Those who desire theater primacy in the rollout of feature films have strong evidence for their case. “Godzilla vs. Kong” will soon hit $100 million. In 2019, “Godzilla: King of the Monsters” reached $110 million (all grosses here will be for U.S./Canada release). “The Conjuring: The Devil Made Me Do It,” also Warner Bros. very much in line with what the eighth title in the extended franchise should have done. Though disappointing at $53.5 million, Disney’s animated “Raya and the Last Dragon” has accumulated an ongoing gross six times better than its opening despite PVOD availability. Initially, Cinemark made no deal to play and Regal was still closed, diminishing initial results.
But those films share something else. All were available for home viewing in the U.S. the same day they reached theaters. Indeed, five of the six biggest grossing titles this year, and six of the top eight, had that option.
All box office analysis at the moment needs to include uncertainty. But let’s deal with some givens. Theaters are rebounding, though still at less than half of normal total grosses. At the same time, all of the top five studios except Sony now have streaming services. Cash-rich Amazon and Apple do as well, and are stepping up production with uncertainty of their commitment to theatrical release. Premium VOD has become a common vehicle, including from opening day in certain cases.
Theater play elevates films. Still, the studios that provide them to theaters are transitioning to a long-term battle for home platform prominence. Exhibitors are retailers and tend to resist change. They fought TV, cable, video cassettes, streaming. They have survived all. But the competition has never been this acute. It comes in a period where even before the pandemic ticket buying was declining, and the most optimistic projections now suggest getting to just 85 percent of 2019’s totals in 2022 is doubtful.
Theaters know their studio “partners” adapted to COVID conditions. With their vast stake in home platforms, it’s a long-term issue. One trend started last year — titles intended for theaters skipping them entirely, either by streaming on their sites or selling to others — has not ended with theaters rebounding. Top titles are opening closer. But it is unclear whether they will hold as well. And the increase of films skipping theaters for home play is an ongoing trend.
Meanwhile, confusion abounds among consumers. Unlike past patterns, distribution no longer operates under one accepted calendar for playoff. Even those films that delay home viewing may lose patrons under the assumption they soon will have it.
Exhibition refused to budge over windows for years, insisting on at least 75 days before PVOD, 90 for standard VOD. Looking beyond 2021, they now have accepted three weeks until PVOD, with 45 days looking as the new normal for streaming. But had they compromised pre-COVID, they could have done better. It would be a smart move to think outside the box and work with studios for mutual benefit.
Here’s a radical proposal to throw out for thought: Theaters are playing well with films that have PVOD (at least $19.99) same day release. They work out PVOD revenue participation, perhaps even exclusively through exhibition-based sites. They have some period — perhaps at least 30 days — before these films are offered for free to streaming subscribers. Studios pledge to release all their films in theaters. The scale for film rental would be substantially reduced, determined in part by PVOD participation. Some event films still might have windows, at normal film rental.
The key here is for both sides to come to a consensus that the survival of theaters matters, but that exhibition takes into account that they no longer are the sole entry point. For consumers, it satisfies both those who want theater play as their choice, as well as those who prefer home options.
Would this work? Of course it’s not clear. But theaters need to understand that studios unchecked will continue to pursue alternatives to them. It makes sense to find some way to make co-existence work.