In 2011, film The Universal Pictures studio has announced that it will carry out a test: it will release its new film, Heist Tower, on video on demand just three weeks after its theatrical release.
The move was doomed to failure. The cinemas were furious. AMC, Regal and Cinemark ad that if Universal did the test, they just wouldn’t play the movie. Chastened, Universal capitulated and the “test” never took place.
Things have changed. Over the past year, theaters have had zero leverage and studios have been able to conduct the streaming experiments they’ve been eyeing for ten years. But far from ushering in a brave new era of home entertainment, these experiences have actually shown Hollywood studios that, yes, they still need theaters – at least if they want to make blockbusters on a global scale that make money. a lot of money.
The studios’ responses to the pandemic have varied. Some, devoid of popular streaming platforms, have made deals with companies that do: Paramount sold Coming 2 America to Amazon for $ 125 million; Sony sold Tom hanks Doggy style to Apple TV + for around $ 70 million.
Others have taken advantage of the pandemic to release films on their own platforms. Disney, for example, has produced a glut of films on Disney +, including Mulan, Soul, and Raya and the last dragon. AT&T, which owns Warner Bros., has released several films, such as Wonder Woman 1984 and Godzilla vs. Kong—In theaters concurrently with its HBO Max streaming service, and plans to continue through 2021 with Mortal combat, Dune, and The matrix 4.
Filmmakers have aligned themselves to criticize this practice: Denis Villeneuve, director of Dune, publish an editorial in Variety claiming that the move shows “absolutely no love for cinema, ”While Christopher Nolan mentionned that “some of the greatest filmmakers in our industry and the most important movie stars went to bed the night before they thought they were working for the biggest movie studio and woke up to find they were working for the worst streaming service. “
It’s not hard to see why streaming would be attractive to studios: if you show a movie directly to people, you don’t have to share your profits with the theater owners. “The studios have been trying for about 10 years to carry out this experiment, but they are not allowed to do so because the cinemas boycott their films if they do something like this,” explains David Hancock, film analyst at Omdia. “They invented experiments for ten years that they could not do.”
Although these experiments gave different results for different films –Doggy style did well, Raya and the last dragon flopped– there was a takeaway. Hollywood still needs cinemas, and it needs us to come back in droves when they reopen across the world. Omdia’s research shows that video on demand accounted for $ 1 billion in consumer spending globally in 2020, which is paltry compared to the $ 30 billion lost to cinema over the same period.
For big blockbusters, streaming just can’t match cinemas. The new James Bond film, No time to die, is instructive here. The film, which will be distributed by MGM in America and Universal worldwide, has been postponed several times due to the pandemic. In October 2020, rumors (which MGM has denied) began to report that the studio was buying the film on streaming platforms for $ 600 million; no one bought it, says Hancock, because it was way too expensive. It is debatable whether streaming will ever bring in enough revenue to make blockbusters like Bond, which could gross over $ 1 billion, a viable proposition.