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.
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.
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.
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 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.
“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.
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.”
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  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.
“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.
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.
With no proprietary streaming video platform to leverage, Tony Vinciquerra, CEO of Sony Pictures Entertainment, isn’t willing to join Hollywood studios writing the obit for the traditional theatrical window in exchange for expedited direct-to-consumer access in the home.
In an interview with CNBC’s Julia Boorstin, Vinciquerra said the economics surrounding big-budget motion pictures mandate an exclusive theatrical release. That thinking would appear at odds with Warner Bros., which is releasing its entire 2021 theatrical film slate concurrently with SVOD access on HBO Max, beginning with Wonder Woman 1984 on Christmas Day.
“We think the [theatrical] window will become more flexible, which we think is a good thing for our films,” Vinciquerra said, adding that he believes 30 days is the best window to amortize the studio’s marketing over both theatrical and home entertainment windows. “Some films will do better with a shorter window, some will do better with a much longer window. We think that’s the way to go.”
Indeed, the executive said that when action adventure sci-fi movie Venom was released theatrically on Oct. 3, 2018, the studio was quick to negotiate a shorter box office since it wanted the Tom Hardy-starrer into home entertainment channels by the winter holidays. The title, which generated $856 million at the global box office, was released on DVD and Blu-ray Disc Dec. 18 — generating $60 million in packaged-media revenue.
The reverse strategy was deployed in 2019 for the Jumanji: The Next Level, which Sony kept in theaters for more than four months following its Dec. 4 debut — generating $800 million in global box office ($45.5 million in disc sales).
“The first Jumanji went in theaters forever,” Vinciquerra said. “We backed up the window. It depends on the film.”
When asked how much Sony theatrical movies would “suffer” in 2021 facing increased home entertainment competition from PVOD and transactional VOD via Warner Bros., Disney and Universal Pictures, among others, in the midst of a pandemic, the CEO wasn’t concerned.
“We don’t think we will suffer, once theaters are open and they have a significant number of their seats to sell. We think will be fine,” Vinciquerra said, adding that the studio had no plans to enter the “day-and-date release business”.
The executive contends that with the current backlog of theatrical titles, when released at the box office the onslaught of content — in addition to a vaccine — will jumpstart moviegoers.
Vinciquerra said its recent animation fantasy release, Demon Slayer the Movie: Mugen Train, is the top-performing box office title ever released in Japan. He said the Chinese box office has rebounded as well.
“Once people feel comfortable to go to theaters, the safety protocols appear to be strong, and the vaccine is in the marketplace, we think theaters will be back [in April or May 2021],” he said. “We’re pretty optimistic.”
Vinciquerra dismissed reports of Wonder Woman 1984‘s weak opening box office last weekend in China as more to do with reviews of the movie than the state of the exhibition business.
He said Warner’s decision to release movies through Max has made it easier for Sony to book theatrical dates in 2021 — and generate interest from actors, creators and directors eager for the box office experience and its impact financially and culturally.
“It’s been a bit of boon for us,” he said. “That actually worked very well for us.”
AT&T has agreed to sell its Crunchyroll anime streaming service to Funimation Global Group for $1.175 billion.
Funimation is a joint venture between Sony Pictures Entertainment and Sony Music Entertainment’s (Japan) subsidiary, Aniplex Inc.
Crunchyroll is an anime direct-to-consumer service within AT&T’s WarnerMedia segment with more than 3 million SVOD subscribers. It serves 90 million registered users across more than 200 countries and territories offeringAVOD, mobile games, manga, events merchandise and distribution.
The combination of Crunchyroll and Funimation provides the opportunity to broaden distribution for their content partners and expand fan-centric offerings for consumers, according to the AT&T-Sony joint release.
“The Crunchyroll team has done an extraordinary job of not only growing the Crunchyroll brand but also building a passionate community of anime fans. Crunchyroll’s success is a direct result of the company’s culture and commitment to their fans,” Tony Goncalves, chief revenue officer of WarnerMedia, said in a statement. “By combining with Funimation, they will continue to nurture a global community and bring more anime to more people. I’m incredibly proud of the Crunchyroll team and what they have been able to accomplish in the digital media space in such a short period of time. They’ve created an end-to-end global ecosystem for this incredible art form.”
“We are proud to bring Crunchyroll into the Sony family,” Tony Vinciquerra, chairman and CEO of Sony Pictures Entertainment, said in a statement. “Through Funimation and our terrific partners at Aniplex and Sony Music Entertainment Japan, we have a deep understanding of this global artform and are well-positioned to deliver outstanding content to audiences around the world. Together with Crunchyroll, we will create the best possible experience for fans and greater opportunity for creators, producers and publishers in Japan and elsewhere. Funimation has been doing this for over 25 years and we look forward to continuing to leverage the power of creativity and technology to succeed in this rapidly growing segment of entertainment.”
“We are excited to embark on this new journey. Crunchyroll has built a world-class brand with a passionate fan-base of over 3 million subscribers, 50 million social followers and 90 million registered users. These amazing fans have helped to propel anime into a global phenomenon,” Joanne Waage, GM of Crunchyroll, said in a statement. “Combining the strength of the Crunchyroll brand and the expertise of our global team with Funimation is an exciting prospect and a win for the incredible art form of anime.”
The transaction is subject to customary closing conditions, including regulatory approvals.
Sony Pictures Entertainment subsidiary Affirm Entertainment will acquire faith and family subscription streaming service Pure Flix, the studio announced.
The SVOD service provides movies and TV shows to viewers in the United States and Canada.
Following the closing of the deal, Pure Flix chief content officer and founding partner David A.R. White will join Affirm and will serve as head of outreach and special projects.
“Pure Flix is a natural fit with our Affirm brand, which is known for its high quality, uplifting, inspirational content,” Keith Le Goy, president of networks and distribution at Sony Pictures Entertainment, said in a statement. “We love creating and sharing stories that are both impactful and entertaining, and the Pure Flix service will enable us to do more of that every day. Pure Flix has done an amazing job building a robust community of engaged subscribers, and we look forward to continuing to grow and delight audiences with well-curated faith and family entertainment.”
“For over 15 years, Pure Flix has strived and succeeded to bring faith and family entertainment to our loyal audiences,” Michael Scott, CEO of Pure Flix, said in a statement. “We are thrilled with the creative opportunities and the ability to reach a broader audience through this agreement with Affirm Entertainment. We want to express our heartfelt gratitude to our longtime Pure Flix supporters as we continue to bring them inspirational and high-quality content in the years ahead.”
Affirm has produced such films as Soul Surfer, War Room, Risen, Heaven Is for Real, Miracles From Heaven and, most recently, A Beautiful Day in the Neighborhood in partnership with TriStar Pictures.
SF Studios, a distribution and production company in the Nordics, Nov. 4 announced the signing of a new home entertainment distribution deal for DVD and Blu-ray Disc with Sony Pictures Entertainment, effective Jan. 11, 2021. The new deal covers feature films and TV series in the Nordic and the Baltic markets.
The agreement covers upcoming Sony Pictures titles such as Ghostbusters: Afterlife, Peter Rabbit 2, Uncharted, the Sony’s Universe of Marvel Characters movies Morbius and Venom 2: Let There Be Carnage, and a third MCU “Spider-Man” film with Tom Holland as the superhero. Other Sony catalog titles include: Once Upon a Time in Hollywood, Blade Runner, Angry Birds, Moneyball, Men in Black, “Outlander” and “The Crown,” among many other new and library titles and TV series.
“We are incredibly happy and proud to have entered this agreement with Sony Pictures Entertainment,” Martin Brandtler, Nordic head of home entertainment distribution at SF Studios, said in a statement. “We are very excited to be working with the Sony team and thrilled to be able to share Sony’s exciting content with consumers in the Nordics and the Baltics.”
This summer, SF Studios announced a new deal with Warner Bros. covering distribution of physical home entertainment products. The new deal with Sony Pictures is another step in this direction. SF Studios and SPE have an existing relationship for theatrical distribution in the Nordics, which includes Sweden, Norway, Denmark and Finland.
“With the existing theatrical distribution arrangement between SF Studios and SPE in place, this is a natural next step between our two companies and is a great partnership to bring our feature and television titles, both current and future hits as well as the power of our library, to the Nordic and Baltic market,” said Louise Emblem, VP of distribution and networks for Nordics and Benelux at Sony Pictures.
Established in 1919, SF Studios has headquarters in Stockholm and offices in Oslo, Copenhagen, Helsinki and London. The company is producing and distributing feature films and TV series as well as providing digital services SF Anytime and SF Kids. SF Studios is part of Nordic media company Bonnier.
Sony Pictures Home Entertainment Oct. 28 reported second-quarter (ended Sept. 30) revenue of $171 million, which was up 6.8% from revenue of $160 million during the previous-year period. Through six months of the fiscal year (ending March 31, 2021), home entertainment generated $490 million in revenue, which is 36.1% higher than $360 million generated during the same period last year.
Sony has generated strong packaged-media and digital sales from Jumanji: The Next Level, Bad Boys for Life, Little Women, Bloodshot, Spider-Man: Homecoming and Flatliners, among others.
As expected, Sony Pictures theatrical revenue nosedived 98.2% to $13 million due to exhibitor shutdowns from the coronavirus pandemic, and Sony’s decision to delay all major box office releases until 2021. The studio generated box office revenue of $715 million in the previous-year period.
The studio released just two new movies into movie theaters in the quarter: The Broken Hearts Gallery ($4 million) and The Last Shift, which generated zero revenue.
By comparison, Sony in the previous-year period released Spider-Man: Far From Home ($1.13 billion); Once Upon a Time in Hollywood ($356 million), The Angry Birds Movie 2 ($125 million) and Overcomer ($33 million).
Sony Pictures Television revenue grew 24.4% to $529 million, from $425 million last year. Ancillary revenue skyrocketed to $145 million from just $6 million last year.
When also factoring in TV productions ($480 million), media networks ($470 million) and intersegment revenue of $4 million, total motion picture revenue totaled $1.81 billion, down about 25% from revenue of $2.42 billion last year.
Sony Pictures Entertainment is combining marketing teams between theatrical, television and home entertainment distribution, with veteran home entertainment executive Lexine Wong assuming a new key role.
The reorganization, which precedes Sony’s fiscal results on Oct. 28, is expected to reduce staff by about 35 personnel. The studio cited the ongoing coronavirus pandemic in part for the changes, including the fact Sony is holding off releasing most major movies until 2021.
Under the management reshuffle, Keith Le Goy, president of networks and distribution, and Josh Greenstein, president of the motion picture group, will jointly oversee studio marketing. Andre Caraco, co-president of global marketing, is exiting after 30 years at Sony.
Wong, previously senior EVP of worldwide marketing for Sony Pictures Home Entertainment, becomes head of global multichannel distribution marketing. She is one of three executives managing Sony’s new U.S. marketing group, along with Paul Noble and Danielle Misher, co-heads of global theatrical marketing. All three report into Greenstein and Le Goy.
Additional flow chart changes have Jason Spivak, EVP of distribution for North America television and home entertainment; Flory Bramnick, EVP of distribution for North America television and ad sales; Adrian Smith, president, domestic distribution for theatrical; Paul Littmann, EVP of distribution for global; Jamie Stevens, EVP of worldwide consumer products; and Jeffrey Godsick, EVP of brand strategy and global partnerships, all reporting to Le Goy and Greenstein.
Because of the coronavirus-induced closure of movie theaters, Sony Pictures has pushed most of its big movies into 2021, including Peter Rabbit 2: The Runaway and Venom: Let There Be Carnage. The studio’s next big wide release is Monster Hunter, scheduled to open in theaters on Dec. 30.