Warner Bros. Discovery CEO Eyeing Fall ‘Barbie’ Release on Max Streaming Platform

With Barbie smashing theatrical records on a daily basis, the blockbuster is primed to reach $1 billion in global theatrical revenue just three weeks after its debut. With that strong of a start, the movie’s theatrical window could last well beyond the studio’s “Barbie Summer” marketing campaign, even rivaling Paramount Pictures’ Top Gun: Maverick theatrical marathon at 219 days.

Yet, speaking on the Aug. 3 fiscal call, Warner Bros. Discovery CEO David Zaslav, a champion of the traditional theatrical window, suggested Barbie could reach the Max streaming platform by the fall, after the movie’s higher-margin premium VOD window.

Barbie is really important to us,” Zaslav said, adding that he and the studio continue to embrace the motion picture window enabling Barbie to sell as many tickets as possible to moviegoers before transitioning to alternative distribution channels such as the premium VOD window, lower-priced transactional VOD and packaged media.

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How long that box office window remains open for Barbie remains to be seen. The traditional 90-day window has been shortened to 45 days or less by most studios, with Universal Pictures transitioning some titles into retail channels as soon as 15 days after their theatrical release depending on ticket sales.

“Take it through these windows of economics that have worked forever, and we think work extremely well, and then put it on Max,” Zaslav said. “When it goes on Max, we think it will have a very good impact, and that will be in the fall.”

Apple TV+ Takes Steps to Lift Profile, Including Big Spend on Original Movies

Struggling SVOD service Apple TV+ is reportedly set to spend $1 billion annually on original movies — with conventional theatrical windows — in an attempt to up its game and become more competitive among such higher-profile rivals as Paramount+ and Peacock.

Apple TV+, which reportedly has fewer than 40 million paid subscribers, has struggled out of the SVOD gate, relying on a small content slate of original programming, and avoiding licensing third-party shows and movies, to woo paid subscribers (consumers of Apple devices get a free 12-month subscription). The result has been largely indifference among Wall Street analysts, some of whom scoff at the platform’s lack of content.

Wedbush Securities analyst Michael Pachter contends that despite a major marketing effort around the Apple TV+ launch, which included signing up Jennifer Aniston, Reese Witherspoon and Steven Spielberg for original content, the finished product thus far has been underwhelming.

“It only had a handful of shows at launch,” Pachter wrote in a 2020 note to investors.

But that was then. Now, Apple is hoping to elevate its original feature film aspirations on the backs of studios and exhibitors looking to jumpstart the moviegoing experience among consumers.

The company is looking to partner with studios and for upcoming Apple TV+ releases such as director Matthew Vaughn’s espionage thriller Argylle, and director Ridley Scott’s historical drama Napoleon, starring Oscar winner Joaquin Phoenix as Napoleon Bonaparte, according to Bloomberg, which cited sources familiar with the situation.

Apple TV+, unlike most other subscription streaming video services, has embraced the theatrical window since its inception in 2019. That loyalty was rewarded in 2022 when the streamer’s original movie CODA won best picture, best adapted screenplay and best supporting actor at the 2022 Academy Awards.

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Apple in 2021 paid a record $25 million for CODA at the Sundance Film Festival, yet generated less than $2 million at the box office. The 2021 crime drama Cherry, starring Spider-Man: No Way Home’s Tom Holland, fell victim to shuttered screens during the pandemic.

Apple reportedly eyes the theatrical window as a means of marketing Apple TV+ to consumers similar to the way the Emmy Award winning “Ted Lasso” and “The Morning Show” have done for for the platform’s episodic programming.

As a result, Apple would like to expand its movie distribution (and spending) beyond a few hundred screens to the conventional 3,000+ screen North American debut. Rival Netflix, which in 2021 acquired the Egyptian Theatre in part to appease industry award rules regarding theatrical releases, this year extended an erstwhile non-theatrical release policy to include a 600-screen debut for Glass Onion.

If the company is going to spend hundreds of millions of dollars on a [director Martin] Scorsese movie, it wants to turn that into a cultural event,” according to Bloomberg.

“Film creators strongly believe in theatrical exhibition as a measure of success,” echoes Wedbush Securities media analyst Michael Pachter.

Netflix Leaving Hundreds of Millions of Dollars on the Table With ‘Knives Out’ Sequel Release Strategy

NEWS ANALYSIS — Netflix made waves this year when it announced it would release a handful of original movies with limited exclusive theatrical windows. It was a major move (or concession) for the world’s largest subscription service that has steadfastly turned a cold shoulder to theatrical exhibitors in favor of a “streaming first” mindset.

Netflix’s first major exclusive theatrical release was the Nov. 23 debut of Glass Onion: A Knives Out Mystery, the expensive follow-up to the 2019 box office hit Knives Out, also featuring Daniel Craig as the awkwardly accented detective Benoit Blanc, and elevating Ana de Armas into a global star.

After spending a reported $450 million securing the rights to the sequel and a third movie, it seemed logical Netflix would release the movie in theaters exclusively to recoup some of that spending. But Netflix continues to ignore conventional norms.

Glass Onion was released in less than 700 screens across AMC Theatres, Regal and Cinemark over the Thanksgiving weekend resulting in an estimated $13 million box office. Netflix has not officially released any theatrical financials. While the tally was almost big enough to supplant Disney’s disappointing animated debut of Strange World ($18.8 million), the movie could have likely won the holiday box office outright given a wider release of 4,000 screens.

“Most likely, they did around 25% of what they could have done, so maybe a $60 million opening weekend,” Michael Pachter, media analyst with Wedbush Securities in Los Angeles, wrote in an email.

When asked on the fiscal call about the company’s revised approach to movie distribution, Netflix co-CEO and chief content officer Ted Sarandos quickly reiterated his opinion on theatrical windows. Namely, that Netflix makes movies for its subscribers and prefers they watch them on Netflix.

“I’ll tell you, we’re in the business of entertaining our members with movies on Netflix,” Sarandos said. “So that’s where we focus all of our energy and most of our spend.”

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That leaves Pachter scratching his head.

“Realistically, they probably focused on more urban theater locations where the film would have broader appeal, and likely, some fans drove a ways to get to the theaters,” Pachter wrote. “That extrapolates to $200 million to  $250 million over a normal run in the U.S., double that for global, so $400 million to $500 million total.”

That’s a lot of onions.

CFO: WarnerMedia’s Simultaneous Theatrical/Streaming Release Strategy is a ‘Failed Experiment’

Since the combination of the former WarnerMedia with Discovery into the current Warner Bros. Discovery media company, senior management has taken strides to distance itself from former CEO Jason Kilar’s controversial decision in 2021 to release all Warner Bros. theatrical releases concurrently on HBO Max.

New CEO David Zaslav, who quickly ended the practice this year, has publicly blasted the strategy as shortsighted and ignoring the legacy appeal of the box office and its impact on distribution channels down the food chain.

Speaking Nov. 17 at the Morgan Stanley European Technology, Media & Telecom Conference, CFO Gunnar Wiedenfels reiterated those sentiments, saying Warner Bros. Discovery continues to embrace a direct-to-consumer ecosystem that does not cannibalize existing distribution channels.

“We have seen the opportunity of [the company] as one integrated media platform being able to use all the revenue streams and cash registers in an entire ecosystem. And I think the market has come to that conclusion as well,” Wiedenfels said.

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The CFO said that diverse distribution of content produces diverse data Warner Bros. Discovery can use to better consumer awareness across the media giant’s brands and content. Specifically, Wiedenfels said Warner Bros. Pictures re-embracing a 45-day theatrical window helps monetize movies across myriad channels.

“The idea of collapsing all that into one streaming window is a failed experiment,” he said. “Why would we not be optimistic about certain legacy monetization streams?”

Widenfels says the company’s mission is to eliminate consumer barriers to content, whether that be accessing content through a company app, through Amazon or old school linear TV.

“We’re going to be open to all those forms of distribution … to get the best return for every dollar of content spend,” he said.

Streamers Embracing Theatrical Windows as Market Conditions Force Compromise and Collaboration

Last week at Disney’s D23 Expo and ongoing Disney+ Day (through Sept. 19), the media giant and AMC Theatres announced a special deal affording Disney+ subs special access and $5 pricing to theatrical screenings at the world’s No. 1 exhibitor’s screens, among other perks.

Netflix recently released its remaining original movie slate for 2022, a selection of films that include both seven-day and 14-day theatrical exclusives and concurrent windows. The first theatrical exclusive was A Jazzman’s Blues on Sept. 16.

Warner Bros. Discovery killed the former WarnerMedia’s controversial strategy pushing theatrical releases onto the HBO Max platform concurrent with the box office. It also shuttered producing original movies just for Max, with CFO Gunnar Wiedenfels telling an investor group last week that the abbreviated theatrical window is a relative strategy.

Both Apple TV+ and Prime Video have long valued theatrical distribution as a requisite marketing strategy, with the move earning both streamers Oscar wins (CODA and Manchester by the Sea, respectively) in the process.

“It’s the belief in leveraging all of these various exploitation windows to use our unique position to monetize all of our content as much as possible — as opposed to producing all these feature films for just one streaming windows,” Wiedenfels said.

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So, what’s happening here?

Erstwhile competitors, subscription streaming and exhibitors, are playing nice as both distribution channels attempt to retain and lure consumers in an increasingly fragmented market driven by saturation of streaming services and lingering post-pandemic challenges affecting moviegoers.

“We have a different view on the wisdom of releasing direct-to-streaming films, and we have taken some aggressive steps to course-correct the previous strategy,” David Zaslav, CEO of Warner Bros. Discovery, said on the recent fiscal call.

That involved shelving a planned $90 million Batgirl movie release on Max, among myriad content production halts on the streamer, and extending theatrical runs for The BatmanDC League of Super-Pets and Elvis.

To Michael Pachter, media analyst at Wedbush Securities in Los Angeles, the kumbaya between Disney and AMC underscores Disney’s ongoing commitment to theatrical distribution while also shortening the box office to 45 days for non-blockbuster titles.

“Consumers have been trained that if you have Disney+, why go to the theater, you’re going to get the movie in 45 days anyway,” Pachter said.

So, to make a concession to moviegoers astute enough to realize that waiting a month would get them a major Disney theatrical release on Disney+, Pachter contends the media giant made a deal with AMC regarding movie distribution fees to accommodate charging Disney+ subs $5 to see the movie in theaters.

“Disney has to make a concession to [entice consumers] to go see [the movie] in the theater and give them a discount,” Pachter said. “And I think that’s smart.”

For AMC Theatres CEO Adam Aron, the renewed cooperation between exhibitors and streamers is a win for consumers.

“I have said for years that the consumer’s voracious quest for content allows both movie theaters and streamers to thrive,” Aron said in a tweet.

CEO Chapek: Disney to Remain Flexible on Theatrical/PVOD Window

With the theatrical market slowly emerging from the pandemic era, Disney remains unconvinced about a return to the theatrical-first distribution model for original movies.

Speaking Nov. 10 on the company’s fiscal call, CEO Bob Chapek said that while the pandemic appears to be slowing, consumer attitudes toward the consumption of movies has changed. In the fiscal year, Disney released two theatrical titles, Black Widow and Jungle Cruise, concurrently on its $19.99 Premier Access premium VOD platform. That compared with Mulan, Disney’s first PVOD release, in the previous-year period. Widow generated $60 million in PVOD revenue in the movie’s opening weekend, the only film for which Disney has publicly disclosed PVOD sales.

“We had a number of titles released going to theatrical that will eventually go to Disney+, [and] what we’re seeing is some recovery of the theatrical exhibition market, which is a good thing,” Chapek said.

At the same time, the executive said the company is watching “very, very carefully” different types of movies, including family films, to see how different age demos react to theatrical releases and come back to theaters.

Of the top 12 movies at the domestic box office this year thus far, five are Disney titles, including No. 1 in ticket sales: Shang-Chi and the Legend of the Ten Rings, with $224 million in revenue ($430 million globally). The movie was not released concurrently on PVOD.

“We’re sticking with our plan of flexibility,” Chapek said. “We’re still unsure how the market place is going to react when family films come back with a theatrical-first window.”

He said theatrical movies released this have had a “fairly short” theatrical window in regards to the legacy window period.

“We’re doing that so we can get our films quicker to Disney+, but at the same time see if the theatrical market can kick back into full gear as we prime the pump with [new releases],” Chapek said, adding the studio would announce distribution on a title-by-title basis.

“We’re in kind of a flux and change, still,” he said. “While COVID will be in the rearview mirror, God willing, I think change in consumer behavior is going to be more permanent. So, we’re reading that on a weekly basis.”

Whether that “reading” includes more Premier Access releases and shorter windows from the already abbreviated 45-day exclusive exhibition period will depend on market conditions. The days of coddling exhibitors would appear over at Disney.

“We’re going to do what’s best for our shareholders, ultimately,” Chapek said.

ViacomCBS CEO: Paramount Sticking With Multiple Theatrical Windows

With accelerated access to Paramount Pictures’ theatrical releases driving subscriber growth at Paramount+, the studio might appear eager to shorten the theatrical window to as little as 17 days (three weekends) as Universal Pictures does on select movies.

That was the question posed to ViacomCBS CEO Bob Bakish on the media giant’s Nov. 4 fiscal call. Bakish, who is staking much of the company’s future on streaming, including ad-supported VOD and free ad-supported streaming television (FAST), said the popularity of streaming and a resurging box office underscore the need to apply a multiple-release strategy on theatrical movies.

Paramount is employing the new industry standard 45-day theatrical window on most releases (shortened from 90 days), while mixing in shorter windows for select titles (i.e. A Quiet Place Part II), and concurrent streaming access on Paramount+ for others (Paw Patrol: The Movie).

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A Quiet Place Part II generated almost $300 million at the global box office, including $160 million at domestic screens, while being offered early on Paramount+. Paw Patrol: The Movie generated $128 million globally, including $40 million domestically, while streaming concurrently on the SVOD since its box office debut.

In the third quarter, Paramount deployed three different release models for theatrical titles, including “exclusive premier,” “day-and-date,” and “45-day window.”

“We’re experimenting with a bunch of [release] models on the Paramount+ side based on what we think is best for a specific film, obviously keeping in mind all the constituents involved in that,” Bakish said.

“The reality is, we see them all work,” he said. “So, it’s not a question of moving away one [window] or the other. We’re going to continue to optimize on a per-film basis. We’re definitely not moving off the ’45-day fast fall.'”

Bakish reiterated that the Quiet Place sequel performed well at the box office, despite the pandemic, while also driving Paramount+ subs. The executive said this weekend’s (Nov. 5) theatrical release, Clifford the Big Red Dog, would stream concurrently on Paramount+.

“We think [the] kids and family [market] in this continued COVID time, [that] these films are right for day-and-date release,” he said.

Jeff Shell Upbeat on Concurrent Peacock, Theater Movie Release Strategy

When Universal Pictures released Halloween Kills on the Peacock subscription streaming platform the same time as the sequel’s box office debut on Oct. 15, the move marked NBCUniversal’s ongoing proactive steps to rejigger movie distribution in the streaming ecosystem.

Speaking on the Oct. 28 Comcast quarterly earnings call, NBCUniversal CEO Jeff Shell said the decision to offer $9.99 monthly Peacock subscribers (not $4.99 free ad-supported subs) early access to Jaime Lee Curtis’ return as Laurie Strode and her cursed lifelong battle against Michael Myers, paid off.

“We added a few million more subscribers,” Shell said, adding that the move, coupled with the Tokyo Summer Olympics on Peacock, energized the platform. NBCUniversal gave no updates on Peacock subscriber data, which topped 54 million sign-ups and 20 million paid subs through June 30.

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Kills, which generated $49.4 million to lead all weekend new releases, was the second movie after The Boss Baby: Family Business on July 1 to have a concurrent streaming bow. The latter, a sequel to 2017’s The Boss Baby, also topped its opening weekend box office with $16 million in ticket sales.

Shell said the results underscore the reality that streaming and box office can co-exist without cannibalizing revenue streams. The executive was instrumental in Universal taking a hatchet to the 90-day theatrical window — now releasing some titles on premium VOD just 17 days after their exhibitor debut.

“We’ve seen across all streaming platforms that movies move the dial,” Shell said. “It shows that you can play in two different markets.”

In addition to releasing select titles on Peacock and in theaters at the same time, the SVOD service in 2022 will have exclusive access to all Universal titles four months after their box office debut as part of the studio’s new Pay 1 window distribution strategy.

Shell said he remained “really excited” about the status of Peacock going forward.

“We’ve been in business for just over a year, and we’re already more than a third of where Hulu is now, which is a service that’s been more than decades in the making,” he said.

Notably, Kelly Campbell, former president of Hulu, was hired by Shell to the same position at Peacock earlier this month.

Disney to Bow Remaining 2021 Theatrical Slate Exclusively at Box Office

Disney’s pandemic-era experiment releasing theatrical movies simultaneously at a premium price ($29.99) on Disney+ is done for 2021. In a big win for exhibitors, the studio Sept. 10 announced that its remaining theatrical slate would have a 30/45-day box office exclusivity each movie’s debut.

The remaining 2021 releases include The Last Duel (Oct. 15), Ron’s Gone Wrong (Oct. 22), Marvel’s Eternals (Nov. 5), Encanto (Nov. 24), Steven Spielberg’s West Side Story (Dec. 10) and Kingsman prequel The King’s Man (Dec. 22).

Disney is riding high on the current theatrical success of Shang-Chi and the Legend of the Ten Rings, which has exceeded the studio’s expectations, including topping the domestic box office for a second straight weekend with $35.8 million.

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The studio previously experimented by simultaneously releasing box office releases Raya and the Last Dragon, Cruella, Black Widow and Jungle Cruise as a $29.99 Premier Access add-on for Disney+ subscribers.

Black Widow star Scarlett Johansson is suing Disney over the strategy, alleging breach of contract. Disney said it generated $60 million in Premier Access revenue from Black Widow its first weekend and gave Johansson as piece of that, though the actress alleges the strategy in general undercut her potential compensation based on a percentage of the box office.

Warner Bros., AMC Theatres Agree to 45-Day Theatrical Window in 2022

AMC Entertainment Aug. 9 disclosed it has inked an agreement with Warner Bros. Pictures  for a 45-day theatrical window on the studio’s 2022 new-release movies at AMC Theatres — a shortened window similar to the studio’s existing deal with Regal Cinemas signed in April.

AMC protested last year when WarnerMedia announced it would distribute Warner Bros.’ entire 2021 theatrical slate concurrently on HBO Max. AMC had initially agreed to the concept for the studio’s initial release, Wonder Woman 1984, citing the ongoing pandemic. But the exhibitor’s tone changed when it realized the the box office/streaming strategy was more than a one-off deal.

“It’s no secret that AMC was not at all happy when Warner decided in December to take movies to the home on HBO Max simultaneously with the theatrical release,” CEO Adam Aron said on the company’s second-quarter (ended June 30) fiscal call. “Therefore, it’s especially gratifying that Warner Bros. is yet again embracing a theatrical window. It’s especially pleasing to be working so harmoniously with Warner Bros. once again.”

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Aron said the exhibitor, which struck revenue-sharing agreements with Universal Pictures to accommodate the studio’s expedited move toward retail channels, including PVOD, is in discussions with other studios.

“We actually are in active dialogue with every major studio on this very important topic,” Aron said. “We are hearing considerable support in Hollywood that an exclusive theatrical window is an important way to build big and successful movie franchises. Clearly, though, this whole subject is quite topical. It’s very much a work in progress.”

Indeed, a return to quasi normalcy resulted in AMC generating $444.7 million in revenue, up from just $18.9 million during the previous-year period when the pandemic had most domestic screens shuttered. Through six months of the fiscal year, revenue is down 38.3% to $593 million, from $960.4 million in the same period in 2020. The net loss decreased to $344 million, from $561.2 million. Through the half-year, revenue is down to $911.2 million, from $2.73 billion in 2020.

“AMC is playing on offense again,” Aron said.