Some reasons why studios might abandon theaters


No one is rooting for the disappearance of the theatrical experience – but is it the same, when its survival is no longer a primary concern?

October 12, Disney announced that the theatrical experience – something moviegoers have compared to church and other holy rites – was actually an agnostic experience. A new media and entertainment division now oversees the distribution of all Disney content and makes cold-blooded decisions about where audiences find it. If he finds more people (and money) on streaming platforms, then this is where he is going. Case in point: “Soul,” a universally adored Pixar film that could also be a Best Picture nominee, will debut on Disney + on December 25.

For a century, theaters were the most efficient way for studios to exhibit and market films in the first place: it drew maximum attention to the titles and prepared them for future sources of income. The theatrical exhibition also requires huge marketing expenses and locks down studios in 75 to 90 days of exclusivity when clients would prefer home access earlier. Other problems: Studios have to share half of their income with theaters, this requires dedicated distribution staff and leaves the studios dependent on a company beyond their control.

Even with these drawbacks, over the years the introduction of every auxiliary model – television, video, cable, DVD, streaming, and VOD – the centrality of theaters has remained largely unchallenged. That changed with the onset of COVID-19, a force majeure event that forced everyone to reckon with a long-simmering suspicion: maybe theaters weren’t the best and the only way.

Exhibitors – and some distributors – vehemently disagree. This is the only way to see films as they are meant to be seen; this is the only way to have the shared theatrical experience. When the pandemic made all of this impossible, many studios pushed their films back to six, eight, 12 month dates; at this point, hope disappears, the time for movies on the big screen in an auditorium filled with other moviegoers will return. (And, that the theaters will be there for: World leader AMC has revealed it could run out of money by early 2021. They would likely file for bankruptcy before they do.)

Others see it differently. Paramount Pictures has sold half a dozen titles to streamers like Netflix and Amazon, taking real cash on an ambiguous future. Universal started experimenting with PVOD, which also provided much faster and more direct gain. And now Disney has a whole new division dedicated to the idea that theatrical release is just one platform among many – and a “legacy” platform to that.

Cinemacon, the annual convention where studios present their slates to exhibitors, likes to invoke nostalgia by reminding attendees of their shared history within the art of cinema. It’s the way it always has been, the story unfolds and the way it always should be. The pandemic has reminded everyone of another maxim: Business is not sentimental. If the studio turns seem drastic, it’s only because 2020 has increased their velocity. Studios are part of conglomerates, which are inherently unresponsive, and this development started a long time ago.

Theater audiences have been declining for decades; So too does the concept of what constitutes a viable theatrical release. The costs of production, distribution and exploitation demand global and large-audience successes, which come from franchises, comic book characters, horror films, sequels and animation. Dramas and comedies were among eight of the top 10 films of 1980; 40 years later, these genres are risky.

It doesn’t make sense now for studios to make 10 $ 20 million movies, each with their own marketing costs, rather than a $ 200 million effort. Meanwhile, studios are watching Netflix and other streamers build businesses that don’t target the masses as a unit; they (or really, their algorithms) see audiences as a global and almost endless set of niches that don’t demand the latest FX or the biggest screen.

“Wonder Woman 1984”

Warner Bros.

No one supports the disappearance of theaters – but is it the same, when their survival is not a primary concern? When theaters reopen and desperately need big movies like “Wonder Woman 1984,” “Black Widow,” and “No Time to Die,” studios will dictate their non-theatrical windows while devoting their energy to how they can look more like to Netflix. The theatrical experience is great, sure, but everyone wants to be an agile, massive, global content provider that is very responsive to what their audience wants and vertically integrated into a revenue stream that customers are dealing with. their subscription with the same automatic payment respect as a utility bill. All with a minimum of drama and a fraction of the traditional marketing expense.

With the Disney reorganization, even the biggest box office revenue generator has announced its disinterest in maintaining the status quo. Its competitors will have to determine how they will follow suit. A new business model focused on streaming is at play. No one can quite define what it looks like (although Disney + and Netflix are already making PVOD look a bit retro). As paradigm shifts have a way of showing us, those who wait for everything to make sense risk being left behind.

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