DISNEY CONSIDERING PIVOT FROM THEATRICAL TO DISNEY+
WEEKLY FILM INDUSTRY NEWS DIGEST, UPDATED MONDAY NOVEMBER 23
Disney Mulling Pivot Of ‘Pinocchio’, ‘Peter Pan’, ‘Cruella’ From Theatrical To Disney+ Premieres.
It isn’t clear at the moment whether the films will be offered free to Disney+ subscribers, as with the Pete Docter-directed Pixar film Soul, or for a premium charge as was done with Mulan….The studio is looking at every option, and everything is under consideration and contingency planning, as Disney makes plans to lean in heavily on its direct-to-consumer initiative and towards continuing to build the juggernaut Disney+, whose subscriber numbers brightened up a last quarter that would otherwise have been bleak…
The direct-to-consumer segment has soared this year by 41%, per the most recently reported quarter. Disney+ subscriptions grew to a remarkable 73.7 million as of early October, helped by the Star Wars spinoff series The Mandalorian and the Disney+ PVOD release of Mulan. https://deadline.com/2020/11/disney-plus-moving-pinocchio-cruella-peter-pan-and-wendy-no-theaters-1234619134/
How HBO Max Became ‘Wonder Woman 1984’s’ Best Option
“They’re going to make less money for the greater good of building HBO Max,” said Rich Greenfield, a media analyst at LightShed Partners. “This is putting the long-term future of the company ahead of profits.”
HBO Max is on the pricier side, running at $15 per month compared to the $7 monthly fee for Disney Plus and $9 monthly fee for Netflix’s basic plan. As of late September, HBO Max reportedly had around 9 million subscribers. The budding streamer’s bigger issue, Greenfield argues, is that 70% of HBO customers have access to HBO Max for no extra charge but still haven’t signed up to use it….“It’s far less about driving new subscribers as it is getting people to know HBO Max exists,” he said. “They have people who pay for HBO Max and don’t use it. The whole initiative is getting people over to Max.”
Another reason theaters aren’t outraged is because they’re expected to receive a larger cut of ticket sales in exchange for allowing Warner Bros. to break their theatrical contract. Traditionally, studios and exhibitors split profits 50-50. With “Wonder Woman 1984,” some major circuits are expected to keep an even larger percentage of the revenues. Sources familiar with negotiations said deals haven’t been finalized.
Theater operators were comforted that WarnerMedia CEO Jason Kilar affirmed the company’s commitment to exhibition. “We believe in theaters because hundreds of millions of fans around the world value going to the movies,” he said Wednesday. https://variety.com/2020/film/news/wonder-woman-1984-hbo-max-analysis-1234835650/
HBO Max's 'Wonder Woman 1984' Bet: Wall Street Debates "Grand Experiment"
"This is an unprecedented move for a major Hollywood media company, especially for a $200 million film, and a grand experiment that could have long-lasting implications if successful," Credit Suisse analyst Douglas Mitchelson wrote in a report.
One part of the success equation will be how many subscribers HBO Max, which ended September with 28.7 million subscribers with access to the service, including 8.6 million actual "activations," can add, observers said. Activations are an important metric, because consumers can not only get HBO Max directly from WarnerMedia, but also from pay TV providers when they subscribe to HBO. But that requires them to download the HBO Max app on their smart TVs or other devices. The same is true for customers on AT&T's Unlimited wireless and fiber broadband plans.
Credit Suisse's Douglas Mitchelson called WarnerMedia CEO Kilar’s mention of the 4 million people who saw the first Wonder Woman on its first day of theatrical release in 2017 a way “to help set the narrative on what the company might consider a success."
Mitchelson said the release strategy "clearly shows management, including still fairly new CEO John Stankey and WarnerMedia chief Jason Kilar, making a greater push towards investing in AT&T’s pivot to streaming, one of the company’s key growth initiatives." He added: "We see this as a smart, albeit expensive, strategic maneuver aimed to drive very substantial subscriber acquisition for HBO Max given how starved audiences are for film content, both in terms of converting existing HBO subs (HBO Max has been off to a slow start with only 8.6 million of the 28.7 million eligible U.S. HBO subs taking the free conversion over to HBO Max so far) and adding new subscribers to HBO Max (the 38.0 million total HBO/HBO Max subs are just under 30 percent of U.S. households)."
The Credit Suisse analyst also listed several interesting questions the release strategy creates. Among them: the amount of advertising support the film will receive relative to a normal theatrical release, especially given the likely free marketing given the unusual circumstances; “whether HBO Max implements ‘watch party’ functionality;” whether HBO Max maintains its free seven-day trial period, which “could lead to excess churn of consumers signing up just to watch the movie for free; and whether consumers consider Wonder Woman 1984 “more of an event film given its also being released in theaters versus just the perceived value of a straight-to -streaming release. and whether this value justifies paying theaters in the future for their part in creating it.” https://www.hollywoodreporter.com/news/hbo-maxs-wonder-woman-1984-bet-wall-street-debates-grand-experiment
‘Wonder Woman 1984’ Didn’t Deserve To Be A Sacrificial Lamb In The Streaming Wars
Theaters will get 60-65% of the revenue, as opposed to a normal 50/50 split (or, as is the case with some tentpoles, 65/35 for the studio), meaning that in a skewed way the theaters that are open may benefit more from Wonder Woman 1984 than they did from Tenet in September.
I still think that AT&T is trading lots of money next year (from a conventional theatrical release next summer and post-theatrical revenue streams) for a lot less money now (in terms of HBO Max subscriptions)...Wonder Woman 1984 premiering on HBO Max (concurrently with limited theatrical play) followed by Zack Snyder’s Justice League mini-series and the upcoming Green Lantern Corps. series sometime next year risks turning DC Films, WB’s biggest theatrical brand, into a property associating with streaming. https://www.forbes.com/sites/scottmendelson/2020/11/19/wonder-woman-1984-deserved-better-than-to-be-a-sacrificial-lamb-in-the-streaming-wars/
‘Wonder Woman 1984’ switches to US Dec. 25 theatrical, HBO Max launch; international theatrical moves up
Amid troubling Covid-19 surges in the US Wonder Woman 1984 – the last remaining major tentpole of a decimated 2020 release calendar – will launch day-and-date on December 25 in cinemas and on HBO Max, and debut theatrically in international markets starting on December 16.
The film will be available for one month on HBO Max in the US at no additional cost to subscribers. After that it is understood it will be taken off the platform and continue to play exclusively in whichever cinemas are open. Media reports have suggested that after another month passes, Wonder Woman 1984 will go to PVoD. WarnerMedia sources did not confirm this… https://www.screendaily.com/news/wonder-woman-1984-switches-to-us-dec-25-theatrical-hbo-max-launch-international-theatrical-moves-up/5155064.article
Wonder Woman 1984’ Theatrical-HBO Max Day & Date Release: AMC Boss Adam Aron “Fully Onboard” AMC “has been in active and deep dialogue with Warner Bros” and “atypical circumstances call for atypical economic relationships between studios and theatres.” https://deadline.com/2020/11/amc-on-wonder-woman-1984-amc-adam-aron-responds-1234618460/
‘Wonder Woman 1984’ HBO Max Theatrical Day & Date Release: Independent Cinema Alliance Applauds Warner Bros
“Wonder Woman 1984” - Independent Cinema Alliance (ICA), which reps North America indie movie theatre owners exclaimed their support to the Burbank, CA studio and its plans to keep the Gal Gadot-Kristen Wiig-Chris Pine movie on the release schedule on Dec. 25; this despite the fact that cinemas will be competing with the streaming service for eyeballs.“The film’s ‘pandemic model’—which does not reflect a long-term, formal shift in the studio’s distribution strategies—will ensure that moviegoers across North America will see Wonder Woman in theaters and help save the day for our cinemas this Christmas” reads the ICA release....“We are extremely grateful for the extraordinary and unrivaled support and leadership from our valued industry partner Warner Bros.,”
Universal, Cinemark strike theatrical-PVoD pact
In another major development that impacts the traditional exclusive theatrical window, Universal and Cinemark have struck a deal whereby the studio’s films can launch on PVoD after a minimum 17 days in cinemas, rising to 31 days where a film grosses more than $50m in the opening weekend.
It also means Universal’s blockbusters can go to PVoD after one month in cinemas, should the studio wish to do so. After 17 or 31 days depending on which case applies to a release, the studio has the option to move a film to PVoD, and once that has happened the film may continue to play in cinemas. The arrangement covers Universal and Focus Features titles and kicks off with the release of DreamWorks Animation’s The Croods: A New Age, which is set to open in US cinemas over the Thanksgiving holiday on November 25. Universal is keen to preserve the theatrical prospects of franchise tentpoles like F9 and Jurassic World: Dominion and has pushed those films back to May 2021 and June 2022, respectively.
While the PVoD component of the deal appears well suited for smaller box office prospects, the $50m clause caters not just to expected blockbusters but paves the way for break-outs to earn more in cinemas at the start of their release and trigger the traditional revenue waterfall. It is understood the 31-day clause will also apply to and modify Universal’s separate deal with AMC. https://www.screendaily.com/news/universal-cinemark-strike-theatrical-pvod-pact/5155003.articleHBO Max Lands Amazon Fire TV Carriage Deal, Ending Six-Month Drought
HBO Max Lands Amazon Fire TV Carriage Deal, Ending Six-Month Drought
HBO Max has filled in a major gap in its distribution scheme, setting a deal with Amazon Fire TV to make the streaming service available in more than 40 million U.S. homes, starting Tuesday. The WarnerMedia offering, which debuted May 27, had been activated by 8.6 million customers as of September 30. Most of those are current subscribers of HBO able to access HBO Max at no extra charge. While the early progress of the service has been subdued compared with that of rivals like Disney+, executives at AT&T and WarnerMedia say it is on track or even slightly ahead of internal five-year subscriber projections.
Along with Amazon, HBO Max has lacked a distribution deal on Roku, the other major gatekeeper of streaming. Those discussions as yet have not borne fruit. https://deadline.com/2020/11/hbo-max-lands-amazon-fire-tv-carriage-deal-ending-six-month-drought-1234616182/
Internet Rules Among Issues “Piling Up” For Media Regulators In Biden Era
With the White House set to shift parties in January, powerful regulatory agencies the Federal Trade Commission and the Federal Communications Commission face sweeping issues with big implications for tech and entertainment, from antitrust and privacy to net neutrality, legal immunity for Internet platforms and media-cross ownership.
Curating Internet content, or not, is by far the noisiest issue and the most political. The right and left both have concerns about how social media platforms operate, but diametrically opposed goals: the left wants more aggressive policing, while the GOP now equates curation with censorship. So expect bellowing Tuesday when the Senate Judiciary Committee grills Twitter CEO Jack Dorsey and Facebook CEO Mark Zuckerberg at a hearing on Capitol Hill. The event is titled “Breaking the News: Censorship, Suppression, and the 2020 Election,” which gives an idea of where it’s heading at a time when mainstream social media platforms wrangle baseless claims that Democrats stole the election.
Antitrust and privacy are two other percolating issues. In early October, the House Judiciary Committee’s Antitrust Subcommittee released a 400-page report after a 16-month probe into the state of competition in the digital economy, especially challenges presented by the dominance of Apple, Amazon, Google and Facebook. The tome called the four companies monopolists and asked Congress to, among other measures, change antitrust laws to force them to split off businesses and make it harder for them to buy smaller rivals. The CEOs of Facebook, Twitter, Alphabet as well as Tim Cook, chief executive of Apple, were called in to testify as part of the process. https://deadline.com/2020/11/biden-administration-fcc-ftc-media-policy-issues-twitter-facebook-1234616748/
Cinemark & Netflix Testing ‘Christmas Chronicles 2′
Cinemark and Netflix are testing a one-week run of The Christmas Chronicles 2, starring Kurt Russell and Goldie Hawn, before the pic’s Nov. 25 streaming date. True, not Wonder Woman 1984 big, but it’s a first for a big circuit to completely book a Netflix title (and not on a private theater-by-theater four-wall basis which sometimes occurs).
Cineworld Secures $450M Debt Facility
In a major sign of confidence in the future of theatrical moviegoing, Cineworld Group, the world’s second largest exhibitor and owner of Regal in the U.S., has secured significant additional liquidity that will help ensure its future despite ongoing challenges created by the COVID-19 pandemic. This includes a new debt facility of $450M, while further operational measures will be implemented to deliver enhanced profitability over the long term. In total, measures announced today will deliver over $750M of extra liquidity to support the business, Cineworld CEO Mooky Greidinger said.
Given the uncertainty of the duration of the COVID pandemic, Cineworld has worked with its financial advisors to plan for multiple scenarios. The base scenario assumes a reopening of cinemas no later than May 2021. Under this assumption, Cineworld says it has sufficient headroom for 2021 and beyond.
UK film financiers discuss what investors will be looking for in 2021 Sarah Lazarides:
The trend is certainly towards larger-budget productions, for release on streaming platforms rather than necessarily theatrically. It continues to be a very tough market for films around the £3m ($3.9m) budget mark, as even the traditional financiers in that space, such as BBC Film and Film4, are leaning towards investing in a smaller number of higher-budget productions.
We are seeing a massive shift right now to fully collateralised films. I am in multiple films right now — and so are my friendly competitors — in the$3m to $6m range, with North America and a bunch of other territories pre-sold and the tax credit in place. Now, we are living in a streamers’ world rather than a theatrical world — you have to know there is a market for the films before you spend money. https://www.screendaily.com/features/uk-film-financiers-discuss-what-investors-will-be-looking-for-in-2021/5154971.article
Sony pushes ‘Peter Rabbit 2’ to Easter 2021
Sony Pictures has shuffled its release calendar and pushed back Peter Rabbit 2: The Runaway from January 15 2021 to Easter weekend on April 2 2021. https://www.screendaily.com/news/sony-pushes-peter-rabbit-2-to-easter-2021/5155100.article