Sony Pictures, Crunchyroll Join Hollywood’s Russian Business Boycott

Sony Pictures Entertainment has reportedly joined a growing Hollywood ban on all business ventures in Russia due to President Vladimir Putin’s unprovoked invasion of neighboring Ukraine. The studio has previously halted the theatrical release of Morbius in Russia.

In a March 11 memo to staff, chairman/CEO Tony Vinciquerra cited the ongoing carnage Russian troops are wreaking on Ukraine cities and civilian populations, leaving thousands dead and millions displaced or forced to flee the country.

“We stand with many businesses around the world who have now paused their business operations in Russia, and in support of the humanitarian efforts currently underway in Ukraine and the surrounding region,” Vinciquerra said.

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The executive said the ban includes planned home entertainment releases such as Spider-Man: No Way Home, any future television distribution deals. Recently acquired Crunchyroll also suspended its anime streaming service in Russia.

“Our thoughts and prayers remain with those who have been impacted and it is our hope that a peaceful resolution can be found soon,” Vinciquerra said.

Sony Pictures, Disney, BBC Studios Join DEG International

The Digital Entertainment Group International (DEGI) Feb. 23 announced that BBC Studios, Sony Pictures Entertainment and The Walt Disney Company, EMEA, have become members of the global arm and sister body to the U.S. based DEG: The Digital Entertainment Group (DEG).

The companies join existing DEGI members Google, Lionsgate, Paramount Pictures, Universal Pictures and Warner Bros. Pictures.

Joe Braman, co-chair of the DEGI, said 2022 promises to be a global renaissance for home entertainment, with the DEGI and DEG supporting the missions of stakeholders and driving common agendas for category growth.

“The DEGI welcomes these three new members and their engaged membership at such an exciting time for the category,” Braman said. “As the surge in new content continues across the next six months, their experience and ambition will be a huge benefit to our collective goals.”

In the United Kingdom, more than 30.1 million VOD movie rentals were recorded from January through October 2021, as well as 17.7 million digital and physical transactions, despite ongoing supply chain issues. The final week of 2021 saw the biggest uptick in digital movie sales in the United Kingdom since records began.

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Laura Broadbent, project director, transactional digital acceleration program at Sony Pictures Entertainment, believes that the evolving consumer appetite for digital content is at the heart of movie and TV consumption going forward.

“This presents a phenomenal opportunity for growth across international territories,” Broadbent said in a statement.

Broadbent credited the DEGI with providing the studio with a strong platform for collaboration through the sharing of research, insight and knowledge, which, she says will enable Sony to help its audiences understand how and where they can rent or buy the wealth of content available to them.

Johnnie Thompson, director of digital stores for EMEA & Russia at The Walt Disney Company, said the consumer base is more than subscription VOD.

“With almost 18 million digital purchases in the U.K. alone in 2021, the category continues to thrive,” Thompson said. “So, it’s essential that we come together as an industry to share our knowledge and expertise to drive the digital category forward, and DEGI provides a great platform to do just that.”

Looking Back at 2021: Home Entertainment Struggles to Find the New Normal

NEWS ANALYSIS — The shadow of COVID-19 continued to hang over 2021, despite rosy predictions the previous summer that the worst would soon be over.

By mid-year, with a vaccine rollout in full swing, most restrictions were lifted and theaters were welcoming back moviegoers, particularly after studios once again began stepping up movie production. This theatrical recovery continued, unchecked, through the emergence of the summer Delta variant and the beginning of the winter Omicron surge. Indeed, the December 2021 theatrical opening of Spider-Man: No Way Home generated $260 million in domestic ticket sales, the second-highest North American box office opening. Domestic box office revenue for 2021 is estimated at $4.5 billion, more than twice what it generated in 2020 but still down 61% from 2019, the last year before the virus hit.

Meanwhile, the entertainment world in 2021 was rocked by two major announcements: Amazon bought a movie studio, MGM, for $8.45 billion, and AT&T announced plans to spin-off WarnerMedia through a merger with Discovery, resulting in a new media powerhouse, Warner Bros. Discovery, under Discovery Inc.’s CEO David Zaslav. The deal, approved by the European Commission in December, is expected to be completed in mid-2022, pending Discovery shareholder and federal regulatory approval.

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Sadly, the year ended on a down note, with Omicron leading to theater closures in Europe and the cancellation or postponement of several key entertainment-industry events, including The Critics Choice Awards, the National Board of Review’s annual gala, the Palm Springs Film Festival, and BAFTA Los Angeles’ annual tea party for the awards season.

The year also saw the vindication of WarnerMedia’s controversial plan, announced at the end of the prior year, to release its entire theatrical slate simultaneously on its HBO Max streaming service. Initially railed against as a death blow to the movie business, the strategy in retrospect kept the business alive, providing a steady stream of high-profile new product to movie theaters hungry for fresh films, even if they no longer would be exclusive to the big screen.

Jim Wuthrich

“2021 marked the first anniversary of HBO Max and, with it, a whole new distribution pattern for movies,” said Jim Wuthrich, president of content distribution for WarnerMedia. “Due to the pandemic and uncertainty of closures, WarnerMedia made all of its movies available on HBO Max and in theaters at the same time. This was great for movie fans, as they could watch movies such as Wonder Woman 1984 or Godzilla vs. Kong at home or in theaters.”

Mixed Results

On the home entertainment front, 2021 was the proverbial mixed bag for the industry’s two segments, subscription streaming and transactional/physical.

The first few months of 2021 were clouded in uncertainty, as the winter surge of the virus delayed the reopening of movie theaters well into the spring. Studios held back their big releases until their opening strategy — theaters, PVOD or both — could be determined.

Streaming, not surprisingly, continued to flourish at the accelerated pace that began a year earlier with the onset of the pandemic. Consumer spending on subscription video-on-demand services soared more than 20% in the first half, according to DEG: The Digital Entertainment Group estimates — and those numbers don’t include Amazon Prime Video, which is considered in the same league as Netflix.

Amy Jo Smith

“The growth in subscription streaming in 2021 can be attributed to consumers who continued to spend time at home, increasing their engagement with content offered through an abundance of new direct-to-consumer subscription services, including Disney+, HBO Max, Paramount+, Peacock, AMC+ and many others,” said Amy Jo Smith, DEG president and CEO. “These services provide consumers premium content with convenience and value.”

Disc and digital sales of movies in the first half of 2021, meanwhile, were off by more than 25% from the prior year, while combined disc and digital rental (TVOD) revenue suffered a first-half decline of more than 30%, according to estimates prepared by DEG: The Digital Entertainment Group.

TVOD Recovers

As the year progressed, subscription streaming continued to clearly dominate home entertainment, even as the transactional side of the business began to recover in the wake of theatrical reopenings that remained on track despite the summer emergence of the more contagious Delta variant. Final year-end DEG numbers are not yet in, but by the third quarter disc and digital sales had trimmed their quarterly decline to 12% while rentals were off just 14%.

“Factors limiting transactional growth in 2021 include few new theatrical releases, which are historically a key driver of home entertainment spending,” Smith said. ”This was particularly true early in the year. Spending on library titles, however, has been notably strong throughout the pandemic, and with theatrical new releases restarting mid-year, we saw spending on home purchases of new releases beginning to pick up in the third quarter. We expect to see this trend continuing when the full year is tallied.”

“Looking back at the year, 2021 certainly had its challenges, but there were some high notes as well for our business,” notes Jason Spivak, EVP of distribution for North American Television & Home Entertainment at Sony Pictures Entertainment.

Jason Spivak

“Early in the year, we were blown away by the tremendous success of Monster Hunter on both physical and digital formats. We achieved strong PVOD results on The Father and Don’t Breathe 2. And throughout the year we saw consistent strength in our digital catalog,  particularly our drafting efforts around the ‘Spider-Man’ franchise.

“The biggest highlight for our business, however, has been the fourth-quarter theatrical performances of Venom: Let There Be CarnageGhostbusters: Afterlife and, of course, the worldwide phenomenon that is Spider-Man: No Way Home.  These films demonstrate that consumers are excited to return to theaters and that they crave the communal experience that can only be achieved in a movie theater.”

WarnerMedia’s Jim Wuthrich said his company’s strategy of releasing its news films to theaters and streaming on the same day “did add an element of unpredictability to [traditional, transactional] home entertainment in forecasting demand, as it was unique to have streaming as the first window.” Ultimately, he said, “we found that there is robust demand for transactional (EST/TVOD/physical), despite the change in windowing.”

Bob Buchi

Bob Buchi, president of Paramount Home Entertainment, said that while 2021 “certainly did not go as planned, consumers again turned to home entertainment options in record numbers.  Throughout the year’s unprecedented circumstances, Paramount continued to experiment with new release windowing, maximized the power of our exceptional library, and supported the ongoing growth of Paramount+.”

With very different release strategies, Buchi added, A Quiet Place Part II, Snake Eyes and Paw Patrol: The Movie “delivered tremendous results across each studio window thanks to the cumulative marketing muscle and cross-company promotional efforts, which bodes well for the ongoing coexistence of every platform.”

Paramount also saw consumer spending on catalog titles remain strong, “representing nearly 60% of annual revenue and holding steady to slightly up compared to the extraordinary sales in 2020 across physical and digital worldwide,” Buchi said.  “Digital sales, in particular, have been exceptionally strong during the pandemic, with a compounded annual growth rate of over 25% compared to pre-pandemic 2019 levels globally.”

Paramount also scored with the 40th anniversary of the “Indiana Jones” franchise with the first 4K Ultra HD release of the films on both disc and digital platforms, Buchi noted. “And on the television front, home entertainment consumers continue to flock to ‘Yellowstone,’ with nearly 3 million digital transactions for season four, which launched in November.”

Michael Bonner

Universal Pictures Home Entertainment president Michael Bonner said that while 2021 “remained unpredictable and challenging on several fronts … consumers’ engagement with content has never been stronger. During these unprecedented times, the studios have served audiences well by embracing unconventional release patterns and new business models giving consumers more ways to access and enjoy movies.”

Bonner added that “engagement is up, and it’s happening across various services and business models. For Universal, our new release home entertainment business remained very strong in 2021 as we saw with F9, The Croods: A New Age, Let Him Go, Promising Young Woman and several others, with a significant contribution coming from our new PVOD window and followed by our traditional home entertainment offering.  On top of that, similar to 2020, we saw our library business reaching historical levels.”

Distribution Deals

On the physical side of the business, Sony Pictures Home Entertainment and Lionsgate in February 2021 announced a multiyear agreement in which Sony will handle distribution of Lionsgate’s DVD/Blu-ray Disc releases in the U.S. and Canada beginning in July. Lionsgate’s North American packaged-media distribution had been handled by the former 20th Century Fox Home Entertainment, which was acquired in 2019 by Disney.

Lionsgate continues to maintain its own independent sales and marketing teams, but is leveraging SPHE’s supply chain and distribution services. At the time Sony’s Jason Spivak said, “By working together, we can identify and leverage efficiencies in the supply chain that will benefit not only our respective studios, but also retailers and, ultimately, the millions of consumers who enjoy Sony Pictures and Lionsgate feature films and TV programs in the 4K UHD, Blu-ray and DVD formats.”

Two months after the Sony-Lionsgate deal was announced came the official launch of Studio Distribution Services (SDS), a joint venture between Warner Bros. Home Entertainment and Universal Pictures Home Entertainment to distribute packaged media in the United States and Canada.

“Starting any business in a pandemic is challenging, but one that relies on delivering physical goods to stores across two countries during a supply chain upheaval is not for the faint of heart,” WarnerMedia’s Wuthrich said. “The SDS team, along with the studios, did a great job managing through a challenging time.”

Eddie Cunningham, the former Universal Pictures Home Entertainment president who was tapped to run SDS, told Media Play News earlier in the year, “We, with our many supply chain partners in manufacturing, distribution and freight, are doing everything in our power to mitigate those pressure points.

“Sometimes meeting delivery dates and keeping retail on-shelf availability at our usual high industry standards has been difficult. It is a huge focus across our company and everything in supply chain that we used to check weekly is now daily, and everything we did daily is almost hourly, as we constantly re-assess priorities.”

Streaming Fatigue and the Rise of AVOD

While disc sales continue to be a priority for the big Hollywood studios, along with digital movie sales and rentals, streaming clearly remains the dominant force in home entertainment. As of the end of the third quarter, streaming accounted for nearly 80% of total consumer spending this year on home entertainment, or $18.6 billion. Total consumer spending on disc and digital sales and rentals in the first nine months of the year was just $5 billion.

And yet subscription streaming did face several challenges, including consumer fatigue — stemming largely from the rising costs of subscribing to multiple services — and rapid gains in free ad-supported platforms such as Pluto and Tubi. In professional consultancy Deloitte’s 2021 Digital Media Survey, more than half of the respondents said they are re-evaluating multiple streaming subscriptions, and 40% said they planned on terminating at least one subscription. Adriana Waterston, SVP of insights and strategy at Horowitz, told Media Play News in November that streamers are feeling overwhelmed by the proliferation of services, with many struggling to figure out what to watch, and where.

In December, a TVision survey found that time spent on subscription video-on-demand platforms decreased 8.6% from the first quarter to the third quarter of 2021, while time spent on ad-supported VOD increased 9.3%. It should be noted that the SVOD decline may be due, at least in part, to the vaccine rollout and people once again venturing out into the world, while AVOD growth includes not just SVOD dropouts but also linear TV audiences. Regardless, speaking in December at an OTT.X conference, Colin Dixon of nScreenMedia said the FAST/AVOD business is projected to reach $4 billion by 2024.

Mark Fisher

Mark Fisher, president and CEO of OTT.X, the trade association for streamers, said free ad-supported streaming is just one more option that is leading to continued growth for the overall home entertainment business.

“Internet-based delivery today gives the consumer so many more opportunities and more choices to enjoy great content — both on demand and linear,” he said. “Some prefer long-form, some short-form; some prefer to watch without ads, while others watch ads to avoid paying; some like to watch what they want, when they want, while others like the sit-back FAST experience; some want to build their cloud-based collections and others just want to watch once; some like to watch big-budget spectacles and other enjoy good indie-produced stories; and many are adding the diversity of international content and niche content and channels. Opportunity and choice benefit everybody.”

He’s got a point. Overall, the home entertainment business is on track for another record year. The DEG’s estimate of $23.6 billion in total consumer spending in the first nine months of this year is up 6.3% from the spending total at this same point in 2020.

Converging Businesses

And the two sectors of the business, streaming and transactional, are converging.

One of best examples of this is that while Redbox’s legacy disc-rental kiosks remain the company’s cash cow, a massive digital transformation — fueled by the company going public in October — is expanding the Redbox brand into digital, with a particular emphasis on streaming. Redbox Free Live TV, an ad-supported streaming service that launched in February 2020, now has more than 100 channels offering viewers free access to movies and television shows, news, and lifestyle and sports entertainment programming. In December, Redbox began advertising its digital products on its kiosks.

Galen Smith

Asked how Redbox fared in 2021, CEO Galen Smith said that on the kiosk and TVOD side, “ We continued to see a significant impact on the quantity of new release movies due to production being paused as a result of COVID, with fewer movies in 2021 than 2020. The good news is we anticipate the number of new theatrical movies releasing in 2022 should be back to levels not seen since 2019.”

As for streaming, he said, “2021 was a growth year for us — as we rapidly scaled both our AVOD service and FAST channels.”

Redbox going public, Smith noted, “provided us with additional capital to invest in the ongoing digital transformation of Redbox, as we built on our transactional video-on-demand service with growth in AVOD (more than 5,000 titles on demand) and FAST (more than 125 linear channels including five that are Redbox branded) and a subscription channels business coming in 2022.”

On the Indie Front

Independent film distributors, meanwhile, are finding the plethora of streaming services a whole new market for their films, augmenting their traditional TVOD and physical release.

“It’s always a good thing when new channels appear where we can license our films,” said Joe Amodei, president and CEO of Virgil Films & Entertainment. “The major accounts still rule in this area, but as they have dwindled down their buying in favor of original films and series we’ve enjoyed doing business with this new group of folks. It’s great.”

Indies also say they are finding their disc businesses remarkably resilient. Ed Seaman, COO of MVD Entertainment, said 4K Ultra HD Blu-ray “continues to surprise us. Sales are really strong, possibly because there aren’t a ton of products in this space, but mainly because our trade partners/content providers are choosing excellent content and do a great job lovingly restoring and filling these editions with great bells and whistles.

“Compared to last year, 2021 was far more stable. We knew we were in a pandemic and we didn’t have the fear of the unknown like last year, where we didn’t know what impact a lockdown would have on our business and our customers. We learned in 2020 that when everyone is stuck at home during a pandemic, home entertainment products and services are pretty popular. We were able to execute our plans with greater confidence in 2021 that the market was not going to fall apart, and we had a really strong year as a result.”

John Rotella

John Rotella, SVP for Shout! Factory, said the company saw “unbelievable growth in catalog and new-release sales” during the pandemic year of 2020, “and that swell carried forward into 2021.”

Shout! Factory, he said, “saw one of our best years ever on gross shipments and an equally impressive net business. We also saw growth in POS revenue in 2021. The DVD and Steelbook/4K business grew again as Blu-ray sales stayed even compared to 2020. New-release and catalog as a whole all improved from a surprising and productive year, led by our new Western, Old Henry, and 4K ‘Halloween’ releases.”

Some of this success, Rotella said, “can also be attributed to a less competitive new-release marketplace, upgraded and repackaged catalog, developing more valuable collectable products at a higher price and managing the right genre that works for mass [merchants]. Walmart and Amazon continue to offer new-release and catalog opportunities, and we saw an e-commerce surge in business. Looking back, 2021 unexpectedly managed to match 2020 in POS and shipments and remained far superior to 2019 in every area.”

On the downside, the supply chain crisis has compounded ongoing problems with limited replication opportunities, resulting in delays in bringing product to market.

“We were hugely affected by inbound transportation challenges, mostly from the U.K. and Europe, where many of our top clients reside,” MVD’s Seaman said. The situation improved toward the end of the year, he said. “I doubt the Omicron strain will cause lockdowns again, and I’m keeping my fingers are crossed that the labor challenges at the border are mostly conquered,” he said.

New Ways of Doing Things

Another home entertainment trend that continued in 2021 is the consolidation of theatrical and home entertainment teams. Warner Bros., Sony Pictures and Lionsgate went through their respective integrations in 2020; Paramount Pictures followed in March 2021 with a restructuring that led to the exit of 23 home entertainment marketing and distribution personnel, including marketing chief Vincent Marcais, respected publicity head Brenda Ciccone, and Dina Marovich, SVP of worldwide media and interactive marketing.

A new way of doing things sometimes finds home entertainment executives branching out beyond their wheelhouses.

“Somewhat out of the traditional course of business, our team successfully managed the launch of Virtual Reality experiences at the new Harry Potter store in New York City,” Warner’s Wuthrich said. “These two experiences allow Potter fans the ultimate experience of visiting Hogwarts or flying high above London on broomsticks while battling Death Eaters. The experiences have sold out since launching this summer and have been garnering rave reviews.  We look forward to expanding the number of locations in 2022 so more Potter fans will have a chance to live the experience.”

Weekend Box Office: Is There a ‘Ghostbusters’ Afterlife?

The 2016 theatrical release of Ghostbusters featured an all-female cast, mixed reviews and underwhelming box office.

For the pandemic delayed Ghostbusters: Afterlife, Sony Pictures Entertainment has gone back to the franchise’s roots with director Jason Reitman looking to emulate the family-friendly appeal of his father, Ivan Reitman’s 1984 original Ghostbusters, starring Dan Aykroyd, Harold Ramis, Bill Murray and Sigourney Weaver.

While Afterlife reviews have also been mixed, including a 66% Rotten Tomatoes social media score, the movie headlines Paul Rudd, who was just named People magazine’s “Sexist Man Alive,” and a young supporting cast entering the pre-Thanksgiving week when family holiday get-togethers often include a trip to the cineplex.

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When combined with the nostalgia surrounding the franchise, Afterlife should push Disney/Marvel Studios’ Eternals from atop the weekend box office results. Sony, which has only recently returned select tentpole releases (Venom: Let There Be Carnage) to the COVID-era box office, is projecting upwards of $28 million in opening weekend sales.

The conservative estimate falls below the original’s $30 million opener, as well the last film’s $46 million debut, but underscores the ongoing reduced expectations and realities in the current exhibition marketplace.

Warner Bros. Pictures’ King Richard, the biopic about Richard Williams, the tenacious father of tennis superstars Venus and Serena Williams, has a strong social media score (92%), popular lead star (Will Smith) and strong crossover appeal beyond sports fans.

The movie is also concurrently streaming for no extra charge to subscribers of HBO Max as part of WarnerMedia’s soon-ending 2021 distribution strategy that some observers contend has undermined the box office of recent Warner releases The Many Saints of NewarkCry Macho and Reminiscent, among others. The movie is projected to open from $5 million to $10 million in ticket sales this weekend, which would put it behind projections for Eternals ($11 million) and Paramount Pictures’ Clifford the Big Red Dog ($9 million) — the latter also streaming for subscribers on Paramount+.

Weekend Box Office: Disney Debuting First 45-Day Theatrical Release With ‘Free Guy’

Walt Disney Studios is set to turn another page in its ongoing pandemic experiment, in which the studio is releasing movies across different distribution channels with varying windows. Disney Aug. 13 will debut the 20th Century Studios action-comedy Free Guy, starring Ryan Reynolds, across more than 4,100 screens in a 45-day theatrical exclusive. The movie reportedly sold $2.2 million worth of tickets in sneak preview showings Thursday night (Aug. 12).

The film will head to streaming platform Disney+ only after its 45-day theatrical window, unlike other high-profile releases that became available for home viewing concurrently at a premium price. Disney CEO Bob Chapek, speaking on the media giant’s Aug. 12 fiscal call, said the studio going forward would pivot between theatrical exclusives, “Premier Access” VOD and assorted hybrid release strategies on an movie-by-movie basis.

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Recent Disney releases Black Widow and Jungle Cruise, have had concurrent theatrical and Premier Access releases — winning both the box office and lucrative PVOD markets.

Sony Pictures Entertainment is bowing Don’t Breathe 2, the ‘R’-rated low-budget horror-thriller sequel to the 2016 original that generated $26.4 million on its opening weekend. In the current pandemic reality, starring the Delta variant infections spreading throughout the country, the movie is expected to sell no more than $11 million worth of tickets domestically.

Another new release, Respect, a biopic from MGM and United Artists Releasing on the late R&B singer Aretha Franklin, starring Jennifer Hudson, is projected to generate upwards of $10 million.

Last week’s box office topper, The Suicide Squad, is projected to see second-weekend ticket sales plummet, in an ongoing trend among major studio releases. The DC Comics movie is streaming concurrently on HBO Max.

Sony Completes Acquisition of Crunchyroll

Sony Pictures Entertainment has completed its acquisition of AT&T’s Crunchyroll anime business through Funimation Global Group.

Funimation is a joint venture between SPE and Sony Music Entertainment (Japan)’s subsidiary Aniplex.

The agreement was first announced in December 2020.

Crunchyroll has a direct-to-consumer anime service with 5 million SVOD subscribers. It serves 120 million registered users across more than 200 countries and territories, offering AVOD, mobile games, manga, events merchandise and distribution.

The deal provides the opportunity for Crunchyroll and Funimation to broaden distribution for their content partners and expand fan-centric offerings for consumers, according to the joint announcement from SPE and AT&T.

“We are very excited to welcome Crunchyroll to the Sony Group,” Kenichiro Yoshida, chairman, president and CEO of Sony Group Corp., said in a statement. “Anime is a rapidly growing medium that enthralls and inspires emotion among audiences around the globe. The alignment of Crunchyroll and Funimation will enable us to get even closer to the creators and fans who are the heart of the anime community. We look forward to delivering even more outstanding entertainment that fills the world with emotion through anime.”

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“Crunchyroll adds tremendous value to Sony’s existing anime businesses, including Funimation and our terrific partners at Aniplex and Sony Music Entertainment Japan,” said Tony Vinciquerra, chairman and CEO of Sony Pictures Entertainment. “With Crunchyroll and Funimation, we are committed to creating the ultimate anime experience for fans and presenting a unique opportunity for our key partners, publishers, and the immensely talented creators to continue to deliver their masterful content to audiences around the world. With the addition of Crunchyroll, we have an unprecedented opportunity to serve anime fans like never before and deliver the anime experience across any platform they choose, from theatrical, events, home entertainment, games, streaming, linear TV — everywhere and every way fans want to experience their anime. Our goal is to create a unified anime subscription experience as soon as possible.”

The purchase price for the transaction is $1.175 billion, subject to customary working capital and other adjustments, and the proceeds were paid in cash at closing, according to the announcement. AT&T expects to use the proceeds from this transaction to help support its debt reduction efforts.

Disney Inks Licensing Deal for Sony Movies

The Walt Disney Co. and Sony Pictures Entertainment have announced a multiyear content licensing agreement for U.S. streaming and TV rights to Sony Pictures’ new theatrical releases across Disney Media & Entertainment Distribution’s portfolio of platforms.

Platforms include its streaming services Disney+ and Hulu, as well as linear entertainment networks ABC, Disney Channels, Freeform, FX and National Geographic.

The deal covers theatrical releases from 2022 to 2026 and begins for each film following its Pay 1 TV window. The agreement builds upon the companies’ prior arrangement, which saw Sony movies licensed to FX in the post-Pay 1 TV window.

The films will go to Disney platforms after Netflix, which also recently made a licensing deal with Sony.

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The deal also grants rights to a significant number of Sony’s library titles, ranging from the “Jumanji” and “Hotel Transylvania” franchises to Sony Pictures’ universe of Marvel character films, including Spider-Man.

The agreement provides Hulu access to a significant number of library titles beginning as early as this June.

“This landmark multiyear, platform agnostic agreement guarantees the team at Disney Media and Entertainment Distribution a tremendous amount of flexibility and breadth of programming possibilities to leverage Sony’s rich slate of award-winning action and family films across our direct-to-consumer services and linear channels,” Chuck Saftler, head of business operations for ABC, Freeform, FX Networks and acquisitions in DMED’s Networks division, said in a statement. “This is a win for fans, who will benefit from the ability to access the very best content from two of Hollywood’s most prolific studios across a multitude of viewing platforms and experiences.”

“This groundbreaking agreement reconfirms the unique and enduring value of our movies to film lovers and the platforms and networks that serve them,” Keith Le Goy, president, worldwide distribution and networks, Sony Pictures Entertainment, said in a statement. “We are thrilled to team up with Disney on delivering our titles to their viewers and subscribers. This agreement cements a key piece of our film distribution strategy, which is to maximize the value of each of our films, by making them available to consumers across all windows with a wide range of key partners.”

Financial terms of the agreement were not disclosed.

Sony Pictures, Netflix Ink Exclusive U.S. Movie Distribution Deal

In a throwback to a former landmark deal between Netflix and Walt Disney Studios, Sony Pictures Entertainment has signed a distribution deal with the SVOD behemoth for exclusive U.S. access to Sony theatrical releases following the box office and home entertainment windows.

The agreement, which begins in 2022, will replace Sony’s existing digital deal with Lionsgate-owned Starz. Sony, unlike other major studios, does not have its own branded streaming video service. Financial terms were not disclosed.

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The deal will include upcoming Sony releases Morbius, starring Oscar winner Jared Leto, and Uncharted, featuring “Spider-Man” actor Tom Holland. Sony, which will also produce movies for Netflix as part of the streamer’s 60+ movie releases per year, will give Netflix access to its lucrative Spider-Man franchise.

Other tentpole titles include Where the Crawdads Sing and Bullet Train, which will be among the initial 2022 offerings. They will be followed by continued entries in Sony Pictures’ rejuvenated slate of IP, including the sequel to Oscar-winning Spider-Man: Into the Spider-Verse and several more SPE films featuring Marvel characters, including future installments of Venom and Spider-Man; and expected follow-ups for the “Jumanji” and “Bad Boys” franchises. Netflix will also license rights to select titles from SPE’s vast movie library.

“This not only allows us to bring Sony’s impressive slate of film franchises and new IP to Netflix in the U.S., but it also establishes a new source of first run films for Netflix movie lovers,” Scott Stubler, head of global films at Netflix, said in a statement.

Sony will also offer Netflix a first look at any films it intends to make directly for streaming or decides later to license for streaming, and Netflix has committed to make a number of those films over the course of the deal. Any such direct-to-streaming projects will be additive to SPE’s full 15-20 title theatrical film slate, which will continue at its current volume. Netflix recently acquired rights to Sony animated comedy The Mitchells vs. The Machines.

“Netflix has been a terrific partner as we continue to expand our relationship,” said Keith Le Goy, president of worldwide distribution and networks for Sony Pictures Entertainment. “This exciting agreement further demonstrates the importance of that content to our distribution partners as they grow their audiences and deliver the very best in entertainment.”

Netflix’s 2016 deal with Disney afforded the streamer exclusive access to the studio’s movies — in a deal that reportedly cost Netflix $350 million annually. That turned out to be a boon for Netflix as it had exclusive rights to Disney’s burgeoning Marvel Studios’ titles — a reality that help skyrocket subscriptions. Disney did not renew the agreement when it decided to launch branded SVOD platform Disney+.

Sony TVs Bringing Movies Into the Home With Bravia Core Streaming Service

Sony Pictures Entertainment is partnering with sister division Sony Electronics to stream branded movies directly into consumer homes with new Sony Bravia XR 4KHD televisions.

The platform, which was first announced at CES 2021 in Las Vegas, officially launches April 6.

Sony is offering up to 300 movies to consumers through its Bravia Core streaming service app embedded in all 2021 XR models. Units come with five to 10 movie credits depending on the model. The service streams titles at up to 80 Mbps, claiming to deliver “lossless” 4K UHD picture quality on a wide range of content. Additional movie credits can be purchased separately. Titles range from new to classic and include Venom, Peter Rabbit, Ghostbusters, Bloodshot, Bad Boys for Life, Underworld: Evolution, Angels & Demons, The Da Vinci Code, Resident Evil: Apocalypse, Blade Runner 2049 and Jumanji: The Next Level, among others.

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“We bring together the best filmmakers and the best actors and deliver the resultant feature films to consumers through the brilliance of Sony technology and the brilliance of our televisions,” Keith Le Goy, president of worldwide distribution and networks for Sony Pictures Television, said in a statement.

The Bravia Core streaming service will also offer access to “Imax Enhanced,” which claims to replicate the Imax theatrical experience in the home. Imax titles include Spider-Man: Far From Home, Little Women, Baby Driver and A Beautiful Day in the Neighborhood, among others.

Similar to Sony DVDs and Blu-ray Disc releases, Bravia Core will offer users “Studio Access,” featuring the inside stories on what happened behind the scenes on movies via extra footage and interviews.

“For about four years now we’ve been working to really think how we re-imagine the at-home experience and how we deliver great, immersive technology that you typically see in the cinema,” said Pete Wood, SVP of new media distribution at Sony Pictures Entertainment.

 

OTT.X Summit Panelists: Transactional VOD, Including PVOD, Here to Stay

Transactional VOD, or the digital rental or sale of titles, is here to stay — including the higher-priced COVID-induced newcomer PVOD — said panelists during the OTT.X spring summit.

“It’s still, if you actually include the declining physical part of the business, it’s still a $10 billion business,” said Fandango’s Cameron Douglas, who oversees transactional services FandangoNow and the recently acquired Vudu. “It also was the first year, last year, that you actually saw growth, combined physical and digital business en masse. So I absolutely think that there’s a continued appetite for consumers for transactional video whether it’s Blu-ray and DVD or TVOD.”

“It’s absolutely here to stay, and the reason for that is that is consumers cannot afford to sign up for every single subscription service that’s out there, and there’s no way that you can replicate the selection that’s available on transactional platforms,” added Jill Allen, SVP of Sony Pictures Entertainment. “It’s just ubiquitous. It’s on every platform. And if you want to watch a movie, you generally know that it’s available to rent or buy somewhere. And then in addition TVOD has various benefits in terms of the windows, too, getting the earlier window. So in the near term I see it continuing. Even though it’s definitely benefited from COVID, looking forward I see it still being a very vibrant, large business.”

Transactional services also offer a deeper library of content than subscription services, panelists noted.

“I don’t know how many pieces of content Peacock has or Netflix has but it’s relatively small compared to a transactional platform,” Douglas added. “I think Vudu, at last count, has 225,000 movies and TV shows. I promise you that even the biggest services on the subscription side have nothing that size library.”

Panelists, clockwise, from left top: Mike Gamboa of Roku, Thomas K. Arnold of Media Play News, Jill Allen of Sony Pictures Home Entertainment, Michelle Edelman of Premiere Digital, and Cameron Douglas of FandangoNow. (Screen shot courtesy of Marc Rashba)

The studio leap into premium VOD (PVOD), usually a $20 one-time rental, has been successful as well, panelists noted, with Premier Digital’s Michele Edelman saying that a friend had shared a story about watching a first-run film at home.

“She said, ‘I treated myself to a theatrical movie in my house,’” Edelman said. “’I’d just had dinner, and I watched Barb & Star Go to Vista Del Mar.’ She said, ‘It was the best experience.’”

Edelman noted that “everyone’s screens are bigger,” making watching movies at home more theater-like.

“They’re creating this really great theatrical experience where they are,” she said.

Roku’s Mike Gamboa agreed.

“Consumers love new release movies,” he said. “I don’t think that’s going to change anytime soon, but I think they have been demanding the flexibility to watch either in theaters or at home. And I think from our perspective, the success of Trolls [World Tour on PVOD] and Scoob! [also on PVOD] kind of demonstrated that consumers love new-release movies at home, and the economics and technical infrastructure is in place to support that business model. So we do see opportunity and viability of PVOD and TVOD to support the new-release movies.”

Sony’s Allen, too, noted that PVOD produced changes in how the teams at the studio worked together.

“We’ve never collaborated so closely with our theatrical team,” she said.

Indeed, Douglas noted, PVOD titles were able to benefit from theatrical marketing as never before.

“I’m looking forward to a real PVOD title,” Douglas said. “We really haven’t had one. Premium VOD in its initial incarnation was meant to be a theatrical movie that has a short window to home entertainment. Because theaters haven’t really opened up yet, a real PVOD title is going to be the real test.”

With the windows shifting during the pandemic and studios experimenting with different windows and pricing, the calculus in how to release a title has become complex during the past year, Allen said.

“You now have to navigate around a whole new set of competitive windows and, internally, as a content provider, you have to look at when your content is going into other windows as well, too,” she said. “So it’s become a little bit more complex.”

Allen said she has to look at individual release plans for each of her studio’s own titles and also what windows the other studios’ titles are employing.

“You had Wonder Woman [1984] that had multiple new-release windows,” she noted. “If you’re competing against the third new-release window of that, is that now a big deal? So understanding the competitive landscape, very, very complex. Even within each studio, if you have a title that’s on a subscription service. If I have a Christmas-themed movie, and I have it available on an SVOD service, can I sell that movie right now?”

While new releases have been few and far between during the pandemic as the pipeline shrank to a trickle, TVOD services and studios leaned on catalog to fill the gap, panelists noted.

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“We’ve seen huge growth in [catalog] the last year because of the dearth of new release content,” Douglas said, adding the services have noticed “people rediscovering their favorites, collecting them, adding them to their library, including full series of television shows, where they’re buying almost the entire series of ‘Married With Children’ or ‘M*A*S*H’ or ‘The Office.’”

Sony, too, has been mining catalog while production slowed.

“It’s been our lives since COVID started,” Allen said.

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Indeed, consumers are responding by collecting digitally, noted Edelman.

“I just heard the other day, someone said, ‘I started building my digital library,’” she said. “’I now have in my library my absolute favorite films, and I’m buying them at these really discounted prices because it was worth it.'”

“It’s the best subscription service you could ever have,” added Douglas.