Theaters Blame Disney For Releasing ‘Black Widow’ In Theaters And Streaming

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Scarlett Johansson and Florence Pugh play Natasha and Yelena in Marvel’s “Black Widow”.

Disney

Temperatures are rising in the entertainment industry following week two of “Black Widow” in theaters.

The Marvel film, which grossed $ 80 million nationally in its first weekend, the highest box office opening in the pandemic, saw a significant drop in ticket sales over the weekend. most recent end.

Down 67%, “Black Widow” had the worst second weekend performance of any Marvel Cinematic Universe movie, just behind “Spider-Man: Homecoming” which fell 62% from its debut of 117 million dollars and “Ant-Man and the Wasp,” which fell 62% from $ 76 million.

The slippage led to the National Association of Theater Owners speaking out against Disney’s decision to make the film available in theaters and through Disney Premier Access (a price of $ 30) on the same day. The studio announced last weekend that it had raked in $ 60 million from Disney + sales.

“Why has such a well-made, well-received and long-awaited film performed less well? NATO wrote in a lengthy press release on Sunday. “Despite claims that this hasty pandemic-era release strategy has been a success for Disney and the concurrent release model, it demonstrates that an exclusive theatrical release means more revenue for all stakeholders at every cycle of the film’s life. “

The group, which represents more than 30,000 screens in 50 states, called “Black Widow” ticket sales a “staggering collapse in movie theater revenues for the second weekend.”

NATO’s concerns are not new, but come at a time when the coronavirus pandemic is resurfacing, even in heavily vaccinated areas. Some local governments have started to restore social distancing and masked safety measures.

The entertainment industry is in dire straits, with studios and theater operators at odds over how and when films should be released in theaters and through streaming services. Many studios have already said that these hybrid release models are only temporary precautions in the event of a pandemic and plan to release films exclusively in theaters in late summer and early fall.

The case of a hybrid version

The pandemic has rocked the movie industry as chains large and small have been forced to close locations due to security measures across the country. While studios have been able to postpone much of the content that had been reserved for theaters, extended shutdowns and the rise in coronavirus cases have led some to release films on streaming platforms or create a hybrid model.

Disney has postponed “Black Widow” for over a year to make sure it would have a theatrical release. However, with a massive roster of other MCU movies waiting behind the scenes, the studio was forced to make a decision on how to market the film.

Disney ultimately chose to put the film in theaters and on Disney + for a fee in order to allow fans to see “Black Widow” on the big screen or, if they were more comfortable, from their couch. The decision was made long before vaccination rates increased and before the delta variant spread to the United States.

“There are two camps right now – those who feel comfortable going back to the movies and those who don’t,” said Jeff Bock, senior analyst at Exhibitor Relations. “NATO blames streaming is a knee-jerk reaction that is entirely selfish. It’s almost as if they don’t understand the current market.”

“Plus, ‘Black Widow’ was never going to be the strongest Marvel movie due to its place in the MCU timeline,” Bock said. “The statement released by NATO will not age well. In fact, it looked dated the minute it was released.”

Disney is no stranger to box office success, in 2019 it had seven films exceeding $ 1 billion worldwide. Executives at the company have stated their intention to continue releasing films in theaters, especially big budget films tied to big franchises.

While box office receipts have increased in recent months, the pandemic is not over. Outside the United States, vaccine rates have lagged, resulting in delays in releases to other countries and lower returns in open regions.

Not to mention the fact that a significant portion of Americans are unvaccinated, including children.

“It’s probably fair to view ‘Black Widow’ as an experience during a time of many uncertainties where no one has the perfect answer as to how to strategize for global property during the later stages of a pandemic,” said Shawn Robbins, Chief Analyst at Boxoffice.com.

The traps of the day and the date

There is no denying that Disney left money on the table because of this release model. Disney + ‘s $ 60 million in sales is not box office revenue. It’s selling home videos. This money would traditionally have been earned after “Black Widow” had finished her time in theaters.

“I don’t think it was a huge surprise that the week two box office dropped significantly, as there was always the possibility that first-time viewers would attend the theater and repeat viewings would be on Disney +. “said Alicia Reese, Senior Equity Associate. search for Wedbush.

Reese noted that Disney had not shared Disney + sales data for the second weekend, so it’s not clear what kind of streaming saw compared to cinema.

“The point made by NATO is a good one; it’s not just the loss of movie theater revenue with this day-to-date model, but cannibalized second window (normal PVOD) revenue that will end up hurting Disney in the longer run, “she said.” Since Disney + subscribers who pay for premium access to ‘Black Widow’ can view the movie as many times as they want, and as long as they have their Disney + subscription, they will not be incentivized to purchase the movie or to rent it in the window. “

Right now, the top two grossing films of the year nationally are “A Quiet Place Part II” and “F9,” both of which had an exclusive theatrical window. It should be noted that “F9” also saw its box office revenue drop 67% between its first weekend and its second weekend, according to data from Comscore.

“The industry as a whole is still trying to carefully navigate this phased global recovery,” Robbins said. “Disney took a notable step forward by reporting streaming numbers on the opening weekend, but they have so far denied this perceived transparency by remaining silent on premier access numbers for the week since.”

“We know how badly the second weekend drop was at the box office, so why don’t we know how much revenue dropped on Disney +?” he said. “The answer seems almost obvious, but we shouldn’t have to read between the lines. Whether it’s temporarily shielded or never revealed at all, the optics of withholding this information is just not good. . “

Scarlett Johansson and Florence Pugh play Natasha and Yelena in Marvel’s “Black Widow”.

Disney

Prior to the release of “Black Widow,” Disney had previously stated that “Free Guy,” “Shang-Chi and the Ten Rings,” and the rest of its 2021 roster, including “Encanto,” “Eternals,” and “West Side Story “, would all be released exclusively in theaters for at least 45 days.

Disney CEO Bob Chapek reiterated the company’s commitment to theaters in his May earnings call, but acknowledged the “fluid nature” of the resumption of exhibits and the possibility of another major outbreak .

The company is well aware of the power of the box office and the devastating impact piracy has on potential revenue. After all, in 2019, Disney has scheduled the release of “Avengers: Endgame” to coincide in China and North America on the same date to ensure that the majority of potential audiences can see the film in theaters before it hits theaters. not be hacked online.

This strategy also led “Endgame” to raise a record $ 1.2 billion worldwide on its opening weekend, including more than $ 350 million in the United States and Canada.

“Obviously, in the digital age, the ability of a high-quality pirated copy of a movie to go around the world in an instant is a risk every studio should consider when releasing. a movie on streaming platforms before or simultaneously with a theatrical release, ”said Eric Wold, senior analyst at B. Riley Securities.

“I think we saw the impact this had on ‘Black Widow’ domestic box office results during the opening weekend and the weekend after, as well as the fact that Disney didn’t has yet to announce a theatrical release date in China even though the film was the green light some time ago, ”he said.

An uncertain future for cinemas

National and international ticket offices have made great strides in recent months, with ticket sales surpassing 2020 levels. However, a return to normal is not expected until at least mid-2022, with some analysts predicting 2023 as the date. recovery limit.

“I believe the industry has entered uncharted territory where content creators are trying to find the most profitable ways to monetize their product,” said Doug Stone, box office consultant and former theater operator. “We’re not there yet and even if all theaters were operating at full capacity, I don’t think the puzzle will have been solved.”

According to data from Comscore, around 82% of theaters were open during the most recent weekend.

And the Covid threat to the industry is not over.

“The country has made great strides in this area, but there is still a hill to climb,” he said. “When that happens certainly depends on vaccination rates and the transition to herd immunity… Given all of this, I wouldn’t expect we would hit the new normal until at least the middle of 2022. and maybe later depending on all of the above. “

Over the weekend, Los Angeles, the largest movie theater market, reinstated its mandatory mask policies amid an increase in Covid cases in the county.

Studios haven’t slowed down movie releases due to this recent surge in cases, but audiences may become less comfortable going to theaters if these outbreaks persist.

“There is no doubt that this remains a very unusual theatrical market, with the effects of the pandemic continuing to impact the number of theaters opened, consumer behavior and of course box office results,” said Paul Dergarabedian, Senior Media Analyst at Comscore.

“While it’s understandable that some studios are opting for a hybrid release strategy to cope with this challenging environment, the data clearly shows that long-term gameplay and final gross revenues are improved for films that use a model.” first indoors, “” he said. . “But of course there are so many variables at play that it may be wise to let the dust settle before you can properly assess which of these release models (or a combination of them) is the most beneficial in the long run. term.”


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