Theater Group Slams Disney’s ‘Black Widow’ PVOD Release Strategy Following Box Office Drop

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.

Warner’s ‘Zack Snyder’s Justice League’ Posts Fifth Week Atop U.K. Home Entertainment Chart

Warner Bros.’ Zack Snyder’s Justice League returned to No. 1 on the U.K.’s Official Film Chart the week ended June 16 following a photo-finish race with the studio’s Godzilla vs. Kong.

With just 550 unit sales separating the two titles, Zack Snyder’s Justice League scooped its fifth non-consecutive week at the top, boasting this week’s highest sales on DVD and Blu-ray Disc, while Godzilla vs. Kong at No. 2 is the week’s biggest seller on digital download.

Paramount’s A Quiet Place snuck up one place to No. 3 as fans of the post-apocalyptic franchise catch up with the original following its sequel’s theatrical release, knocking Warner’s Tom & Jerry: The Movie to No. 4. Disney’s animated adventure Raya and the Last Dragon held on at No. 5, and Wonder Woman 1984 (Warner) swooped up one place to No. 6.

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Paramount’s classic action-adventure collection of four “Indiana Jones” movies entered the chart at No. 7 thanks to the release of a new 4K Blu-ray Disc boxed set. Lionsgate’s Chaos Walking dropped two places to No. 8, landing just ahead of this week’s highest brand new entry, Universal’s 2 Hearts, at No. 9.

Entering on digital downloads only, 2 Hearts is a romantic drama telling the stories of two couples whose narratives unfold in different decades and different places — until a hidden connection brings them together in unimaginable ways, challenging the audience to believe that anything is possible.

Finally, former chart-topper Tenet (Warner) returned to the Top 10 after climbing six places to No. 10.

Warner dominated the week comprising 50% of the top-selling titles, followed by Paramount with 20%.


The Official Film Chart Top 10 – June 16, 2021

Rank Previous Week Movie Studio
1 2 Zack Snyder’s Justice League Warner
2 1 Godzilla vs. Kong Warner
3 4 A Quiet Place Paramount
4 3 Tom & Jerry: The Movie (2021) Warner
5 5 Raya and the Last Dragon Disney
6 7 Wonder Woman 1984 Warner
7 New Indiana Jones 4-Movie Collection
8 6 Chaos Walking Lionsgate
9 New 2 Hearts Universal
10 16 Tenet Warner

© Official Charts Company 2021

Disney CEO Bob Chapek Cites Home Entertainment Success as Key to Getting Closer to Consumers

For Bob Chapek, what’s old is new again.

Before Chapek become CEO of The Walt Disney Co., he was president of Walt Disney Home Entertainment and driver of a successful packaged-media marketing program that created demand for select Disney classic titles by keeping them temporarily unavailable via the “Disney Vault.”

Flash-forward to the present and Chapek has been focused in part on expediting Disney’s direct-to-consumer retail and streaming access. Speaking June 14 on the virtual Credit Suisse 23rd Annual Communications Conference, Chapek said the DTC business strategy — similarly to home video and transactional VOD in the past — is about getting closer to the consumer.

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Disney’s DTC unit includes streaming video services Disney+; Disney + Hotstar; ESPN+; Hulu; and Star+. The segment had more than 103 million combined subscribers, and posted revenue of $3.5 billion in the fiscal first quarter, up 73% from the previous-year period.

“It’s about having a granular understanding of what the consumption patterns are, and then speaking to the consumers in a way that’s going to be relevant to the content that they want specifically for themselves,” Chapek said. “And by doing so, we’ll drive engagement and consumption.”

Disney+ has taken baby steps into premium VOD, dubbed “Premier Access,” enabling Disney+ subscribers early access to select movies priced at $29.99 purchase-only price. Subsequent retail channels include transactional VOD, electronic sellthrough, DVD and Blu-ray Disc.

“In terms of the relationship that we have with our distribution partners, the key is having a strong symbiotic relationship, and that’s what we’ve got, as they really want Disney content and we bring that value to their platform,” Chapek said.

“So as long as we have a symbiotic relationship, where we bring something they need, we get something that we need. It’s a healthy relationship. And with the wide variety of content that we have in our machine, I think we’ll continue to have that very positive, very productive, very symbiotic relationship.”

When asked whether Disney might separate select Disney brands such as Marvel and Star Wars into standalone streaming platforms, Chapek said the aggregated business model, including combining Disney+, ESPN+ and Hulu into a specially-priced combo offering, is working.

“There is sort of a large overlap between people that like Marvel versus people that like Star Wars and people that like Disney,” he said.

“We won’t say no to anything in the future, but right now we’re really happy with our more highly aggregated model that we have, both from a cost standpoint and from a market opportunity standpoint. But again, who knows it could evolve over time as we learn more and more in different regions across the world.”

Lionsgate: Home Entertainment Represented 55% of Fiscal-Year Motion Picture Revenue

While the pandemic wreaked havoc on the theatrical business, home entertainment remained strong for Lionsgate in fiscal year 2021, ended March 31. Home entertainment revenue, which is derived from the sale or rental of feature films and television production movies or series on packaged media and through digital media platforms, represented 55.6%, or $601 million of motion picture revenue in the fiscal year.

That was down about 15% from $704.8 million in home entertainment revenue in fiscal year 2020. The primary decline was in packaged media, which saw total revenue fall almost 46% to $139.5 million from $256.9 million in FY 2020. Lionsgate, which shipped 29 million combined DVD/Blu-ray Disc units in the year, attributed the revenue drop to fewer home entertainment releases from the 2021 theatrical slate due to the global pandemic and other issues.

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The decrease in packaged-media revenue was partially offset by increased digital media revenue of $13.6 million, which included titles The Secret: Dare to Dream and Force of Nature. Digital media revenue included the PVOD release of Antebellum, the initial release on a streaming platform of Run and from I Still Believe and Knives Out in 2020. Digital media revenue in fiscal 2020 included significant revenue from John Wick: Chapter 3 — Parabellum.

Top-selling digital releases in the year included Antebellum, The Secret: Dare to Dream, The Silencing and Mortal reaching number one on the iTunes movie charts and two titles, Force of Nature and The Secret, debuting at number one on the Comscore On-Demand Chart.

Home entertainment revenue from TV product in fiscal 2021 increased $72 million, or 118.4%, compared with fiscal 2020, driven by digital media revenue for the second syndication license of “Mad Men” and digital media revenue for Power: Season 6, partially offset by digital media revenue in fiscal 2020 for Power: Season 5.

Interestingly, packaged-media sales of television shows increased 67.6% to $5.7 million, from $3.4 million in 2020.

Disney’s ‘Raya and the Last Dragon’ No. 1 on U.K. Home Entertainment Chart

Disney’s Raya and the Last Dragon ranked No. 1 in its debut on the Official Film Chart in the U.K. May 26 following its release on DVD & Blu-ray Disc — more than doubling the sales of its closest competition.

In the film, viewers find themselves in a re-imagined world named Kumandra, where humans and dragons once lived together before sinister monsters threatened the land and the dragons sacrificed themselves for humanity. More than 500 years later the monsters, known as Druun, have returned, and it’s up to a young warrior named Raya (Kelly Marie Tran) to track down the last dragon and stop them for good.

At No. 2, live action worlds collide in Warner’s Tom & Jerry, which makes a strong first-week performance on digital downloads only, while Wonder Woman 1984 moved down one spot to No. 3.

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The previous week’s No. 1 The Little Things dropped to No. 4, landing just ahead of Keanu Reeves in ’90s action classic Speed, which sped up 27 spots to No. 5 following to a new release on 4K Ultra HD Blu-ray.

Sony Pictures Home Entertainment’s Peter Rabbit rose four spots to No. 6, and former chart topper Zack Snyder’s Justice League (Warner) fell four spots to No. 7.

Shark attack thriller Great White made its debut at No. 8, while Godzilla: King of the Monsters rose six spots to No. 9. Finally, Spider-Man: Far From Home rounded off the week at No. 10.

The Official Film Chart Top 10 – May 26, 2021

Rank Previous Week Title Studio
1 New Raya and the Last Dragon Disney
2 New Tom & Jerry Warner
3 2 Wonder Woman 1984 Warner
4 1 The Little Things Warner
5 32 Speed 20th Century
6 10 Peter Rabbit Sony Pictures
7 3 Zack Snyder’s Justice League Warner
8 New Great White Altitude Spirit
9 15 Godzilla: King of the Monsters Warner
10 5 Spider-Man: Far From Home Sony Pictures

© Official Charts Company 2021

The Home Team Scores

The year 2020 will go down in the history books as the year of COVID-19, a once-in-a-century pandemic that shut down the nation – the world – until scientists could figure out exactly what the hell was going on.

It was also the year when all entertainment became home entertainment. With theaters dark, studios pivoted to premium video-on-demand (PVOD) – which in reality is nothing more than a higher-priced home window – to give consumers an alternative venue to watch their first-run movies.

It’s still too soon to talk definitively about lasting changes brought on by the pandemic. But there are certainly some good, solid, educated guesses that can be made.

First and foremost, the hallowed three-month theatrical window is gone. Out the door. Kaput. It’s been outdated for years; even the biggest theatrical blockbusters typically run out of steam after three or four weeks on the big screen, and there’s no reason in the world other windows have been kept shut for such a long period of time.

As a result, PVOD is not going to go away with the virus. When movie theaters fully reopen, which hopefully won’t be too much longer, they’re still going to be sharing the wealth with other platforms with such familiar acronyms as PVOD, PEST (I never did like that one!), and, of course, SVOD. We must remember that in the wake of the World Health Organization’s March 2020 declaration of a global pandemic, all movies did not go the PVOD route. Several big films were sold to Netflix, beginning with Paramount’s romantic comedy The Lovebirds, the first theatrically canceled film to go straight to a third-party streaming service. And then later in the year came the stunning, and disruptive, announcement by WarnerMedia that its entire 2021 theatrical slate would be released simultaneously to its upstart streaming service, HBO Max, which clearly needed (and still needs) a boost.

Regardless, the common denominator for all these acronyms is home viewing. And that means home entertainment – which Media Play News had a big role in redefining several years back as any filmed content available for on-demand viewing by the consumer,  regardless of whether it was bought or rented on disc or digital or streamed over the Internet – will remain the dominant way people will consume entertainment even when the pandemic is just a distant memory.

As our third annual marketing issue shows,  studios during the pandemic year of 2020 epitomized the expression, “When the going gets tough, the tough get going.” With theaters out of the picture (literally as well as figuratively), marketing shifted toward home audiences and, invariably, campaigns were either started or completely run by home entertainment marketers.

They were no longer playing second fiddle to their theatrical counterparts; they took the lead and saved what could have been a catastrophic year by eventizing PVOD releases and aggressively mining their catalogs for anniversary and other promotional opportunities.

At several studios, home entertainment marketing teams have been merged with their theatrical and, in some cases, television counterparts to create hybrid marketing organizations geared to the new reality of multi-window, multi-platform releases.

But let’s never forget who got the proverbial ball rolling. When Hollywood was down, it was the home team that stepped up to the plate.

Warner’s ‘The Little Things’ Tops U.K. Weekly Home Entertainment Chart

Warner Bros. finished an impressive week in U.K. home entertainment, securing 50% of the top 10 selling titles for the week ended May 19.

The studio’s The Little Things, starring Denzel Washington, Jared Leto and Rami Malek, made a No. 1 debut on the Official Film Chart, leading the list of the U.K.’s most popular films as the week’s biggest release on DVD and Blu-ray Disc.

In the film, deputy sheriff Joe Deacon (Washington) is sent to Los Angeles for a quick evidence-gathering assignment — but as he teams up with detective Jim Baxter (Malek) to help solve a serial killer case in the city, disturbing secrets from his past are unearthed that could threaten more than the case.

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Wonder Woman 1984 held on for another week at No. 2, as three-week chart topper Zack Snyder’s Justice League dropped to No. 3. DC animated adventure Justice Society: World War II launched at No. 4, knocking Spider-Man: Far From Home down one spot to No. 5.

Crime thriller The Virtuoso, starring recent Oscar winner Anthony Hopkins, debuted at No. 6, landing just ahead of soccer star Eric Cantona’s produced, Man United documentary, The United Way, at No. 7. Venom returned to the Official Film Chart at No. 8, and Tenet finished at No. 9.

Finally, 2018 comedy adventure Peter Rabbit jumped back to No. 10, thanks to consumers catching up with the character ahead of the release of sequel Peter Rabbit 2, which is in U.K. cinemas now.

The Official Film Chart Top 10 – May 19, 2021

Rank Previous Week Movie Title Distributor
1 New The Little Things Warner
2 2 Wonder Woman 1984 Warner
3 1 Zach Snyder’s Justice League Warner
4 New Justice Society: World War II Warner
5 4 Spider-Man: Far From Home Sony Pictures
6 New The Virtuoso Lionsgate
7 New The United Way Spirit Entertainment
8 Return Venom Sony Pictures
9 8 Tenet Warner
10 26 Peter Rabbit  Sony Pictures

© Official Charts Company 2021

Pandemic Hammers Disney Q2 Home Entertainment Retail

Ongoing effects of the pandemic on studio production and retail saw Disney report a 36% decline in second-quarter (ended April 3) content sales/licensing and other revenue to $1.9 billion, from $2.9 billion in the previous-year period. The segment includes home entertainment, which includes both packaged media and digital.

The decrease in home entertainment distribution was due to lower unit sales of new release titles reflecting the ongoing impact of COVID-19, partially offset by lower marketing costs. The quarter included Mulan and Soul, whereas the prior-year quarter included Frozen II, Maleficent: Mistress of Evil, Ford v. Ferrari, Star Wars: The Rise of Skywalker and Onward.

Frozen II and Star Wars: The Rise of Skywalker were the top-two selling DVD/Blu-ray Disc releases in 2020.

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Segment operating results increased from a loss of $25 million to a profit of $312 million. The increase in operating income was due to higher TV/SVOD distribution results and lower film and television cost impairments, partially offset by lower home entertainment distribution results.

Higher TV/SVOD distribution results were due to an increase in income from sales of episodic content, partially offset by a decrease in sales of film content. Higher income from sales of episodic content was driven by sales of more profitable programs in the current period. Lower results from film
content sales were driven by fewer titles sold in the current year as a result of the ongoing impact of COVID-19.

Report: 83% of Consumers Plan to Maintain, Increase Home Entertainment Spending

More than a year after the start of the  COVID-19 crisis, a majority of consumers are beginning to turn the page on the pandemic as vaccinations increase and a sense of normalcy returns, according to new data from Tremor Video.

Conducted in March and comprised of surveys with a nationally representative sample of 893 respondents in the United States, the research found that 56% of consumers feel optimistic about the year ahead and 60% predict a return toward normality within the year.

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According to the data, 83% of consumers plan to either maintain or increase their current spend levels when returning to a more normal life, on average across categories. Consumers report that they plan to either maintain or increase their spending at the highest rates for the following categories: groceries (92%), beauty & personal care (86%), consumer electronics (84%), home & garden (84%) and home entertainment (83%).

With this likely increase in spending comes promising news for brands with brick-and-mortar dimensions of their businesses, as 84% of consumers plan on shopping in-person during the year, with 29% reporting that they will do all of their shopping in-person and 23% reporting that they will do most of their shopping in-person with some online shopping.

Although the research suggests that consumers are eager to resume their pre-COVID activities, their enthusiasm for this return to more normal lifestyles does not necessarily mean that their rates of TV engagement will decline as a result. In fact, most consumers are likely to engage with connected TVs at comparable or higher rates as the pandemic dissipates. Over the next six months, 86% of consumers plan to watch live TV at the same or increased rates, 88% plan to watch the same or higher amounts subscription-based VOD, and 81% plan to maintain or increase their viewing of ad-supported VOD.

“After a long period of being homebound, consumers are feeling positive about the future, as they look to resume activities like dining out, traveling and in-store shopping, all of which should give advertisers a renewed sense of confidence in the months ahead,” Terence Scroope, VP of media insights and analytics at Tremor Video, said in a statement. “In parallel, our study suggests that consumers plan to increase their time with CTV content, reinforcing just how essential the medium will continue to be for advertisers as they look to fine-tune their 2021 media strategies.”

Report findings include that since March 2020, TV viewing has spiked considerably, with 61% of consumers saying they have watched more TV than before the outbreak of the pandemic. Over the next six months, increased engagement with both paid and free TV streaming will be most pronounced among younger age demos (18-44s) and higher income ($100,000 or more, annually) demos

Consumers report that they will be more supportive of local businesses with most (59%) planning to continue shopping locally. Most (58%) consumers have adopted new behaviors thanks to increased time shopping online during COVID; this is especially prevalent among the 18-34 age group.


Packaged Media Keeps ‘Wonder Woman 1984’ Atop Weekly U.K. Home Entertainment Chart

Warner Home Video’s Wonder Woman 1984 continues to resonate with consumers in the U.K. thanks to packaged media. The DC superhero marked a fourth week at No. 1 on the Official Film Chart through April 7. The title was assisted with 84% of its sales made up of DVD, Blu-ray Disc and 4K UHD Blu-ray copies, despite strong competition from the chart’s highest new entry: Disney Pixar’s Soul, which finished No. 2.

Spurred by the theatrical success of Godzilla vs. Kong, Warner’s Godzilla: King of the Monsters climbed seven spots to No. 3; Sony Pictures Home Entertainment’s Spider-Man: Far From Home remained at No. 4; while Warner’s Scoob! shot up 18 spots to No. 5. Universal Pictures Home Entertainment’s Trolls World Tour finished No. 6, while a double feature of Wonder Woman/Wonder Woman 1984 finished at No. 7.

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Moving up 13 spots to No. 8 was Warner’s Roald Dahl’s The Witches, which finished just ahead of Mel Gibson’s The Passion Of The Christ (Icon Home Entertainment) at No. 9 following the Easter weekend — the first time the movie has earned a spot in the Official Film Chart. Finally, Harry Potter: The Complete Collection (Warner) jumped to No. 10, marking the first time the full collection of eight movies in the franchise entered the Top 10.

Rank Previous Week Movie Peak
Week on Chart
1 1
Wonder Woman 1984 (Warner)
1 4
2 New
Soul (Disney/Pixar)
2 1
3 10 
Godzilla: King of the Monsters (Warner)
2 22
4 4
Spider-Man: Far From Home (Sony Pictures)
1 72
5 23 
Scoob! (Warner)
1 24
Trolls World Tour (Universal)
1 37
Wonder Woman/Wonder Woman 1984 (Warner)
2 2
8 21 
Roald Dahl’s The Witches (Warner)
2 15
9 New
The Passion of the Christ (Icon)
9 1
10 13 
Harry Potter: The Complete Collection (Warner)
9 17