Theater Chains Clap Back
The one social media platform that was working in Hollywood earlier this week was Twitter. Those that follow Adam Aron (CEO of AMC) were served with a large dose of “choke on that!”
Despite the Delta Variant, last weekend’s moviegoing receipts were up, impressively so, theatrical revenue, teasing the industry that moviegoing is back to normal. or rather this is but the “newest normal.”
No Time to Cry
Daniel Craig, in one of his last performances on set as James Bond, gave a tearful thank you to the crew of his five bond films. As arguably Britain’s most bankable property (presumably to be snatched up by Bond villain doppelganger, Jeff Bezos), Craig barely held back the tears as he remarked on the greatest honor of his life, playing 007.
Bond’s latest incarnation had been sitting on the shelf for almost two years as its original release plan of November 2019 (pre-pandemic, if we can remember such a time). Delayed a few more times over the last 18 months, Bond finally opened this weekend overseas to a huge $119M debut without China (opening in the Middle Kingdom on October 29). As Variety reported back in January 2021, a film on the scale of Bond needs substantial ticket sales to pay back its huge price tag, rumored at $200M, requiring—in many people’s opinion—a theatrical-only release. Opening this week in the U.S., No Time To Die is expected to become the biggest box-office hit of the pandemic era.
Inject the Venom
Battling on the domestic shores for weekend headline supremacy was Venom: Let There Be Carnage and Shang-Chi and the Legend of the Ten Rings, with the former taking the crown. Venom easily won the weekend with an opening of $90M, ending Shang Chi’s run of four weeks as box-office king.
Venom is now king of the post-pandemic era, beating out hybrid-release Black Widow’s $80M, as well as other films. Venom is now the second-biggest October weekend release ever, behind Joker, which ultimately made over $1B in the global box office.
Key will be to watch second-weekend declines, which during the pandemic have been routinely over 65% to 70%, which pre-pandemic were typically 20 points lower.
“Calm Down, Mate! I’m Not Dead”
On the strength of Shang-Chi’s Labor Day box-office results ($94.5M, the best Labor Day weekend ever), Disney recently announced that all six its 2021 slate would return to a theater-first release with a minimum theatrical window of 45 days except for Encanto, which has a 30-day window.
AMC and Cinemark, the two largest theater chains, claim to be profitable if they reach 80-90% of pre-pandemic levels. Thus, Shang-Chi’s performance counts as a big win for moviegoing, and also reveals relatively hidden interest in yet another minor Marvel character who has proven to command a major audience. Another checkmark for the future of moviegoing.
Shang-Chi has now over $208M in domestic box office and almost $390M total without counting China—a bonafide tentpole return. This obviously shows strength in moviegoing, and all studios will take notice.
Venom, released by streaming-less Sony, benefited from a reduction in COVID, colder weather (less time outdoors), and a Chairman who at least publicly supports theatrical windows. Tom Rothman argues that “theatrical films will have exclusive windows in theaters...but be flexible.” SPE CEO, Tony Vinciquerra, stays on message, claiming now “there is a higher bar…to get films into theaters.” However, flexibility seems to be key as the studios scramble to make as much as they can in order to arm themselves against it.
With all the excitement around the recent, unexpected success at the theater, Ted Sarandos (also at Code) gave a firm “no” to the idea that Netflix would buy a movie theater chain. Sarandos further stated that “moviegoing will be less frequent and more expensive” going forward, at least every weekend except Labor Day.
Sharing the same stage as Sarandos, the next day Kilar was asked about the content “arms race” among the top steamers, to which Kilar said WarnerMedia will spend “north of $18B,” similar to what Netflix expects to spend. How the studios/streamers fund this arms race is likely to remain very different for the moment, which leads us to...
Back to Disney
A few estimates of content spend to put the Mouse House on top, between $18B and $25B).
Without relatively-cheap capital from Wall Street (Netflix), nor ancillary businesses to subsidize entertainment (Amazon/Apple), Disney must find its own sources of income to pay for its spending. Making the decision to bring back the theatrical window for the remaining of its 2021 slate seems like a good decision at present. Delta is on the decline and theatrical attendance is strong. Subscriber counts have slowed for both Disney+ and Netflix, and the old ways of making money seem attractive once again.
Can the genie be put back in the bottle?