NEWS ANALYSIS — Following the 80% drop at the domestic weekend box office for Disney/Marvel Studios’ Black Widow, which saw Warner Bros.’ Looney Tunes sequel Space Jam: A New Legacy, featuring NBA superstar LeBron James, finish No. 1 in ticket sales, one interested party is blaming Disney+ and PVOD.
The National Association of Theatre Owners (NATO) has long been a champion of the theatrical window — the 90-day exclusive period enriching exhibitors and studios while laying the groundwork for secondary distribution channels such as packaged media retail, digital and pay-TV.
Disney, via Marvel superhero movies, dominated the last pre-pandemic theatrical year in 2019 with more than $11.1 billion in global box office revenue. But the times have changed, and with vaccinations becoming politicized and moviegoers now presented with earlier in-home movie access via HBO Max (Warner) and premium VOD (Disney, Universal, Lionsgate) and Paramount+ and Peacock (NBCUniversal), NATO is fuming at the fiscal repercussions.
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Indeed, Warner is releasing its entire 2021 theatrical slate — including Space Jam: A New Legacy — concurrently for free to subscribers on Max. Disney has made select movies (i.e. Black Widow) available for $29.99 purchase on Disney+.
Citing Black Widow’s excellent reviews, positive word of mouth, and strong previews and opening day total ($13.2 million/$39.5 million), the trade group was surprised by the movie’s 41% second-day drop in ticket sales, a weaker-than-expected opening weekend, and a stunning second weekend collapse in theatrical revenues.
“Why did such a well-made, well-received, highly anticipated movie underperform?,” the group asked in a July 18 statement.
NATO contends that despite assertions that the pandemic-era improvised release strategy was a success for Disney and the simultaneous home entertainment release model, the legacy exclusive theatrical release window translates into more revenue for all stakeholders in every cycle of the movie’s life.
Based on comparable Marvel titles, and other successful pandemic-era titles like F9: The Fast Saga and A Quiet Place Part II opening day to weekend ratios, NATO says Black Widow should have opened to anywhere from $92 million to $100 million. Based on preview revenue, compared with the same titles, Black Widow could have opened to anywhere from $97 million to $130 million.
Widow opened with a $80 million domestic box office weekend.
NATO contends early analysis pointed at the $60 million in Disney’s Premier Access (PVOD) revenue and compared it to the domestic theatrical of $80 million and suggested a success, especially since Disney keeps every dollar of home release.
“It does not,” writes NATO. “Approximately 15% of revenue goes to the various platforms through which consumers access Disney+. It ignores that Premier Access revenue is not newfound money, but was pulled forward from a more-traditional PVOD window, which is no longer an option.”
The trade group pointed out the average number of people per household in the U.S. is 2.37 — a number considered to be higher among family-oriented Disney+ households.
“How much password sharing is there among Disney+ subscribers?,” asked NATO. “Combined with the lost theatrical revenue and forgone traditional PVOD revenue, the answer to these questions will show that simultaneous release costs Disney money in revenue per viewer over the life of the film.”
Piracy no doubt further affected Black Widow’s performance, and will affect its future performance in international markets where it has yet to open.
Pristine digital copies became available within minutes of release on Disney+. Black Widow was the most pirated movie for the week endedJuly 12. It was also available on myriad illegal streaming sites all over the Internet.
NATO said similar digital piracy/password sharing occurred for all simultaneous releases, including Wonder Woman 1984, Godzilla vs. Kong, Cruella and Mortal Kombat).
“This did not happen for F9 or A Quiet Place 2,” wrote NATO. “How much money did everyone lose to simultaneous release piracy?”
The trade group suggests that the many questions raised by Disney’s limited release of streaming data opening weekend are being “rapidly answered” by Black Widow’s “disappointing and anomalous” performance.
“The most important answer is that simultaneous release is a pandemic-era artifact that should be left to history with the pandemic itself,” wrote NATO.