Consent Decrees, The End of Studios and Other Movie News

A quick roundup of some interesting news and commentary from the last couple weeks.

Audiences Still Prefer to See ‘Tenet,’ ‘Wonder Woman 1984’ in Movie Theaters, but Most Would Be Fine Watching at Home

Lots to unpack here, but the gist is that people are willing to wait to watch some of the most high profile films Hollywood will eventually release at home instead of rushing out to see them in theaters. That’s dependent on there being a 90-day window, but even so it can’t be good news for exhibitors who are still hoping those titles will get things started again. Adding insult to injury, another survey indicated people weren’t endorsing a government bailout of theaters.

Mad School GIF - Find & Share on GIPHY

Judge Agrees to End Paramount Consent Decrees

It seems to me that the belief that there’s nothing to worry about with ending this rule is a bit naive, of a kind with the opinion that mergers are good for consumers when they almost never are. That the rule is outdated is true, but mostly because the distribution platforms have changed, not because there’s no longer a need for regulations that keep any one company from exerting too much control over an industry. But it’s in-line with the Trump Administration’s overall goal of eliminating as many rules and guidelines as it can find.

Cosmo Kramer Chaos GIF - Find & Share on GIPHY

Hollywood Faces the Hardest Truth: Movies Are No Longer King

Anne Thompson absolutely nails the trends happening in the industry right now, including the quote about how movies like Sleepless In Seattle would go straight-to-streaming now and not have a viable future in theaters. Theaters’ inability to adapt over the last decade has put them behind the 8-ball, and the next couple years will show if there’s a future for them. The continued rise of streaming during the pandemic period shows people who might have at first been reluctant or put a cap on how many services they’d subscribe to are getting over that and becoming more familiar landscape, which should also be worrisome to theater owners. Also see Ben Smith’s article about the shift in power from quirky executives to more business-minded leaders.

Movie Theater Popcorn GIF - Find & Share on GIPHY

Male Film Critics Still Outnumber Female, All Critics of Color Remain ‘Dramatically Underrepresented’

Wait, you mean to tell me that entrenched hiring and staffing patterns have an effect on which topics are covered and therefore which audiences are or aren’t represented? Fetch me my fainting couch, I’ve got the vapors…

Mad Chris Gethard GIF - Find & Share on GIPHY

Snapchat Unveils ‘Snap Minis’ With Coachella, Atom Tickets; Announces Other Developer Tools, Games and Partners

Interesting way to get movie trailers and ticket buying into the app, which still has significant market share despite the rise of TikTok and other factors. This could be a way for people to buy tickets as theaters reopen without having to exit the app they’re already using, but I’d be lying if this didn’t remind me a little of the period where Facebook encouraged companies to build mini-apps within that network in an effort to keep them there. This execution has the same advantages and the same potential drawbacks for both users and developers.

Chevy Chase Reaction GIF - Find & Share on GIPHY

Hollywood’s Fame Scholar Is Reinvigorated

If you don’t stan Karina Longworth, I’m not sure we can hang out.

Disney Carves Out An Owned Future With Mulan

None of this is that surprising, tbh.

In response to the (largely indefinite) closure of movie theaters around the country because of the ongoing Covid-19 pandemic, studios have generally taken one of three potential alternative paths:

  1. Punt: Just keep kicking the release date down the road, hoping that the situation improves by then and the movie can be sent to theaters.
    1. EX: Wonder Woman 1984, Tenet, Fast & Furious 9, Black Widow
  • PVOD: Accepting the reality that not everything can be held for a later date, some titles have been sent straight to VOD, with premium price points to make up for the loss of theatrical revenue.
    1. EX: Scoob!, The High Note, Bill and Ted Face The Music
  • Streaming: Whether it’s an owned platform like Disney+ or a third party like Amazon or Netflix, some titles have been handed off to streaming because the economics make more sense or it fills in some other part of an overall strategy.
    1. EX: Artemis Fowl, Without Remorse, Hamilton, The Lovebirds

With no end in sight for the Covid-19 outbreak it’s only logical studios would seek out some alternative release plan. They are in the production and release business and if they need to they will seek alternative distribution methods. That’s similar to how changes in the retail world as a whole has led to the rise in direct-to-consumer businesses and more.

Add to that the fact that so many of 2020’s planned movies have been delayed by several months – in some cases up to a year – that the 2021 release schedule is backed up all the way to the Tri-State interchange, limiting any studio’s options.

This Did Not Go Over Well

The reaction from theaters has been predictable, beginning with AMC Theaters’ promise to never play future films from Universal after it sent Trolls World Tour to PVOD in April. Most recently, those two parties announced a new deal wherein future films would have shorter theatrical-to-home windows. Smaller theater owners have also had time to express their displeasure while other large chains like Cinemark and Regal have offered their own skeptical takes.

While certainly unprecedented, the deal between Universal and AMC – which has reportedly been offered to other studios – doesn’t break many existing distribution norms in function, even if the details are largely new. The “home” release will still take advantage of the platform infrastructure developed and offered by established players like Apple, Amazon and others.

Still, exhibitors kept holding out hope that one or both of two titles – Tenet and Mulan – would provide the light at the end of the tunnel they needed, offering an attractive film that audiences would, however reluctantly, come back to theaters to see after months at home.

Alternate Futures

Those hopes faded a bit when Warner Bros. announced a unique release plan for Tenet that involved the movie coming out overseas in late August and then in whatever U.S. theaters are available over the Labor Day weekend in early September. That’s bad news for domestic audiences and exhibitors (but great news for Torrent software providers) who are essentially being pushed down the priority list and who may have one of the year’s most secretive plots spoiled for them.

Car Chase Action GIF by Regal - Find & Share on GIPHY

They diminished almost entirely last week when Disney revealed it was creating its own fourth option for the September 4th release of Mulan on Disney+. The release is notable for at least two reasons:

First, it mashes up a couple of the existing paths to create something wholly new. While many media companies have worked to create their own streaming platforms in the last year, those have largely been subscription services, and once you subscribed you had access to everything. Even tiered services like Peacock didn’t charge you extra for one specific title, you might just have to upgrade to the next membership level.

This works differently, essentially creating a PVOD service within the existing subscription framework. If you’re not a member, you don’t have access to the PVOD content, meaning the true cost of the rental is the $29.99 list price plus at least the $6.99 monthly fee. In other words, the cover charge you paid at the door doesn’t grant you entrance to the Champagne Room.

Existing platforms like iTunes, Amazon and others should be watching this as closely as theater owners have been over the last several months. If Disney – or any other company – can find some success in this way they no longer become the one-stop, producer-agnostic shop they’ve been to date.

Second, it creates a whole new marketing paradigm. The campaigns for movies like The Lovebirds, Scoob! and others have changed, often mid-stream, when their release futures were altered, with the call-to-action shifting from “In theaters on…” to “Watch it at home on…” Even still, the expected action on the part of the consumer was only a single one. Instead of “buy a ticket” it was “subscribe” or “download.”

Whenever Disney launches a new phase of Mulan’s campaign, it will have to communicate a two step process: 1) Subscribe to Disney+, then 2) Pay $29.99 for this single movie. That will be a little harder to get through audiences and could create a fair amount of customer confusion when the movie launches as people are caught unaware they have to make an additional payment to watch the movie.

What’s Next?

That the reoriented campaign for Mulan wasn’t ready at the same time the announcement was made is slightly surprising since Disney is masterful at coordinating initiatives to take advantage of a moment.

Warner Bros. not having a new phase of Tenet’s campaign is equally surprising, though a bit more understandable given how, at least for U.S. theaters, it’s still largely contingent on a best case scenario being available. It is, in other words, less concrete and so WB is likely holding its fire.

On top of those, there are still a number of high-profile titles that are supposedly coming to theaters later this year.

The New Mutants is, against all odds, still scheduled for late August.

Wonder Woman 1984 is still scheduled for late September, but at this point there’s almost no time to mount a campaign for the movie even if that date holds.

Black Widow and No Time To Die are still scheduled for early and mid-November, which is slightly more realistic but becomes less so with each passing day.

The campaigns for those last three have been paused for a number of months now, and would have to fight through the noise of the daily news cycle – a cycle that includes 1,000 or so Americans dying each day and a ramping up presidential election – to get people’s attention. That adds to the odds some alternative will be sought, as it may not be possible to get a critical mass of awareness that overlaps with the segment of the population willing to participate in mass entertainment without a Covid-19 vaccine, much less a cohesive testing and tracing strategy.

Which option is chosen will be determined by what each studio thinks it can manage as it seeks to make a wide range of stakeholders, each with competing priorities, happy with the proposal.

Theaters Want to Open, But Who Will Go To The Movies?

Movie tickets? In this economy?

The latest delay – this one essentially indefinite – to Tenet seems to have unleashed a wave of pent up frustrations and other emotions.

That announcement was made by Warner Bros. earlier this week following news that governors in California and elsewhere were enacting new restrictions on public gatherings as Covid-19 cases in their states spiked yet again. Movie theaters not being allowed to reopen were among those restrictions as those governors tried to keep things from getting even worse, throwing out plans by those theaters to get people back in the door to see Tenet or Mulan, both of which were supposed to finally come out later this month after multiple delays.

Following WB’s update, NATO chief John Fithian has stated his opinion, on behalf of the theater owners he represents, that studios need to just pull the trigger already and start releasing movies again. Waiting for a vaccine to be available to the entire U.S. population is foolhardy, he says, so studios should focus on getting movies onto screens in parts of the country that aren’t on lockdown. That option allows the studios to make some fraction of the money they otherwise would have and supports the theaters that, like many businesses in the country, are struggling and face an uncertain future.

Still, Tenet seems to be the north star by which the entire film industry is being led at this point. While WarnerMedia CEO John Stankey has said that movie will definitely receive a theatrical release (of some kind), other films are going to be punted to premium VOD and other platforms. And AMC Theaters has delayed opening its locations until mid- to late-August, apparently now pinning its hopes to Mulan.

Fithian’s argument makes some amount of sense. There is no nationwide stay-at-home order in place, so theaters in some areas might be able to operate, though maybe still not at full capacity. And studios may begin to take his advice as we near what may be the tipping point where the complete erasure of the 2020 theatrical landscape shifts from possibility to probability.

Even if studios do capitulate and restart the exhibition industry, the question remains who among the audience population will want to run the risk of going to the theater in the middle of a pandemic that is speeding up its rates of serious infection, not slowing down. That reality has been at the core of the (sometimes heated) discussion around reopening schools across the country, something that seems to be up to the local officials and community. It has also led colleges to drastically alter the plans they had in place for fall semester, introducing more remote options and in some cases actively encouraging students to stay away from campus. The MLB and NBA are opening their abridged seasons either in a single location to reduce the risk of infection or play in empty stadiums.

On top of that, there’s the question of who can and will be able to afford to do so.

At the end of 2019, the average movie ticket cost $9.37.

To put that in perspective, the U.S. minimum wage is $7.25/hour, meaning an adult in a family of four would have to work five hours just to afford taking everyone to the theater. Just under two percent of the U.S. population made the minimum wage or less in 2019, but those percentages go up for part-time workers as well as those in the hospitality and service industries.

More immediately relevant is the pandemic-influenced situation we find ourselves in. There are various numbers available as to the total number of people who are currently out of work, but it’s tens of millions. New unemployment assistance claims have topped 1 million for 17 straight weeks, an unheard of streak in recent history. And despite a new White House-backed ad campaign urging people to get out there and “Find Something New,” workers have made it clear the jobs aren’t even out there to be seized. So many companies have continued to lay off or furlough current employees, few are actually hiring. That’s reflected in the most recent figures showing new claims rose after a few weeks of slight declines.

To date those unemployed individuals have been able to rely on a weekly $600 assistance bonus, something that has helped prop up consumer spending over the last few months when combined with more stores reopening after closures in March and April. That runs out this week, though, and it’s uncertain if Congress – particularly the U.S. Senate – will renew it. Conservative influencers have been urging lawmakers not to do so, afraid it will take away any chance workers will return to their jobs and unaware that making the argument that unemployment assistance shouldn’t be more than their wages implies an understanding that those wages are below the level that would support a family in addition to not offering needed health care and other benefits.

Cutting off that additional $600/week in assistance would remove $19 billion per week from the economy. Things are even more dire for people’s personal financial situation because nationwide eviction moratoriums, intended to protect housing insecure parties from facing homelessness and falling even further behind, expire soon. Like the additional unemployment assistance bonus, there are proposals to extend this but those are bogged down at the moment.

So, basically, where does NATO or its member companies in the exhibition space think consumer money is going to come from?

Theaters can open, and studios can even supply new films for those theaters to play. People may even be willing to go see those movies in theaters. But that doesn’t mean they’re going to have the disposable income to make that choice from a practical perspective.

If anyone has already solved this problem, good for them. But at the moment it seems the stakeholders and interested parties seem to be only considering one part of the marketplace dynamic. There’s a much larger reality that this operates in, one that is about to get a whole lot more unsteady than it already is.

The Snyder Cut is Coming, and Now There Are No Rules

Nice studio you got there. Be a shame if anything happened to it.

Three years of denials, obfuscations, claims of workprints being smuggled out by Allied forces and other reports and rumors are done. The Snyder Cut of 2017’s Justice League, as it has come to be called, is real and will be coming to HBO Max some time in 2021.

This latest development comes just a few months after a wave of comments and hints were made by various parties, including original Justice League director Zack Snyder, who kept posting vague images and teases to, of all things, his Vero social media account.

By way of brief recap: Snyder left/was pushed off Justice League at some point in production, either because of a personal tragedy in his family or because the studio felt the film was out of control and getting worse by the day. Joss Whedon came in to oversee additional shooting, including rewriting significant chunks of the story and abandoning entire storylines. The finished product was widely panned by critics, sitting at a paltry 40% on Rotten Tomatoes, and didn’t ignite the box office, bringing in $229 million domestically and $658 million worldwide. It was overshadowed in both respects by the Wonder Woman movie released earlier in the year.

Ever since then there’s been a crusade from some quarters for Warner Bros. to release a cut of the film they believed sat in the studio’s vaults that was completed by Snyder and represented his true vision. Whedon’s interference, they maintained, watered down the movie by adding too many jokes, not being gritty enough and so on. Until last week, WB insisted no such cut existed and that there were no plans to revisit the movie in any way.

Now, though, the studio has changed its tune, reportedly giving Snyder a $20 million budget to undertake a whole new post-production process, including visual effects and editing.

While there has already been much commentary about the announcement, allow me to share a handful of thoughts about what this could and does mean for the world of entertainment and more. And, because I’m just that kind of sociopath, those thoughts will be framed in quotes from Star Wars: The Last Jedi.

I stoked Ren’s conflicted soul: While he waited a while before doing so, in the last year or so Snyder has been the chief rabble-rouser online, keeping audience speculation of his discarded masterpiece alive. He’s taken on the role of a master online troll, dropping hints here and there to whet people’s appetites and, seemingly, maintain the pressure on WB to agree to a release of some sort.

zack snyders justice leage posterIn that way he’s not dissimilar to those behind QAnon and similar conspiracy theories. They take the reality of a situation and manipulate certain things to convince people of alternate facts. Just as with the Washington, D.C. pizza parlor that reportedly acts as a front for a Hillary Clinton-run pedophile ring, some people *wanted* to believe The Snyder Cut was real and would leap at any bait put in front of them supporting that belief. He’s not William Wallace or Carl Bernstein here, he’s a 4chan troll with the power to command tens of millions of dollars and access to some of pop culture’s most prized assets.

This is not going to go the way you think: Justice League, as it was released, is not a great movie. The story makes little sense, the characters act in massively inconsistent ways from scene to scene, there’s no internal logic to it etc. Those who were adherents to Snyder’s style of filmmaking saw this as evidence of meddling by Whedon and the studio, but it’s not as if those descriptors couldn’t be applied to any of the director’s previous films.

Which means, in short, that there’s a pretty decent chance Zack Snyder’s Justice League is going to also suck, just in slightly different ways.

One can only wonder what the reaction will be among those who believe The Snyder Cut is the second coming when their dream becomes reality and it turns out reality is really bad. What will be the excuse then? Thankfully, Snyder himself has already given them the foundation for continued claims of interference by complaining WB will not allow him to reconvene the cast to shoot additional footage. His vision, therefore, will never be truly brought to life.

If Warner Bros. is hoping The Snyder Cut will act as some massive draw to their newly launched streaming service, more so than the Harry Potter films, Studio Ghibli’s catalog and “Friends” reruns, they are putting $20 million worth of eggs in a very questionable basket, one that may wind up hitting them square in the face.

The greatest teacher, failure is: One of the many astounding things about this newfound willingness to revisit Justice League is that it clearly marks a low point in the DC Comics cinematic universe. Consider that not only did Wonder Woman, released just a few months earlier in 2017, get much better reviews and three times the box office revenue, but so did Aquaman. Shazam and Birds of Prey didn’t perform as well in theaters but have much better critical receptions and reputations since release. And Joker, which also did very well, was supposed to usher in a new focus on non-continuity, filmmaker-led original stories.

Justice League, then, had become kind of a turning point, one where the key to success wasn’t “make everything bigger, darker and more EXTREME” but where the stories were better, the characters more central and the visuals less desaturated. Instead, it’s now the Rosetta Stone, something so important it becomes central to understanding everything around it.

Hi, I’m holding for General Hux…OK, I’ll hold. Whedon being given control of the Justice League reshoots and post-production seemed in some ways to be tied to reports he was heading up a Batgirl film at Warner Bros. The writer/director had previously worked on a failed Wonder Woman adaptation and ultimately left the Batgirl project when he reportedly couldn’t crack the story to his satisfaction. Despite that, it can be assumed that Whedon and the studio could have found some way to work together in the future.

Hard to imagine Whedon picking up their calls now, though. WB is sending the message that yes, they actually do find his version of Justice League to be subpar and now that they’re able to deliver a superior product they will push his work to the side. All because, for reasons I have been unable to fathom for over a decade, someone at the studio believes Snyder is a magical genius, not someone who’s often incapable of bringing his “vision” to life.

Supreme Leader Snoke now deploys his merciless legions to seize military control of the galaxy: This is just the beginning.

In every prime time procedural and action drama you hear the hero or leader make it clear they refuse to negotiate with terrorists. Neville Chamberlain’s reputation has not fared well in light of his appeasement of the Nazi regime’s aggressive expansion plans.

Despite these warnings, what’s happened here seems tantamount to paying the ransom and hoping the kidnappers make good on releasing your spouse from where they’re being held. But that’s just hope, and there are no guarantees it will happen.

So too there’s no guarantee that demonstrating who’s actually in control of the situation won’t spiral into countless similar instances. There’s already evidence of this as “#ReleaseTheAyerCut” began trending shortly after the Snyder announcement as fans are now seeking the “pure” cut of 2016’s Suicide Squad, famously edited by a trailer production company among a handful of other parties.

(Note: Nevermind that *that* situation came about after studio execs wanted to punch up the movie after Batman v Superman – another Synder-directed film – performed poorly.)

It makes you wonder where else fans will turn their attention, believing a diamond to be hidden in rough of studio notes and seized control. Many films over the course of Hollywood history have been ripped from their directors, much to their chagrin and the disappointment of fans. Such instances can be found at least as far back as Orson Welles’ The Magnificent Ambersons and as recently as Chris Miller and Phil Lord being kicked off Solo: A Star Wars Story halfway through filming.

This extremely vocal minority has seen what tactics work now and will go again, much like state-sanctioned Russian manipulation of the 2016 presidential election, or the #Gamergate movement that wanted to eliminate a pernicious female influence from the video game media industry. There have been smaller successes before and now they’ve snagged a win. The demands will only become more substantial over time.

Universal Trolls Theaters, Theaters Demand Tax Be Paid

The future is in play, right now.

Over the last week or so there has been an escalating war of words between Universal Pictures and a handful of theater chains? The object of their disagreement is just what role each party has to play in the continued business model of the other.

The inciting incident in this particular fracas, the equivalent of Archduke Franz Ferdinand being assassinated, was the release of Trolls World Tour a few weeks ago. Universal made the unusual – even unprecedented – decision to release it straight to premium VOD early last month because all the theaters were closed, a result of precautions taken in the midst of the Covid-19 pandemic still sweeping across the nation and world. Not wanting to lose the momentum of the marketing campaign that had already been running with a delay, the studio opted instead to break ground it and others have been eyeing for a while.

Before the release, NATO made it clear theater owners would hold a very large grudge for a very long time against Universal for making such a move. There wasn’t much that could be done to stop the wheels that had been put in motion at the time, but it was apparently necessary to make public statements like this in order to communicate the displeasure of NATO’s members at having been called, essentially, irrelevant.

Since then it has called out the success of this strategy, touting positive sales numbers for a digital release and appeared in the Top 10 titles on Amazon Prime when it was first available.

More recently it’s gotten very awkward. Here’s a short recap:

Universal: This has turned out very well, to the tune of about $100 million.

NATO: Shut up! People love the theatrical experience.

AMC: We’re so put out by this we’re refusing to play any Universal movies in the future after theaters reopen.

Regal Cinemas: Same, and every other studio needs to make sure it doesn’t even think about shortening the theatrical-to-video window.

Universal: We intend to make premium VOD something we consider regularly along with theatrical release.

Today it made good on that promise, announcing The High Note would no longer be getting a theatrical run but would instead be going to premium VOD later this month.

As Julie Alexander pointed out on Twitter, there’s a lot of context that has to be considered among all this rhetoric. Namely, that studios have wanted to experiment with premium VOD for a decade or so, but theaters have always pushed back, using their power to draw mass audiences as leverage. But, as other people have said, their refusal to even allow that experimentation or be part of the solution means they have effectively locked themselves out of conversations they could be benefitting from right now. And the leverage they once had has diminished as ticket sales – which is different from ticket revenue – declines year to year. Theaters are in a much worse negotiation position than they were a decade ago.

Universal was first through the door and as such seems to be drawing the bulk of the fire from opponents of this new tactic. Warner Bros. isn’t too far behind, though, as it announced last month its animated Scoob! will skip theaters as well. And Disney is going one further by pulling Artemis Fowl from theaters and putting it on Disney+ in June.

Some have argued that the Great Recession didn’t kill theaters even though VOD was a viable option at the time. That’s true, but streaming wasn’t nearly the powerhouse it is today, and it certainly wasn’t the case that each company had its own platform it was working overtime to monetize and turn into a Netflix-killer.

In other words, the landscape today is very different, and the closure of movie theaters may be an even more drastic moment that was originally foreseen. Studios may finally realize that theatrical release is optional, not necessary, especially for films that don’t seem to care much potential for awards consideration.

What will be interesting to watch is how, if at all, the marketing changes for these direct-to-VOD releases. Will they have the same level of promotional partnerships as their theatrical cousins? Will they receive similar advertising spending and media planning? Trolls was an aberration in that the campaign was already so far along, but we could see outside companies pull their support if they know the movie isn’t going to theaters. Or deals could change to become more contingent on what release a movie is ultimately given and how it succeeds. In other words, it could become much more like the entire rest of the advertising world, where results are what matter.

Theaters are likely past the point where they can significantly alter the future of how studios will approach their release strategy. The bluster that’s been going back and forth in the press is more about negotiating upcoming contracts than anything else, as it’s not quite plausible a massive chain would outright refuse to play films from a studio like Universal. But AMC had to say something in order to assure stakeholders – including the banks holding the company’s massive debt load – it wasn’t going gently into that good night.

No one, least of all myself, wants to see theaters disappear. But they have gone from the only game in town to the best game in town to merely one of the games in town, with its own set of advantages and disadvantages. The label “direct to video” no longer carries the derogatory connotations it once did, largely because of the investments made by studios into quality material.

While there are a number of unknowns still floating out there, what seems to be clear is that this isn’t the end. Studios can’t keep punting releases down the calendar indefinitely, as eventually there will be too much backlog for theaters to handle. And those releases will be so tightly packed the studios will be tripping over their own feet. More premium VOD titles will be announced, and the theater chains will fall farther behind the times as audiences become more used to this kind of offering.

The future, in other words, will not wait for anyone to catch up with the present.

Quibi’s Launch Forces Us To Ask: What Is a Movie?

Are you ready for some semantics?

After what seems like years of hype and buildup, Quibi finally launched earlier this week. The timing of the launch, which has been set for some time, is nonetheless unfortunate given Quibi’s content model of sub-10 minute videos is meant to be consumed while on the go. Right now, of course, a lot fewer people are on the go, and this may be why initial downloads of the app were relatively low.

The lineup of 50 titles is a mix of news, reality series and, notably, what are being called “Movies in Chapters.”

The latter are scripted series, the final runtime of which is said to be roughly equivalent to a feature film. Hence the label, which is an attempt to spruce the content up a bit instead of calling them “shows.”

Traditionally when something is referred to as a movie, it’s understood to be a singular entity with a defined beginning and ending. It generally runs between 75 minutes and three hours or so, and when it’s done, it’s done. Sure there may be sequels and such, but each is still it’s own thing, standing on its own and clearly identifiable from its title.

In recent years there have been various attempts to chip away at that definition as producers and others work to associate themselves with the prestige factor that is the designation “movie.”

The Perpetrators

Peak TV: In many ways Quibi’s stab at rebranding their content is the next logical step in the rhetorical journey has been happening with the talent and platforms behind what’s been dubbed the “Peak TV” era. Producers and showrunners, especially those behind series at HBO, Netflix, FX and other outlets have frequently used some version of “It’s really more of a 10 hour movie” to describe their series, trying to not only get people to tune in for the whole thing but promise them one big arc, not lots of little ones.

Franchises: The debate has been running for several years now as to how to classify movies like those part of the Marvel Cinematic Universe. Those stories are so interconnected and keep picking up the baton where the previous installment left off that in many ways they’re more like episodes of a television series than the traditional movie → sequel progression. The manner in which the story never seems to end undoes the notion that movies are defined within the structure of themselves.

Too Staunch Defenders

On the other end of the spectrum you have parties like NATO and film festival organizers who insist a movie should be so narrowly defined as to exclude content that would otherwise easily be included. Unless a title plays or is guaranteed to play in theaters for a specific period of time and in a specific manner, they would argue it isn’t actually a movie and is therefore ineligible for awards consideration or showcasing to festival audiences. Feature releases produced by or premiering on Netflix, Hulu or other streaming services are cast aside, referred to disparagingly as “television movies” to set them apart and bestow lower-class status.

Both those who seek to loosen the definition and those who seek to restrict it too tightly are overdoing it. A movie should be a single moment, not a collection of material. Nor is a movie unique to its distribution platform. Those arguing otherwise have some sort of stake in the game, hoping to bend the definition to include whatever they’re working on in order to make it seem more valuable.

SXSW and Amazon Bring The Film Festival Home

More like this, please.

It’s a sad truth that most people never see the majority of movies programmed at film festivals. Whether it’s Sundance, Toronto, Miami, Chicago or anywhere else, the kinds of films that play there aren’t the ones that are going to get 12 showtimes a day at the multiplex. In most cases even if the film gets sold to a streaming service, the marketing campaigns aren’t substantive or aggressive enough to break through the media clutter. Breakouts happen, but not often enough, and every year seems to bring at least one story of a title a studio paid tens of millions of dollars for only to see it die at the box office eight months later.

That reality is a shame because while there are certainly legitimate clunkers in most mixes, most of these movies deserve to be seen, at least by a wider audience than the handful of critics and journalists who are able to attend those festivals.

This year the calculous was altered when most every festival after Sundance in January was cancelled because of the emerging Covid-19 pandemic. Without a venue to share their dream projects, many independent filmmakers were left dangling without the big platform they were counting on to get their movies into the public conversation.

Today Amazon and SXSW announced a program whereby those filmmakers can opt to have their films added to a virtual festival that will be streamed for 10 days on Prime Video. Festival organizers had already signed a separate deal to stream some of the short features meant to be in competition on MailChimp’s platform.

 

In today’s announcement, various executives are quoted as saying how excited they are to be bringing these movies to audiences, that the films deserve to be seen by people who would otherwise not have had the chance.

That sentiment is wonderful and shows a willingness to help solve a problem that had emerged that was potentially devastating to the budding careers of many filmmakers.

It also blows up the foundational notion on which film festivals are built.

The basic premise of most festivals is that only a select few – those who are deemed worthy by virtue of being part of the press or some other important person – are worthy of seeing them. If you can’t make it to Park City, Telluride or another location and don’t have the proper credentials, you aren’t meant to receive that privilege.

They are exclusionary by definition. That’s how they receive attention and, importantly, make money, by trading on and selling the idea of exclusivity.

Multiple times a year, then, as every festival ramps up and through the weeks afterward, those following entertainment news are told repeatedly about movies they will likely never see. They are reminded that they aren’t worthy of partaking in the artificially created scarcity.

If film festivals, in the age of streaming, were truly committed to connecting worthwhile films with hungry audiences, they would just put them online. Make them available for a month and charge a $15 membership fee. Or find some way to partner with local theaters to screen the movies on a rotating basis for a period of time. If these are available only for a limited time, it might not significantly hurt their potential to find an audience later. And if it keeps acquisition prices more reasonable, that’s a win for the studios. Finally, they come out of these periods with much broader awareness and word of mouth already baked into the market then they currently do.

Basically, there are options. But protecting the business model of the film festival, one that seems ripe for the kind of disruption that has roiled every other industry, is more important.

I will fully take advantage of the Amazon/SXSW partnership, don’t get me wrong. It’s a great idea, but it’s one that needs to be replicated multiple times a year across a number of sites or platforms and not only when we’re all being told to social distance ourselves from our friends and families as well as the movies we love. Let people see the movies and stop hiding them behind the temple’s veil.

That’s a Lot That’s Happened In the Last Few Days

The theatrical exhibition world is upside down.

It was just a few days ago that the biggest announcements coming out of Hollywood were a handful of release date changes, with major titles being pushed back by several weeks if not several months.

Since last Friday, though, we have already gone through approximately 762 news cycles, each bringing with it a handful of changes and updates, all of which were more groundbreaking and largely unprecedented than what came before.

Studios have not only punted even more major releases – including Black Widow, which had previously been the sole holdout to Disney’s other changes – but have halted production on projects like The Matrix 4, the Avatar sequels, the third Jurassic World movie and countless others.

The combination of big titles being pulled from the release schedule and guidelines from the CDC as well as many state, county and city agencies to avoid gatherings, practice social distancing, isolate at home if possible and more lead theater owners to make a sequence of decisions. First it was to limit seating at shows. Then it was to shut down some locations in select cities, usually following mayors or governors ordering such measures. Finally, AMC, Regal, Cinemark and most all others have closed all their U.S. theaters.

Also contributing to that incredibly difficult and highly unusual decision is that not only was the Covid-19 coronavirus not showing any signs of slowing down in the U.S. but last weekend’s box-office was the worst such period in 20 years. That’s good news for public health as it eliminates at least one place where people can ignore the recommendations being offered, but it means those theaters aren’t making any money, with the workers there – often among those making somewhere around minimum wage – likely suffering the brunt of the consequences given the lack of social safety net programs.

One movie that hasn’t been rescheduled is Universal’s Trolls: World Tour, which the studio announced will be available via VOD rental platforms for a 48-hour period the same weekend it was meant to hit theaters. Other recent titles like The Hunt and The Invisible Man will also come to digital home video early, following a trend begun by Disney when it released Frozen 2 to Disney+ streaming three months ahead of its planned debut. The Rise of Skywalker is also out on digital now, a few weeks ahead of time, and Warner Bros. says Birds of Prey and other recent titles will follow suit.

frozen 2 pic

That’s good news for people who are exercising common sense and staying home if they’re able to, especially if they have kids home for extended periods because of school closures. For theater owners it may not be quite as sunny a picture.

Commentary over the last few days has included how Disney’s moves could lead to an even further collapsed theatrical release window and how Universal shifting Trolls from theaters to on-demand hints at the kind of business model studios likely prefer, especially given the higher profit margins and reduced costs.

How the theaters themselves will emerge from this is the big question mark hanging over the situation at the moment. Studios do indeed have the flexibility to alter a movie’s release pattern and platforms because they control the product and can choose a different supply chain when one unexpectedly closes.

Theaters are less nimble and rely on the studios to use them as the distribution venue of choice. Box office receipts are already down six percent in 2020 from last year, and now are faced with the combination of no revenue whatsoever for anywhere from six weeks or so to three months or more and massive debt loads that make their financial situation precarious and subject to sharp downward turns given the slightest marketplace hiccup.

Just today, the National Association of Theater Owners finally put out a statement in response to all the developments of the last week, making it clear they see any deviations from the minimum 90 day theatrical release window as an aberration to be at best overlooked and they they are certain people will return to theaters once they reopen.

 

https://twitter.com/sarafischer/status/1239969760294526976

The question remaining, though, is this: What will they be reopening with? Studios are pushing their entire calendars out, so if things level out and real life commences in June it’s unclear what movies will even be available at that point. And what kind of marketing campaigns will they be supported with? So many movies have already been significant advertising and publicity pushes in support of release dates that are no longer happening or feasible, and new dates will have to keep in mind both overcoming audience hesitancy to come back out into the world and allow for enough time to make the public aware of the new date.

Both those issues are troublesome on their own. Put together they are even more problematic.

Netflix Doesn’t Want Ad Revenue; It’s After Something More Valuable

Income from ads is cyclical, building long term cache isn’t.

Every few months an analyst will make a statement of some kind about how much money Netflix could make if only it would give into reason and begin running ads on its streaming service. Late last year Needham analyst Laura Martin recommended the company introduce a lower-priced membership tier that included ads. That’s not a new idea, as earlier in the year another analyst estimated Netflix could bring in an additional $1 billion, something that would help offset the debt it’s building up in an effort to keep producing original material.

Media buyers are veritably chomping at the bit to throw their money at Netflix, eager to reach an audience that is highly engaged and on the forefront of the continued changes the media industry is going through. Still, CEO Reed Hastings is virtually alone in the streaming marketplace in steadfastly turning away such entreaties, unwilling to get into the game of aggregating and selling user data and unconvinced significant revenue can be pulled away from Google, Facebook and Amazon.

Instead he’s committed to keeping Netflix as the one major company people can use that’s free of constant consumer appeals and the subsequent problems regarding data privacy and so on.

That stand explains a number of recent developments and announcements.

Netflix the Awards Contender: If there was any question as to whether Netflix deserved to be mentioned in the same breath as the “major” studios, the fact that it wound up with more Oscar nominations this year than any of those other names should put it to rest once and for all. It clearly wants to make this a cornerstone element of the brand, constantly putting out well-regarded features from top filmmakers that will compete for recognition, which increases their lifespan on the service.

Netflix the Mass Market Pleaser: On the other end of the spectrum, Netflix is following up the six-movie deal it signed in 2015 with Adam Sandler with a new four-movie deal, confident the audience for lowbrow comedies featuring Sandler hanging out with his friends that are perfect for nodding off to is a big portion of its subscriber base. That’s not a huge leap to make given the company recently reported members have watched 2 billion hours of Sandler’s movies, a not-insignificant number.

Netflix the Exclusive Provider: Many were writing Netflix’s obituary when WarnerMedia announced it was launching its own streaming service, which came with the loss of “Friends” on the platform. Other services from other companies mean “The Office” and other popular library titles will no longer be available. But CCO Ted Sarandos isn’t concerned, convinced subscribers will simply dive into one of their original productions when looking for something to watch. While it almost certainly stings, at least publicly company execs are saying they’re not losing any sleep over these developments.

Netflix the Producer: As Eric Kohn points out, after spending a few years on massive purchasing binges, Netflix has been scaling down its acquisition activities at Sundance and other festivals recently. It will still sign big checks when the deal is right, but those are largely for documentaries that offer something novel, not the kind of project you can easily develop in-house. Like other streaming services, it sees those original productions as key marketplace differentiators, and often uses its on-site recommendations to draw particular attention to new releases.

Subscriber gains are going to vary from one quarter to the next, as has been the case over the course of Netflix’s existence as well as that of Hulu and other services. Such fluctuation is going to necessarily impact ad revenue, so many of those numbers being thrown around by analysts are idealistic at best, not to mention the significant costs of scaling up a team to handle those sales. And, more importantly, it makes the company’s continued viability dependent on those ad sales, which as the newspaper industry is finding out is a precarious position to be in.

Instead what Netflix is building is long term brand value. Those four attributes mentioned above will continue to pay dividends long after the next big trend in online advertising comes and goes, and that’s what Sarandos and Hastings are trying to build, despite the constant pressure from analysts and commentators.

NATO: Fewer People Went to Theaters in 2019

We’ve already seen that box office revenue was down in 2019 by a noteworthy 3.9 percent. That news in and of itself was bad enough given how up and down the last few years have been, with the fate of the industry riding largely on how much it can pull from a handful of blockbuster franchise releases.

Last week another wave of bad news hit when the National Association of Theater Owners revealed attendance – the actual number of tickets sold – fell 4.6 percent in 2019 from 2018 levels. The only reason, then, that the revenue drop wasn’t as big was that the average price of a ticket (including premium formats) was up to $9.37 at the end of the year.

While movie-going is still an enormously popular activity, the trend continues that it seems to be increasingly one available primarily to the well-off.

As Erik Hayden at THR points out, that average movie ticket price is higher than the monthly subscription rates for Netflix, Hulu, Disney+ and other streaming services. And right now 39 percent of respondents to a recent survey are paying for three or more such services (including music) at a time.

For the consumer, then, it comes down to value. $9.37 can buy one movie ticket, but it comes with the obligation to make the necessary arrangements to leave the house. And how often are people going to the theater themselves, and what other activities are they adding on to that trip? Even a solo trip will likely end up costing significantly more than that.

Compare that to the $7-10 a streaming subscription cost, which comes with far fewer additional burdens. While each service has its own library of material, the options available on any one of them are substantive enough to keep most people occupied for hours if not days. And the perceived risk involved is much lower, as blowing $9 on a single movie that winds up being a dud is a huge disappointment while the couple hours you invest in a movie on Netflix is fine since you can check your email as you finish it with few regrets.

What Does the Audience Want to See?

At some point the theatrical exhibition chains are going to have to figure out how to live in a world that includes both their business and that of the streaming producers, who continue to bank on the idea that original features and series are the key to success. The stocks of AMC Theaters, IMAX and others took a hit at the end of last year because of big-budget bombs like Cats and even the perceived disappointing results of Star Wars: The Rise of Skywalker.

But those are the movies they booked, influenced in part by the studios who put on persuasive presentations at CinemaCon and assurances that people will come see known properties. Meanwhile, they keep shunning anything that comes from Netflix, even if it’s from high-profile filmmakers and comes with massive buzz attached. Netflix may have far fewer titles than it did a few years ago, but it has proven a serious player in the awards game and that’s come with the subsequent industry attention.

So, then, how interested in the future of movies are the theater chains? And what do they see their role being? Their core business model, after all, means they are at the whims of studios that make questionable decisions for a number of reasons without substantive input on those decisions.

If people are willing to pay $25-30/month combined for a two or three streaming subscriptions but continue to signal they are balking at the $9+ for a movie ticket, there’s no clear path for theaters to adjust their business models other than to keep jacking prices up, getting more out of a shrinking pool.

That seems unsustainable in the long term, but perhaps those in charge are just hoping to get through the next quarter unscathed and then leave it for the next person to figure out. The choices being made now, though, will have serious repercussions for everyone, especially the audience.