Liz Bales, CEO at DEG International, said in a statement. “The next iteration of the campaign will benefit from the learnings of last year, and will see the 2023 activity designed to highlight the breadth of titles across the digital format as well as the convenience of digital transaction.”

News Analysis: Hollywood’s Indian Strategy — A Star in the Making

Move over, Bollywood. Legacy Hollywood is targeting the world’s second-largest population with low-cost streaming services and original content designed to be consumed on portable devices.

From the recent launch of Lionsgate Play from Starz, which also operates joint venture StarzPlay Arabia, to Disney+ Hotstar, Amazon Prime Video and Netflix, Hollywood is targeting India’s 1.1 billion portable media devices as fertile ground for multi-billion-dollar infrastructure/content investments.

From 2019 through 2020, the SVOD market grew from 23 million subscribers to 57 million subs — and is predicted to reach 200 million subs by 2025, according to Futuresource Consulting.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The top six Indian SVOD providers, including Disney+ Hotstar, Prime Video and Netflix, all boast heavy financial backing, marketing budgets and strong content production capabilities. Overall, there are approximately 30 active SVOD providers competing for the national and regional market share. Part of this mix includes Bollywood, with many local studios also launching their own direct-to-consumer services.

“Consequently, pay-TV operators are ramping up efforts in diversifying their offerings,” said David Sidebottom, principal analyst at Futuresource. “However, the learning curve for those shifting from satellite broadcasting to IP is steep and requires notable investment.”

When Disney acquired 21st Century Fox assets, included in the $71 billion purchase was Hotstar, a streaming platform with an Ace card: Indian Premier League cricket. As a result, India represents 30% of the Disney+ platform’s 95 million subscribers — just 9.5 million less than the service’s U.S. sub base.

“We did see a bump up when the IPL season started,” Disney CFO Christine McCarthy said on the fiscal call. “But we’ve also made it economical for a consumer to sign up for a one-year subscription versus going month-to-month. So those are some of the things that we’re looking at and utilizing to mitigate the churn that one could expect from IPL, but it’s a more diversified offering in terms of programming than just cricket.”

Indeed, the just-launched Star streaming unit within Disney+ and featuring general entertainment is seen as key to the platform reaching 300 million subs globally within three years.

“While North American markets remain critical for most streaming players, it is emerging markets such as India that will drive the next wave of subscriber growth,” Aditya Raghunath, research analyst with T.A. Pai Management Institute, wrote on The Motley Fool.

Netflix in 2019 launched a lower-cost mobile-centric subscription service in India, three years after bowing standard service in the country. The service’s original series, “Delhi Crime,” recently won the International Emmy for Best Drama Series.

“We’ve been growing every year. We’ve been just building our team, developing content, figuring out what works, whether that’s ‘Sacred Games,’ or ‘AK vs. AK,’ you know, just lots of different types of content,” Hastings told Fortune IndiaIndeed, Netflix is targeting India for much of its next 100 million subscriber growth.

“If you play very safe, you’re not doing justice to your audiences who deserve new storytelling,” said Monika Shergill, VP of content for Netflix India.

Amazon, which of course eyes India for its e-commerce potential, also offers Prime Video as a standalone service priced from $1.79 per month. Subscribers have access to ad-free content in myriad languages Prime Video lets users stream ad-free content in HD and 4K (at no additional cost) across various languages. The service also offers access to Prime Music, Prime Reading, Prime Delivery and Amazon Pay Credit Card, among other services.

“The number of hours Prime Video is watched in India in the last two years has grown by six times,” Amazon founder/CEO Jeff Bezos told an Indian media event in 2019. “Prime Video is working well all over the world, and there is no place it is doing better than in India. It’s incredible.”

Nielsen to Track Content Diversity in Hollywood

Nielsen Feb. 17 announced it is partnering with entertainment metadata tracker Gracenote to record visibility into the gender, race, ethnicity and sexual orientation of talent appearing in TV programming and the audiences watching it. Dubbed Gracenote Inclusion Analytics, the new software aims to give content creators, owners, distributors and advertisers data around on-screen diversity and representation to enable more inclusive content. Future enhancements will expand product coverage to include theatrical movies as well as behind-the-camera talent including directors, producers, writers and other key roles.

Nielsen said the information will enable distributors to highlight content within their catalogs featuring diverse female leads for Women’s History Month or fuel recommendations connecting audiences of diverse content. A studio could evaluate whether its content meets diversity, equity and inclusion benchmarks — highlighting programs for licensing opportunities. Similarly, a brand could identify and target the most inclusive content to inform its ad investment or product placement decisions.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“The entertainment industry has a massive challenge ahead — to ensure the talent associated with popular TV programming mirrors today’s increasingly diverse viewing audiences,” Sandra Sims-Williams, SVP of diversity, equity and inclusion at Nielsen, said in a statement. “By democratizing information around representation in content, Gracenote Inclusion Analytics holds the power to push the industry toward better balance and a more equitable future.”

According to a recent Nielsen report, women make up 52% of the U.S. population but comprise only 38% of top recurring cast in popular broadcast, cable and streaming programming. At the same time, people of color account for 40% of the broader population, but are present in only 27% of top TV roles. These data points highlight significant imbalances between representation in content and key audience groups which, by addressing, would serve to accelerate equity in entertainment.

The new industry tracker combines Gracenote’s video program metadata and ethnicity data with Nielsen television ratings and SVOD content ratings. Based on these inputs, the software delivers proprietary metrics assessing the degree to which different identity groups are featured in programming and how evenly this reflects viewing audiences. These include:

  • Share of Screen quantifying an identity group’s (e.g., women, LGBTQ, Black) representation among the top recurring talent
  • Inclusion Opportunity Index comparing share of screen for an identity group (e.g., women) to their representation in population estimates
  • Inclusion Audience Index comparing share of screen for a group to their representation in the program’s viewing audience

 

“Audiences today actively seek out programs that highlight people who resemble them and experiences that reflect their own,” said Tina Wilson, head of analytics at Nielsen. “Under these circumstances, it’s critical that the entertainment industry create authentic content which resonates with underrepresented groups. Together, Nielsen and Gracenote are uniquely positioned to help the industry seize upon this opportunity by way of new data analytics solutions ensuring meaningful connections between content and audiences.”

 

Looking Ahead: Home Entertainment Executives Eye 2021, Say PVOD Is Here to Stay

After a year in which COVID-19 upended Hollywood, 2021 looms as one big question mark for home entertainment executives.

The pandemic accelerated the growth of streaming and made premium video-on-demand (PVOD) an economic and logistic necessity due to the closure of movie theaters. And despite the lack of fresh theatrical product, the transactional end of the home entertainment business flourished.

In 2020, films that would have been major theatrical releases — including Disney’s live-action Mulan, Universal/DreamWorks Animation’s Trolls World Tour and Warner Bros. Scoob! — hit PVOD first before moving on to other windows. Studios made the most of captive home audiences by seamlessly transitioning from PVOD to TVOD, and at the same time dug into their vaults and came up with creative ways to market catalog titles.

“COVID didn’t introduce new trends to entertainment, but it did accelerate what was already happening,” observes Jim Wuthrich, president of Warner Bros. Home Entertainment.

With a vaccine rollout underway, the big question is whether things will return to normal — or whether the changes have been so pronounced, so significant, that Hollywood will never return to its old ways. Whichever way the wind blows, industry executives say, the strides made by PVOD are unlikely to be reversed even once most of the country has been vaccinated and it is safe for theaters everywhere to reopen.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“COVID was clearly an accelerant to move more entertainment consumption to the home,” says Galen Smith, CEO of Redbox. “Event films will still be big theatrically, but there will be a push to accelerate consumers’ abilities to watch at home through PVOD and shorter overall windows — both digitally and on disc.”

Galen Smith

He adds, “We don’t believe the theatrical model will return exactly as it existed prior to COVID. The evolution over the last year benefited consumers and content creators through the introduction of new products — and a number of them, like PVOD, are here to stay. PVOD has been a model the studios have wanted to add for many years, and I expect to see more PVOD releases in 2021.  It’s another way to provide customers choice, which is good for them as well as for the industry.”

Dametra Johnson-Marletti, corporate VP of Microsoft Digital Stores Category Management, agrees. “I think many consumers will be excited to return to the theaters when the COVID risk is nearer to zero,” she says. “That said, I also think that PVOD is here to stay, particularly for titles that are not forecasted to be box office blockbusters, and for a certain segment of viewers.”

The mantra for home entertainment executives, then, is to keep their fingers on the pulse of the industry, and on the consumer, and be prepared for more changes as well as more uncertainty.

Bob Buchi

“What we saw in 2020 was an anomaly, but it also demonstrated our ability to pivot and continue to monetize our content through the distribution strategies and platforms that are available to us and that make the most sense,” says Bob Buchi, president of worldwide home entertainment for Paramount Pictures. “All of these options — including traditional theatrical distribution — will continue to co-exist in a post-pandemic world.

“I feel strongly that we need to stop framing things as ‘normal,’ whether that’s ‘back to normal’ or ‘a new normal’,” adds Amy Jo Smith, president and CEO of DEG: The Digital Entertainment Group. “Our business is currently in an accelerated state of evolution, as the pandemic created the perfect environment for overdue experimentation with distribution models. Many studios are working within this unique opportunity to offer consumers new ways to consume content at earlier points in its lifecycle, and consumers have embraced the change. There is no replacement for the experience of seeing a movie in a state-of-the-art theater, but we expect content owners will continue to meet entertainment lovers wherever it is that they choose to consume new content.”

Amy Jo Smith

Similarly, streaming is likely to enjoy continued high growth rates. “Recent research from the NPD Group shows that the average U.S. consumer now relies on seven different streaming video services, up from five in April,” says the DEG’s Amy Jo Smith. “This is another case of the pandemic accelerating a trend that was already underway. It’s great that consumers have so many streaming options at different price points and offering different content. It’s the belief of DEG’s D2C Alliance Steering Committee that as consumers continue to customize their entertainment experience subscription and ad-supported services will continue robust growth, as will large, mainstream services and those that offer more specialized content.”

The transactional end of the business is perhaps the most fluid as 2020 gives way to 2021. Against all odds, the business didn’t collapse when the theatrical business did. But that doesn’t mean there weren’t some dicey moments — nor will it be all smooth sailing ahead.

Dametra Johnson-Marletti

“The Microsoft Movies & TV transactional service thrives mostly on new blockbuster content,” Johnson-Marletti says. “With new production shuttered for much of the year, and top content releases pushed to 2021, our TVOD business certainly felt some headwinds. Our team had to become very creative and scrappy as they worked with our studio partners to find unique avenues for growth. We had a multi-part strategy that included shifting more focus to our catalog by bringing forward a lot of the fan favorite and classics for consumers to find more easily. We also focused on building great thematic and seasonal collections.

“Given the current state of the pandemic-related shutdown, and the related outlook through the first two quarters of calendar year 2021, I think we will likely expect much of the same, with some positive light starting to emerge in the late April to early May timeframe. The pervasiveness of vaccine adoption, the openness of the world (as it pertains to theaters), and new windows and rollouts will all be key inputs to how the back half of 2021 plays out.

“I definitely think the approach [we took in 2020] represents a viable set of tactics that will continue to serve our customers, partners and business well in the new year.”

With the continued erosion of disc sales in 2020 — at the nine-month mark, combined consumer spending on Blu-ray Discs and DVDs was down nearly 23% from the prior year, to a new low of $1.8 billion — digital retailers will likely continue to stress the collectibility of digital movie sales, as they did with catalog product during 2020.

“It may not be widely known or understood, but in many ways digital movie collections offer a level of security, portability, and confidence that discs cannot,” Johnson-Marletti says. “Your entire library can be accessed from almost any device, it travels with you seamlessly, and you never have to worry about damaged or lost discs. To the purest of collectors, the absence of tangible boxes may not fully satisfy, but, again, there are many benefits that outweigh the cardboard. Lowering the cost of entry and creating compelling promotions and offers that inspire first-time adoption could be a way to spur greater digital movie sales.”

Despite the emergence of PVOD and continued growth in streaming, some observers expect theaters to stage a dramatic comeback once most of the country has been vaccinated.

“As [Paramount studio chief] Jim Gianopulos pointed out in November, when theaters re-opened in Japan and China, audiences returned en masse, driving huge box office returns for films that were available,” Paramount’s Bob Buchi says. “Clearly, windows and consumer behaviors are shifting, but the theatrical experience will endure.”

Even so, Buchi says, “each film and situation is unique.  For some films, like Top Gun: Maverick and A Quiet Place Part II, the theatrical model is optimal.  On the other hand, we found tremendous success with PVOD for Love and Monsters and Spell. Some films make sense for subscription streaming services.  It is not one-size-fits-all and every film needs to be evaluated individually.”

Ultimately, he adds, “we will continue to explore new distribution models and opportunities to bring our content to audiences wherever and however they want to enjoy it.”

Jim Wuthrich

Warner’s Wuthrich agrees. “Consumer empowerment is good for the industry and our goal is to meet the fans where they are — theaters, OTT, digital, physical,” he says. “While fans may have a preferred channel, they often participate in many, such as going to the theater, subscribing to HBOMax and picking up the Blu-ray. The multichannel experience could be one movie or across different movies, depending on interest.

“One thing is certain: If we are successful in creating compelling stories, fans will continue to show up.”

Homebound: Home Entertainment Takes Center Stage as Consumers Practice Social Isolation

Never before has home entertainment played such a crucial role in the industry.

With live events such as sports and concerts canceled, movie theaters closed, and other activities outside the home scrubbed, the COVID-19 pandemic has thrust home viewing into the spotlight as consumers across the globe honor stay-at-home orders.

After years of aborted experiments, premium VOD is finally having its moment as studios rush ‘A’-list films into the home market, hurrying titles to digital to follow the audience.
Streaming services and other digital retailers are rolling out promotions to entice captive consumers — and are experiencing an explosion in viewership growth.

Meanwhile, studios are taking a big hit as theatrical revenue dries up. Observers say the growth in home viewing will only make up a fraction of the lost revenue from movie theater exhibition.

The theatrical pipeline, an important source of new content for home entertainment, has slowed to a trickle as studios shut down productions and postpone or scrap release plans for feature films and series. Warner Bros. postponed the theatrical release of perhaps its biggest title of the year, Wonder Woman 1984, to Aug. 14 from June 5.

Other delayed big Hollywood movies include the latest James Bond film, No Time to Die, postponed until November from its original April theatrical date; the Walt Disney Co.’s live-action Mulan, moved from March 27 to July 24, Black Widow, to Nov. 6, The Eternals, to Feb. 12, 2021, and Jungle Cruise, a full year to July 30, 2021; Universal Pictures’ latest “Fast and Furious” film, F9, moved from May 2020 to April 2021; and the Paramount Pictures horror sequel A Quiet Place: Part II, similarly postponed from its previous March 20 theatrical due date.

Such original digital series as the Netflix comedy “Grace and Frankie” and Marvel’s “The Falcon and the Winter Soldier” on Disney+ will likely debut later than expected due to production halts.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Fast-Tracked to Digital

As theaters began to shutter, studios filled the void with early digital releases for the growing home audience. Disney March 13 announced it would bring its animated mega-hit Frozen II to Disney+ March 15, three months ahead of schedule.

“We are pleased to be able to share this heartwarming story early with our Disney+ subscribers to enjoy at home on any device,” said Bob Chapek, the former Disney home entertainment chief who recently was elevated to CEO of the Walt Disney Co.

The studio later offered Pixar’s animated Onward, which had just premiered in theaters March 6, for early digital purchase March 20, with the film hitting Disney+ April 3, and canceled the planned May 29 theatrical release of Artemis Fowl, directed by Kenneth Branagh, instead signaling it would debut the film on the Disney+ streaming service at some point.

Universal Pictures March 16 announced it would release its current theatrical slate into home entertainment distribution channels. Movies included The Invisible Man, The Hunt and Emma, among others. Universal also called off the theatrical release of the DreamWorks Animation sequel Trolls World Tour and instead released the film through video-on-demand April 10. Titles were offered on digital channels for a 48-hour rental period at $19.99 each.

“We wanted to provide an option for people to view these titles in the home that is both accessible and affordable,” NBCUniversal CEO Jeff Shell said.

Warner subsequently announced the early digital purchase availability of Birds of Prey and the Fantaulous Emancipation of One Harley Quinn (March 24), the Ben Affleck starrer The Way Back (also March 24), and Impractical Jokers: The Movie (April 1) at $19.99.

“With audiences largely unable to view films in theatrical release under current circumstances, we have decided to provide the alternative of early digital ownership of our currently released titles to people looking for great entertainment options,” said Toby Emmerich, chairman of Warner Bros. Pictures Group. “So, while we remain big fans of the theatrical experience and hope audiences are able to return to cinemas in the near future, we understand that these are challenging times, and offering this option simply makes sense.”

Paramount Pictures, meanwhile, scrapped the April 3 theatrical release of The Lovebirds and offloaded it to SVOD service Netflix, and the studio fast-tracked theatrical release Sonic the Hedgehog for digital purchase starting March 31.

The studio also looked to non-new theatrical content to fill the pipeline.

“We are working creatively to ensure that there is a constant flow of fresh content for both consumers and retailers to fill the theatrical void,” said Bob Buchi, president of worldwide home entertainment at Paramount Pictures. “Fortunately, we have a robust schedule of television content from CBS, Showtime, Nickelodeon and Paramount; new theatrical releases from Saban; plus a wealth of catalog initiatives, including our new
Paramount Presents line.”

Sony Pictures, too, pushed a theatrical release — Bloodshot — into the digital market early, less than two weeks after its theatrical debut, though the studio said it wasn’t a long-term change in strategy.

“Due to the unique situation where Bloodshot became inaccessible as a result of theater closures nationwide, the film was made available for digital purchase on March 24, 2020,” read a Sony statement. “Sony Pictures remains committed to traditional theatrical windows.”

Lionsgate rushed I Still Believe, about Christian music star Jeremy Camp, to premium VOD March 27. The film opened March 12 in theaters.

“We’re enormously proud of the movie that the Erwin Brothers created and are grateful to be able to share it with audiences for their home viewing pleasure,” said Joe Drake, chairman of Lionsgate Motion Picture Group.

It’s not just the big studios that shifted release plans.

Independent supplier Mill Creek Entertainment adjusted its schedule as well.

“We are having to make some adjustments to release dates, particularly where interviews, commentaries and other special features were in the process of being produced,” said Barrett Evans, Mill Creek VP of marketing and product development. “Other titles are getting early digital releases to maximize the potential sellthrough in light of reduced store traffic.”

He noted disc sales have increased at mass merchants and other retailers deemed “essential businesses,” especially with Mill Creek’s complete-series television releases and value-priced multi-feature collections.

While there have been some hiccups in disc manufacturing, Paramount, too, has seen continued physical business.

“Although store closures and supply chain challenges have hampered physical opportunities around the world, we continue to see demand for both rental and sellthrough of discs and are committed to servicing those consumers,” Buchi said.

Redbox, its rental kiosks conveniently placed in grocery stores and other high-traffic retailers during the pandemic, told customers via a statement that employees and retailers were cleaning the kiosks regularly and emphasized social distancing advantages.

“Our automated kiosks, by their very nature, eliminate the need for customers to interact with store personnel ‘behind the counter,’” read the statement. “Of course, customers can further minimize time and interaction at our kiosks by renting and reserving their DVD in advance online, or via our app, and then simply ‘pick up and go’ at their favorite retailer. And we have fast tracked the deployment of ‘contactless’ technology at tens of thousands of our locations, so customers can securely pay with a quick ‘tap,’ rather than swiping or using a chip reader.”

Like others, Redbox also pushed its digital options, including its just-launched Redbox Free Live TV.

“Those who would prefer to stream movies from home can also choose Redbox On Demand, where we have a fantastic selection of new-release movies for rental and purchase,” the statement read. “More than 30 channels are also available to stream for free, instantly on your Smart TV or favorite device.”

Follow us on Instagram

Marketing Goes Digital

Indeed, the industry at large turned to marketing digital.

Mill Creek began to aggressively promote its TVOD service movieSpree.com, Evans said, and offered sales on kidvid titles to help stay-at-home parents entertain the little ones.

Other digital retailers, too, rolled out promotions to draw the at-home viewer. FandangoNow touted the embarrassment of theatrical-grade early release riches and offered 20% discounts to first-time users.

“During this stressful time, when most of us cannot attend our beloved local theaters, Hollywood is bringing current movies to the comfort of our homes,” said Fandango managing editor Erik Davis.

The service also mounted promotions for Sonic the Hedgehog (offering an eight-minute clip and family activity sheets) and Trolls World Tour (with discounts on other DreamWorks titles with rental preorder).

Notably, fast-tracked Universal release The Invisible Man topped FandangoNow’s charts as soon as it hit digital.

“As fans continue to look for new content to watch at home, FandangoNow has experienced its biggest weekend ever,” FandangoNow head Cameron Douglas said March 23. “Our top sellers consisted of movies right out of the theaters, as well as other digital releases not yet available on subscription services.”

Also highlighting the early availability of top theatrical titles, Amazon March 22 announced via email the launch of Prime Video|Cinema, a new online hub where “you can watch the latest movies just released in theaters — without leaving home.” The launch featured Disney’s Onward available to buy for $19.99, with Universal’s The Invisible Man, The Hunt and Emma available to rent at the same price.

Walmart’s Vudu digital storefront similarly clustered early access movies under a “Theater at Home” banner.

Digital library service Movies Anywhere rolled out a beta of Screen Pass, which allows consumers to share titles in their collection with friends and family.

The studios, too, put an increased focus on marketing in the digital realm.

“With consumers restricted to their homes, the industry is seeing a significant increase in digital transactional consumption, and we are striving to meet that demand by working closely with digital retailers to offer and promote titles and curated collections at appropriate prices,” said Paramount’s Buchi.

With FandangoNow, Paramount hosted a Sonic “watch party” featuring a live Twitter commentary from the film’s stars, Ben Schwartz (Sonic) and Lee Majdoub (Agent Stone), along with the film’s director, Jeff Fowler.

Warner Bros. has similarly “been working with online media outlets, fan sites and portals to come up with novel and unique ways to entertain people who are passing time at home for the foreseeable future,” stated the studio. “To date, several online ‘watch parties’ have taken place with filmmakers and talent interacting with fans via Skype or Twitter as audiences watch films together in real time, including Birds of Prey with comicbook.com, which featured director Cathy Yan, Jurnee Smollet-Bell, Ella Jay Basco and DC Comics writer Gail Simone; a DC Daily Birds of Prey watch party hosted by the site’s talent; and a Shazam! watch party on comicbook.com which featured director David F. Sandberg and Asher Angel and Jack Dylan Grazer from the film.”

Several other screenings of both new-release and catalog films are currently in development, according to the studio.

Free for All

With an expanded at-home audience — some perhaps venturing into digital entertainment for the first time or expanding their digital repertoire — many online services showered the market with free or discounted content to whet the appetite.

As part of its #StayHomeBoxOffice coronavirus campaign, HBO announced it would stream multiple series, documentaries and movies for free on HBO Now and HBO Go beginning April 3.

Apple TV Channels extended to 30 days free trials to ViacomCBS’s Showtime OTT and MGM-owned Epix (through May 2 with no subscription required), AMC Networks’ Acorn TV and Lifetime Movie Channel, among other channels.

Amazon Prime Video began offering select children’s and family-themed entertainment free to anyone with a free Amazon — not Prime — account.

As part of Dish Network’s pandemic-related “Stay in & Sling” initiative, Sling TV launched several free promotions for news and other content and services.

“With social distancing recommendations extended nationally, we are working find new ways to help serve the public as it continues to shelter in place,” said Warren Schlichting, group president of Sling TV.

Actor Patrick Stewart, star of the CBS All Access series “Star Trek: Picard,” took to Twitter March 24 to announce that fans can enjoy a free month of the SVOD service as they shelter in place. CBS All Access offered a month-long subscription to anyone in the United States through April 23 with the code GIFT.
Comcast March 25 announced that it had made the VOD catalogs from a series of premium networks and SVOD services available to its Xfinity X1 and Flex customers for free for 30 days.

AT&T March 26 announced it would offer DirecTV, U-Verse, AT&T TV and AT&T TV Now subscribers free access to HBO, Starz, Cinemax and Epix into April.

Roku on March 28 announced its streaming media devices would highlight free content on The Roku Channel, via email newsletters and social media through a “Home Together” campaign.

Gold Rush or Fool’s Gold

As the pandemic spread and stay-at-home orders proliferated, research firms and analysts gathered data and opined on the spike in home entertainment consumption.

The vast majority of U.S. respondents to a March TV Time survey said they planned to increase TV content consumption during the crisis. The survey, fielded to 3,126 U.S. users of the TV Time App March 13-15, found among those planning to stay home/isolate or who were considering it (91%), 84% said they intended to increase their TV consumption during this period.
“Streaming services are poised to be among the biggest beneficiaries to capture consumers’ viewership and engagement,” the TV Time report concluded.

Conviva analyzed global streaming data from a 21-day period between March 3 and March 23, comparing the last week with the first two. Streaming skyrocketed on a global scale, increasing more than 20% compared with the previous two-week period, with North America streaming up nearly 27%.

Percentage viewership of VOD apps jumped double digits in a Vizio survey comparing two weekends in March, as more consumers began to stay home due to the coronavirus crisis.

Viewership of ad-supported VOD apps jumped 19% while overall viewership of TV apps grew 9% from the weekend of March 7-8 to the weekend of March 14-15, according to a survey of 9.6 million Vizio SmartCast users. Meanwhile, research firm Inscape found both streaming viewers (OTT) and linear viewers watched 10% more content overall in its survey of 14 million opt-in TVs comparing the same time periods.

Comscore found average in-home data use jumped 18% in early March compared with the previous-year period. OTT streaming significantly increased across connected TVs and streaming boxes/sticks amid the COVID-19 pandemic, according to the research firm. In comparing OTT streaming behavior March 1-16 in 2019 to the same period in 2020, Comscore found notable year-over-year growth in both the number of households and time spent with OTT content on both connected TVs and streaming boxes/sticks. Streaming hours grew 24% on connected TVs and 16% on streaming boxes/sticks.

Streaming services such as Netflix and Disney+ curtailed streaming quality so as not to overload infrastructure.

Strategy Analytics forecast global streaming video subscriptions would increase by 5% in 2020, projecting 949 million paid subscriptions globally by the end of 2020, an increase of 47 million from earlier forecasts.

“One significant factor affecting future SVOD growth is the impact of the coronavirus in both the short and long term,” said Michael Goodman, director of TV & Media Strategies. “In the near term the coronavirus will actually boost SVOD subscriptions, as well as viewing of these services, as an ever-growing number of consumers adopt social distancing or are forced into quarantine.”

Goodman said long-term effects of the virus on SVOD depend on the length of the pandemic and resulting economic damage. As businesses shut down and individuals are laid off, consumers will alter how they spend money on essential and non-essential services.

Indeed, many pundits acknowledged home entertainment viewing was experiencing a surge.

“Yes, they will see increased usage in home entertainment distribution,” Michael Pachter, media analyst with Wedbush Securities, said of the early digital releases, but he questioned long-term profitability.

He said kiosk disc rental/digital service company Redbox “definitely benefits” in the short term.

Richard Greenfield, media analyst with Lightshed Partners, said the elimination of live sports on TV makes SVOD a valuable alternative.

“To the extent consumers are increasingly working from home and refraining from out-of-home activities, without sports to watch on TV, we suspect streaming services such as Netflix will see increased subscriber additions and higher utilization per account (leading to higher ARPU plans that enable more users per household and lower churn),” Greenfield wrote in a March 12 note.

Analyst Laura Martin with Needham, one of the first Wall Street pundits to predict a home entertainment surge as a result of the pandemic, cautioned that with the pandemic exploding in Europe, international Netflix subscriber growth will stall.

“In distressed times, people will give up their Netflix subscriptions,” Martin wrote in a note.

Greenfield disagreed.

“Netflix appears incredibly well-positioned to entertain consumers as [other] entertainment options dry up, especially if more movie theaters close globally,” he wrote.

Studios, Industry Under Pressure

While the growth in home entertainment was a bright spot as the pandemic grew, the entertainment industry at large took major hits. Numerous industry events, including the National Association of Broadcasters show scheduled for Las Vegas in April, were canceled.

The studios warned of leaner times. Comcast, which owns NBCUniversal, and the Walt Disney Co. had to close their respective amusement parks and warned Wall Street of losses
ahead. NBC noted it would suffer the loss of Olympic coverage this summer as the games were postponed to 2021.

The Walt Disney Co. April 3 announced it would start furloughing non-essential U.S. employees April 19.

“With no clear indication of when we can restart our businesses, we’re forced to make the difficult decision to take the next step and furlough employees whose jobs aren’t necessary at this time,” a Disney representative said in a statement.

Disney also announced that executive chairman Bob Iger, who earlier this year stepped down as CEO, would forgo his entire salary, and that Iger’s successor as CEO, Bob Chapek, would have his salary cut in half.

Industry heavyweights set up relief funds for those displaced.

Netflix March 20 disclosed the creation of a $100 million relief fund for people in the entertainment business waylaid by the epidemic. CCO Ted Sarandos, in a blog post, said $15 million would go to third parties and nonprofits providing emergency relief to out-of-work crew, cast, electricians, carpenters and drivers  — many of whom are paid hourly wages and work on a project-to-project basis — in the countries where Netflix has large production facilities.

“This community has supported Netflix through the good times, and we want to help them through these hard times,” Sarandos wrote.

He said most of the money would go toward support for the hardest-hit workers on its own productions. This was in addition to the two week’s pay Netflix had already committed to the crew and cast on productions forced into suspension.

Netflix also announced the donation of $1 million each to the SAG-AFTRA COVID-19 Disaster Fund, the Motion Picture and Television Fund and the Actors Fund Emergency Assistance in the U.S., and $1 million split between the AFC and Fondation des Artistes.

NBCUniversal announced the creation of a $150 million fund for employees, production personnel and amusement staff impacted by the coronavirus pandemic. The announcement by CEO Jeff Shell included the news he had been diagnosed with the coronavirus.

WarnerMedia set up a $100 million fund to assist production workers and others idled by the shutdown in Hollywood.

The National Association of Theatre Owners (NATO) pledged $1 million to a fund to assist laid-off theater workers and decried the fast-tracked move to home entertainment. NATO on March 17 issued a statement blasting the practice of early digital release, citing “speculation in the media that the temporary closure of theaters will lead to accelerated or exclusive releases of theatrical titles to home streaming.”

“Such speculation ignores the underlying financial logic of studio investment in theatrical titles,” the NATO statement read. “To avoid catastrophic losses to the studios, these titles must have the fullest possible theatrical release around the world.

“While one or two releases may forgo theatrical release, it is our understanding from discussions with distributors that the vast majority of deferred releases will be rescheduled for theatrical release as life returns to normal.”

Before life returns to normal, though, it’s clear the focus of entertainment will be in the home — and as a result home entertainment may be a bigger part of the industry’s future after the pandemic subsides.

Honoring Eddie — and Hollywood

Eddie Cunningham, in the spirit of Teddy Roosevelt, speaks softly and carries a big stick.

Honored with Media Play News’ third annual Fast Toward Award, Cunningham is the consummate gentleman, both inside and outside of the workplace. Without exception, his employees say he’s a remarkable boss, even-tempered and empowering, encouraging them to do their best and making them want to do their best.

He’s instilled in them a belief that what they do each day in the office truly matters, that they are an essential cog in the wheel, so to speak. Leading by example, you get the feeling that Eddie Cunningham truly loves our industry as well as his company, and that loyalty and reliability are two of his most important traits.

The last time we met for lunch, at the Grill on the Universal Studios lot, he brought a bag of toys for my year-old granddaughter.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

A while back, at CES, we happened to share an elevator. Eddie Cunningham was the last person out, holding the door for nearly a dozen other people.

Now that he’s been tapped to lead a joint venture between Universal Pictures and Warner Bros. that, pending regulatory approval, will market and distribute Blu-ray Discs, DVDs and 4K Ultra HD discs in the United States and Canada from both studios, beginning in early 2021, Cunningham also is leading the charge to ensure the continued viability, and profitability, of the physical disc.

It’s a big opportunity, and a big challenge, as well. Disc sales have been declining, and with the whole world so enamored with streaming, we as an industry need to do what we can to prop up the transactional business – which despite impressive growth rates on the digital side remains tethered to physical media.

Follow us on Twitter!

As Cunningham says in this month’s feature, “Discs, alongside electronic sellthrough, are usually the first opportunity to own a film after its run in theaters, with the movie often not being available on SVOD for years. [And] if you want the highest quality picture and sound, disc is still the best way to get that in the home.”

The physical disc is not only the primary into-the-home distribution mechanism for new movies fresh off their theatrical runs. It also remains the best way to preserve, honor and capitalize on Hollywood’s rich cinematic history.

The proliferating streaming services are so focused on original content that older films are hard to find. The theatrical catalog titles we used to enjoy, and which formed the basis for DVD collecting two decades ago, are pretty much out of everyone’s consciousness.

I know from my own experience that whereas in the past I would regularly watch an old classic or two each week, for the last few years I have been so consumed by Netflix series such as “Ozark,” “Orange is the New Black” and “House of Cards” that I didn’t have time for much more than the latest theatrical hit.

Follow us on Instagram!

Only since my holiday from streaming began last December have I been watching old movies again on Blu-ray Disc.

That’s why I applaud Paramount Home Entertainment’s launch of a new “Paramount Presents” label to recognize and celebrate films from the studio’s library. As division president Bob Buchi said, “Paramount’s library represents over a century of filmmaking and includes some of the greatest films in cinematic history. We look forward to opening the vault and sharing some of our most treasured films with fans.”