Lionsgate Eyeing Consumer-Direct Movie Option While Pledging Loyalty to Theatrical

With studios increasing distribution of select titles direct to consumers in the home while theaters remain largely shuttered worldwide, Lionsgate has dabbled in the PVOD window, releasing I Still Believe to consumers just weeks after its March 12 theatrical debut.

On a May 21 fiscal call, Joe Drake, chairman of the Lionsgate Motion Picture Group, was asked if the studio would consider distributing titles directly rather than through third-party platforms such as iTunes, Google Play, Vudu and Amazon, among others.

Drake, who said Lionsgate remains bullish on the theatrical business model, said the D2C concept, like a lot of the distribution status-quo during the COVID-19 pandemic, is being analyzed and tweaked, while remaining in solidarity with the theatrical window.

“One of the things [Lionsgate] prides itself on is being flexible and agile,” Drake said. “We still believe theatrical is a big driver of our business, and will continue to play aggressively in that space.”

Lionsgate’s first theatrical release is slated for Aug. 21 with horror film Antebellum.

At the same time, the executive said that when the studio sees an opportunity for distributing a movie direct to the consumer, it won’t hesitate. Drake didn’t directly answer whether that would include bypassing existing transactional VOD platforms in favor of Starz or another proprietary platform.

Lionsgate currently releases about 30 movies a year through digital channels, a strategy Drake said the studio would expand, but not at the expense of exhibition partners.

“I don’t think any company has done a better job exploiting niches and opportunities with audiences, and we’ll continue to do that,” he said.

Separately, Lionsgate said it is actively working with credit card companies such as American Express to include free Starz OTT service as part of a promotion. The studio/distributor currently has a Redbox promotion by which new Starz subscribers get nine free one-day kiosk disc rentals at a $5 monthly fee for 90 days.

“We think some of [those] consumer bases [with Redbox] overlap. We think there’s a great partnership there. We’ll continue to talk to almost anybody,” said Kevin Beggs, chairman of Lionsgate Television Group.

Lionsgate expects to generate upwards of 15 million combined Starz OTT, StarzPlay, Spanish-language Pantaya and StarzArabia subscribers by the end of the fiscal year. It ended the quarter with 10 million.

Warner Cautiously Entering PVOD Window

Warner Bros. May 15 dips its toes into the controversial premium video-on-demand waters, releasing previously earmarked animated theatrical release Scoob! directly into homes for $19.99 for a 48-hour rental, or $24.99 for digital purchase.

The movie is the only major theatrical title Warner has thus far switched from the box office distribution direct to home entertainment retail. Other titles such as Wonder Woman 1984 have had their cinema debuts pushed back.

“While we’re all eager to be able to once again show our films in theaters, we’re navigating new, unprecedented times, which call for creative thinking and adaptability in how we distribute our content,” studio boss Ann Sarnoff said in a statement last month. “We know fans are eager to see Scoob! and we’re delighted we can deliver this feel-good movie for families to enjoy while they’re home together.”

Warner is hoping the movie resonates with consumers in the home the way Universal Pictures’ Trolls World Tour did. The sequel to Trolls generated $100 million in revenue, prompting Universal to declare it would revisit PVOD as a simultaneous distribution option with theatrical.

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That announcement caused a firestorm among exhibitors with AMC Theatres (and Regal Cinema) angrily declaring it would no longer screen Universal (or any studio) movies with concurrent digital distribution.

Warner parent AT&T this week sought to head off any controversy with CFO John Stephens telling a virtual investor conference the studio remained firmly behind the theatrical window — for now.

“We’ll learn from [Scoob!],” Stephens told the MoffettNathanson 7th Annual Media & Communications Summit. “We’re interested in new ideas, whatever’s good for consumers, but we’ll continue to work with our [exhibition] partners.”

With theaters nationwide remaining shuttered due to the coronavirus and lack of new-release movies, PVOD money talks. And Warner Bros. & Co. are listening.

AMC Theatres Stock Skyrockets on Amazon Buy Scuttlebutt

Shares of AMC Entertainment, parent of fiscally challenged AMC Theatres, are up nearly 30% in pre-market trading May 11 following news Amazon has been kicking the tires about a possible acquisition.

Amazon’s acquisition interest, first reported by The Daily Mail citing sources, would give the e-commerce behemoth greater control of the global box office. Amazon, unlike Netflix, remains a believer in the theatrical window — a stance some observers contend helped its 2016 movie, Manchester by the Sea, win Oscars for Best Actor (Casey Affleck) and Best Screenplay (Kenneth Lonergan).

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AMC, the world’s largest movie exhibitor, is owned by China’s Wanda Group and is reportedly facing bankruptcy since the chain (with 11,000 screens) was shuttered in March due to the coronavirus. With zero revenue and about $4.7 billion in debt, many analysts believe the chain won’t survive in the post-COVID-19 economy amid social distancing.

Amazon, which reported profit of $2.5 billion in its most-recent fiscal period, has shown interest in non-tech, old-school businesses such as acquiring Whole Foods and the Washington Post.

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In 2018, Amazon (and Netflix) reportedly had interest in Mark Cuban’s Landmark Theatres chain, which ultimately was sold to Cohen Media Group.

Meanwhile, U.K. Prime Minister Boris Johnson just announced new coronavirus guidelines, which include easing lockdown restrictions by July on hospitality businesses such as Odeon Cinemas — which is owned by AMC.

AMC CEO Adam Aron, who remains furloughed along with 600 other executives, has publicly expressed a wish that the chain could be operational by July.

In Georgia, despite Gov. Brian Kemp allowing exhibitors to re-open April 27, most major chains remain shuttered due to new studio movie releases being pushed back and a lack of theater staffing.

Regardless, Michael Pachter, media analyst with Wedbush Securities in Los Angeles, contends the acquisition rumor is just that.

“The price is [would be] $10 billion, not a few hundred million,” Pachter said in an email. “I don’t see Amazon buying the biggest theater chain in the world when they can accomplish the same thing buying a much smaller chain. It just doesn’t make sense.”

Chapek: Disney Sticking with Theatrical Window — For Now

Walt Disney Studios plans to stick with the traditional 90-day theatrical window for all major movie releases, CEO Bob Chapek said from his home on the company’s May 5 fiscal call.

With Universal Pictures causing a maelstrom of controversy last month when it announced it would opt for concurrent theatrical and premium video-on-demand distribution for new move releases after generating $100 million from animated feature Trolls World Tour, Chapek said the results awakened Disney to the reality of alternative distribution — especially during the pandemic and unusual market conditions.

He said any changes to Disney’s theatrical distribution would be done on film-by-film basis going forward, including transitioning Artemis Fowl from the box office to Disney+ on June 12.

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“With changes involving consumer dynamics or certain situations like COVID-19, we may have to make some changes to that [90-day theatrical] strategy just because theaters aren’t open or aren’t opened to the extent that [they’re] financially viable,” Chapek said.

He said that with other major Disney box office releases re-scheduled later in the year or into 2021, the studio “very much so” believes in the 90-day window for major movies.

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Universal’s decision to include PVOD caused major exhibitors such as AMC Theatres and Regal Cinema to warn they would not screen any title being concurrently made available on digital platforms.

Chapek reiterated that Disney has dominated the global box office in recent years with its Marvel, Pixar and Star Wars movies. The studio generated about $13 billion in worldwide box office in 2019, including a record seven $1 billion releases, including latest Lucasfilm release Star Wars: The Rise of Skywalker.

AMC Theatres Threatens to Drop Distribution of Universal Pictures Movies; Studio Responds

The world’s largest movie theater chain is fighting back against NBCUniversal’s plans to release at least some movies simultaneously to theaters and to homes.

On the heels of Universal Pictures’ animated feature film Trolls World Tour generating upwards of $100 million from premium video-on-demand and other digital channels in less than three weeks of release, NBCUniversal CEO Jeff Shell April 28 told The Wall Street Journal the studio would pursue a simultaneous theatrical/home entertainment release strategy going forward.

“The results for Trolls World Tour exceeded our expectations and demonstrated the viability of PVOD,” Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”

AMC Theatres CEO Adam Aron promptly fired off a letter to the studio’s chairwoman, Donna Langley, saying it would no longer screen Universal movies if it turns a cold shoulder to the traditional 90-day theatrical window.

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“This radical change by Universal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment,” Aron wrote in the letter. “Going forward, AMC will not license any Universal movies in any of our 1,000 theaters globally on these terms.”

AMC’s strategy mirrors exhibitor sentiment that has shunned Netflix original movies since the subscription streaming video behemoth releases its movies concurrently with any theatrical distribution.

Aron, along with 600 AMC executives, has been furloughed as the chain saw its business literally shuttered over night to help curb spread of the coronavirus. He said Shell’s comments suggest Universal is moving away from a long-term business model between AMC and Universal.

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Aron said the chain, which remains largely closed despite governors in select states authorizing the re-opening of theaters, would not distribute Universal — or any other studio’s content — globally if they stray away from the “theaters first” doctrine.

The executive said theatrical releases is a segue for future retail distribution, including boosting publicity, positive word-of-mouth, critical acclaim and downstream revenue. Aron said Universal wants to have its cake and eat it too by combining distribution channels.

“[Universal] assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on how its actions affect us,” Aron said.

He said AMC has invested significant time and energy with Universal executives over the past few years trying to figure out a new distribution models that would be beneficial both parties. Aron has previously mentioned helping studios distribute movies on its website and in theaters — the latter through packaged media.

“AMC is willing to sit down with Universal to discuss different windows strategies and different economic models between your company and ours,” Aron wrote. “However, in the absence of such discussions, and an acceptable conclusion thereto, our decades of incredibly successful business activity together has sadly come to an end.”

Universal Pictures, in a statement, called Aron’s letter disappointing. It said the decision to release Trolls World Tour on PVOD was done to offer consumers sheltering in home an alternative entertainment option.

“Based on the enthusiastic response to the film, we believe we made the right move,” Universal said. “In fact, given the choice of not releasing Trolls World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear.”

The studio said it still believes in the theatrical business model and said it has made no comment to contrary. It said it always seeks to make its movies available to as wide an audience as possible.

“We look forward to having additional private conversations with our exhibition partners, but are disappointed by this seemingly coordinated attempt from AMC and [trade group National Association of Theatre Owners] to confuse our position and our actions,” Universal said.

‘Trolls World Tour’ PVOD Release No. 1 on iTunes, Amazon Video

Universal Pictures/DreamWorks Animation’s groundbreaking PVOD release of Trolls World Tour topped digital charts, including No. 1 on iTunes, Amazon Video and Redbox On Demand, among others (through April 12), following its April 10 launch. Financial results have not been released.

The sequel to the 2016 original Trolls movie was released on PVOD for $19.99 on the same day it had been scheduled to debut in theaters prior to the coronavirus pandemic.

With movie theaters shuttered globally to reduce the spread of the virus, studios have either postponed launch dates for tentpole titles or expedited a movie’s retail distribution, including Universal’s The Invisible Man, Paramount Pictures’ Sonic the Hedgehog and Sony Pictures’ Bloodshot, among others.

Disney has said it would debut Artemis Fowl on its branded subscription streaming video platform — the first of several other undisclosed titles.

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“The measures being taken right now are because of the unforeseen circumstances,” Paul Dergarabedian, senior media analyst with Comscore, told Business Insider. “And consumers have an appetite for new content. We are literally stuck at home.”

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, doubts PVOD has much of a long-term shelf life. He says studios cannot recoup production/marketing costs of big-budget movies for $20 to households.

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“One off and unsustainable,” Pachter said in an email. “We have been trained to wait for $5.99 digital rental. [Studios] will scrap the idea once the pandemic is behind us.”

Theater Trade Group Cautions Against Bypassing Traditional Window

Theater owners on March 17 took a swipe at plans by some studios to bypass the traditional theatrical release window and make new films immediately available for home viewing as a means of contending with the closure of theaters amid the coronavirus pandemic.

The National Association of Theatre Owners (NATO) issued a statement blasting the practice, although the group was careful not to blame the studios but, rather, “speculation in the media that the temporary closure of theaters will lead to accelerated or exclusive releases of theatrical titles to home streaming.”

“Such speculation ignores the underlying financial logic of studio investment in theatrical titles,” the NATO statement said. “To avoid catastrophic losses to the studios, these titles must have the fullest possible theatrical release around the world.

“While one or two releases may forgo theatrical release, it is our understanding from discussions with distributors that the vast majority of deferred releases will be rescheduled for theatrical release as life returns to normal. When those titles are rescheduled, they will make for an even fuller slate of offerings than normal as they are slotted into an already robust release schedule later in the year.”

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Universal Pictures on March 16 announced the immediate release of its current theatrical slate into home entertainment distribution channels, at a premium price of just under $20. Movies include The Invisible Man, The Hunt and Emma, among others.

The DreamWorks Animation Trolls sequel Trolls World Tour, distributed by Universal Pictures, will now hit theatrical and home entertainment channels on April 10. Titles will be available on assorted digital channels for a 48-hour rental period at $19.99 each.

A day later, on March 17, Variety reported that Warner Bros. is prepping the early (March 24) transactional video-on-demand release of Harley Quinn: Birds of Prey, featuring Margot Robbie as the DC Comics antihero. The film was released theatrically less than two months ago.

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The NATO statement noted that “as the virus takes hold in different regions at different times and in varying degrees of severity, people and public health officials are grappling with decisions about when to close public-facing businesses and when to restrict personal activity. As with other businesses that serve large groups of people, movie theaters have faced voluntary and mandated restrictions and closures. The majority of movie theaters have now closed.

“This industry will continue to meet its responsibilities to the public and will abide by public health mandates and adapt to local conditions. Our partners in movie distribution have postponed major new releases in response to the Coronavirus situation in markets around the world. Other titles beyond the immediate horizon have not changed their release dates.”

View the complete NATO statement here

 

Iger: Disney Sticking to 90-Day Theatrical Window

Late last year, Disney CEO Bob Iger said the company was considering steps to expedite access to select studio box office titles into retail channels — a move that could shorten the venerable 90-day theatrical window for new-release movies.

No sooner had he said that, Iger reiterated his ongoing support affording exhibitors such as AMC Theatres and Regal exclusive access to movies upon release.

“We have a studio that is doing extremely well and a [release window] formula that is serving us really well in terms of its bottom line,” he said last November.

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Indeed, any mention of shortening Disney’s massive theatrical gravy train for the sake of earlier access on DVD/Blu-ray Disc and digital, seemed shortsighted.

Disney ended 2019 with seven movies each generating more than $1 billion at the global box office. The studio ended the previous fiscal year with nearly $10 billion in ticket sales.

Regardless, the seeds of doubt had been sowed, prompting one analyst on the Feb. 4 Q1 fiscal call to ask Iger if he would “recommit to the theatrical window.”

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“The theatrical window is working for this company, and we have no plans to adjust it for our business,” Iger responded.

With upstart Disney+ streaming service getting every original studio release, domestic exhibitors saw a near 7% decline in tickets sold in 2019 compared to 2018.

Iger suggested the analyst’s question was a reflection how other studios are positioning their films and distribution business.

“We’re not the only movie company,” he said. “I suspect that [questions about the window are] not due to us or either a lack of conviction on our part or any suspicion that we might not be telling the truth. It’s working for us, and we have no plans in the foreseeable future to change it.”

 

Report: Netflix Has 33 of IMDb’s Top 250 Movies, Beating Disney+, Amazon Prime Video, Hulu and HBO

Netflix’s foray into original feature-length movies has often been overshadowed by the company’s disdain for the traditional theatrical window — a stance that has left hundreds of millions of dollars in box office revenue on the table and generated resentment from exhibitors and industry traditionalists.

While Netflix’s original TV series dominant industry awards, the quality of its movies remains subjective, according to observers such as KilltheCableBill.com, which set out to determine how the SVOD behemoth’s movies compare in quality to its streaming and premium pay-TV competition.

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Netflix and Prime Video won their first Oscars in 2017 with Iran’s The Sales man and Manchester by the Sea, respectively. Netflix’s Roma won Best Director and Best Foreign-Language Film at the most-recent Oscars. The streamer again has high awards hopes for Martin Scorsese’s mobster flick, The Irishman.

Citing co-authored research from Mindnet Analytics, the website found that Netflix had 33 of the Top 250 movies ranked on Amazon’s IMDb.com site. While that translates to just 13% of IMDb’s tally, the percentage tops Prime Video (9%), Disney+ (5%), Hulu (4%) and HBO (1%).

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The data is interesting considering Disney’s current stranglehold on the box office and aggressive move to reclaim its theatrical content from Netflix for Disney+. The 22 movies on Prime Video don’t include feature-films available for rent on Amazon Instant Video.

The report determined that the HBO movie portfolio rated lowest in quality, according to IMDb.

Apple Bowing Original Movies Theatrically Ahead of Streaming

As Apple is spending Netflix-like billions on original programming and movies, it has no plans to emulate the SVOD pioneer with  a non-theatrical window.

The media giant reportedly plans to release original movies in theaters exclusively for three weeks ahead of any distribution on the pending Apple TV+ streaming platform.

Apple’s nod to the traditional 90-day window mirrors Amazon Studios, which released Manchester by the Sea in theaters in 2017 before streaming it on Prime Video. The movie went on to win two Oscars, including Best Actor for Casey Affleck.

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Apple is following the traditional Hollywood movie distribution playbook to better leverage cooperation from producers and directors, according to The Wall Street Journal, which first reported the strategy.

Apple video executives include Zack Van Amburg and Jamie Erlicht, who report to services chief, Eddy Cue.

Netflix had planned to release big-budget mobster movie, The Irishman, from director Martin Scorsese exclusively in theaters, but negotiations between the SVOD leader and exhibitors reportedly broke down.

The streamer has steadfastly opted to stream original movies concurrently with any theatrical release — a strategy that results in boycott from most major exhibitors.

Apple’s pending theatrical strategy includes the 2020 bow of Sofia Coppola’s On the Rocks, which stars Rashida Jones as a young woman reconnecting with her eccentric father (Bill Murray).

The film marks Coppola’s first collaboration with Murray since the 2003 indie drama, Lost in Translation, which earned Coppola an Oscar for Best Original Screenplay.

The streamer is also readying documentary, The Elephant Queen, about an elephant leading her herd across Africa.