Could Streaming Be The Only Way To Watch New Movies?

The film industry, streaming, and the distribution of new movies are seeing a strange shake-up in this ever-evolving time.

You probably can recall the last film you saw in theaters. You might even recall the film you were most excited to see in theaters before nonessential businesses shut down. And since then you may have watched some films, whether they be old or new. Some film companies have taken different approaches to release their new movies since March 2020. What we know is there’s still a lot to consider about film distribution’s future.

World Tour Becomes World History

Many might find it bizarre and humorous that we might be studying the Universal Films picture Trolls World Tour in future film classes. Sounds like a bad joke, right? One day it could be a reality. Universal Pictures went head to head against AMC Theaters and Regal Cinemas and simultaneously released Trolls World Tour for theaters and home rental on video on demand. This move caused AMC and Regal to claim they would not distribute films by Universal Pictures. Universal Pictures made a bold move and it appears to have paid off.

Universal reported they made over $100 million in rental fees from releasing the movie for home rental. The first Trolls movie made over $150 million. While it did earn more, theaters typically take around 50% of ticket sales for themselves, they are providing a film-going experience and distributing the film after all. After all, is said and done Universal only took in $77 million after box office fees. If they’re distributing digitally they’re cutting the middleman out completely.

Some question how this could affect Universal’s relationships with movie theaters. Most movies make a majority of their highest earnings on opening weekend. If a movie performed well then the theaters did well also.

Now that people can sit at home and see a brand new movie what does that mean for the future of film? Universal’s other films that were out at the same time took in tens of millions of dollars in rental fees, too. It seems like a lucrative alternative to going through theaters. However, there is some uncertainty about video on demand releases of new films.

Disney's Mulan Remake Controversy 

One of the biggest stories in the film last year surrounded Disney’s live-action remake of Mulan. The movie was set to release in theaters but opted for a Disney+ release instead. The catch? The rental fee was $29.99. This put many people off on the idea of renting the movie. “Why am I spending money on a subscription fee and a movie rental?” many Disney+ subscribers asked.

The idea of paying more money for a new movie on top of the numerous subscription fees turned a lot of people off. However many still watched the film. But how many exactly?

Well according to some sources it performed very well in Asian and European markets. $5.9 million across 9 different European countries, the highest-grossing weekend in Singapore and Thailand, and another $1.2 million in Taiwan. These sound promising, but where are the domestic numbers? That question has some scratching their heads.

You can see the international box office numbers for Disney’s Mulan (2020) sitting at almost $67 million worldwide. This would suggest it broke even on its production budget. However, the domestic box office numbers are not exactly clear-cut.

As a rule of thumb, large film productions need to earn two and a half times their production budget to turn a profit because of the marketing costs. Marketing costs aren’t included in a film’s reported production budget. Taking this rule into account Disney would need approximately $167.5 million to turn a profit on Mulan (2020). Another point to consider is Mulan (2020) was set to release in late March 2020 and was pushed back to early September.

Why is this important? Well, marketing costs likely increased for Disney because of the film’s delay. Before the pandemic, they were advertising the film in preparation for its original release date. Consequently, before its September release date, we were bombarded with another wave of advertising for Mulan (2020). The amount of money Disney needs to break even could be even more than that $167.5 million figure previously mentioned.

Considering Disney has not stated exactly how much money it made, some question the success of the film. Mulan (2020) did encounter some controversy with it being filmed in the western Chinese state of Xinjiang, which has been in the news for the treatment of its native Uyghur population and lead actress Yifei Liu’s comments on the protests in Hong Kong. This prompted an international boycott. Until the numbers are reported by Disney none can say how successful the boycott was. Some are speculating the movie’s failure to turn a profit.

How Much Profit Does a Digital Release Bring In?

Profit is a major factor in our potential video-on-demand renting future. Hollywood is all about money after all. How will digital distribution pan out for production companies and their potential profits? Right now the answer is mere conjecture. Many have been confused by this model. The aforementioned Trolls World Tour and Mulan (2020) were available for video-on-demand streaming for $19.99 and $29.99, respectively. Universal is claiming they’ve turned a profit and some sources are estimating Disney made $260 million domestically.

However, their exact figures haven’t been reported. What adds to the confusion are other films released during the last year. Disney’s Soul released over the holidays with no mention of a rental fee, just the prerequisite Disney+ subscription was enough. Warner Bros also released Wonder Woman 84 on the same day via HBO Max, plus future Warner Bros films will be distributed through HBO Max. There is still no mention of a rental fee. How do these movies turn a profit?

Soul skipped the theaters but movies like Wonder Woman 84 and Tenet opted for a theater run. Or an attempt at that. Wonder Woman 84 director Patty Jenkins has addressed concerns the film won’t profit. Wonder Woman 84 reportedly made $131 million on a $200 million budget. Warner Media owns Warner Bros and HBO Max so the licensing of Wonder Woman 84 will only earn them profit in the form of new subscribers. There is a 17 movie deal that will bring Warner Bros 2021 films to HBO Max for 31 days and see the movie's release in theaters on the same day. The film will stay in theaters after 31 days and ride out the rest of its time in theaters.

Tenet director Christopher Nolan, in short, disagrees with this plan. He called HBO Max the “worst streaming platform” and said this will cause dysfunction in the market. Despite the current environment, a third Wonder Woman film has been green-lit.

The Possible Future for Delayed Films

Delayed films face an uncertain future and are creating some major concerns. The latest James Bond spy action-thriller No Time to Die was slated for a 2020 release but is currently in limbo. MGM Studios can’t seem to cut a deal. There were talks of MGM approaching streaming outlets and requesting $600 million to give Netflix the rights. As a result of the high asking price, those offers were turned down and MGM claims that wasn’t what happened.

You can find lists of films that delayed their release dates until this year. A few are in limbo and many have confirmed release dates, albeit nearly a year after their proposed launch. One thing to note is some of these lists don’t mention how the movies will be distributed leaving us to wonder if it’s going to be a digital-only, digital, and theater hybrid launch, or the uncertain wait for theaters to open again at full capacity. 

All in all, 2020 may be the year that theaters see their irrelevance come about. We can only speculate how the movie-watching experience is going to evolve from here. Before last year, it was unheard of for a movie to be released digitally and in theaters simultaneously. Only tv shows and films produced by a streaming service saw a digital-only distribution and little or no run in the theaters.

Contracts will have to be renegotiated and profit will probably be defined differently if the future of new film distribution is purely digital. New hurdles will be faced and we’ll see how the industry tries to bounce back from an extraordinary and difficult time.

Maybe the home theater will earn a Renaissance of sorts. Therefore attempting to mimic the big screen and large surround sound speakers of cinemas past will suddenly become a national pastime again. I know I’ll be grateful to save some money on my popcorn.