On Friday, Disney’s “Black Widow,” its first film in the Marvel Cinematic Universe since 2019’s “Avengers: Endgame,” becomes the next release to test the recovery of film exhibition.
While “Endgame” delivered the $400 million spike seen above, 2021’s record June 25 weekend boosted by Universal’s “F9” barely surpassed the worst weekends of the pre-pandemic box office.
All eyes are on “Black Widow” to set the next record — if its day-and-date availability on Disney+ via the streamer’s $30 Premier Access charge doesn’t hold it back — making this the biggest litmus test yet for such hybrid release models.
There are a few key reasons why Disney’s strategy for “Black Widow” is so important to watch.
Disney’s hybrid releases show better theatrical retention rates than those of Warner Bros.
Warner Bros. committed to making its entire 2021 theatrical slate available on HBO Max, but Disney has utilized the hybrid release format on a film-by-film basis.
This strategy appears to be working better for Disney.
Warner Bros.’ more genre-oriented films, like video game adaptation “Mortal Kombat” and urban musical “In the Heights,” saw stronger rates of audience decline after the first weekend than action tentpole “Godzilla vs. Kong” or family-aimed “Tom & Jerry.”
However, Disney’s releases have exhibited an even lower rate of decline after their openings.
Disney+ does have more than 100 million subscribers, while WarnerMedia’s streamer has yet to reach 50 million “eligible” sign-ups, so the former is in a better position to charge extra.
Still, WarnerMedia’s strategy has resulted in a massive headache of lost film revenues reportedly totaling as high as $1 billion. Meanwhile, Disney’s “Cruella” has already grossed more than any Warner Bros. film in 2021 aside from “Godzilla vs. Kong,” per Box Office Mojo.
Plus, other streamers are making box office competition as complicated as ever.
SVOD expanded during COVID, adding high-quality streaming options to the film calendar.
July 4 has historically been a lucrative time for the box office, but this past weekend saw a 30% drop in gross from June 25, per Box Office Mojo.
This makes sense when looking at major studio content that was available to stream.
As Universal’s “Boss Baby” sequel marked Peacock’s first foray into the hybrid model, Amazon released Skydance’s big-budget Chris Pratt vehicle “The Tomorrow War,” initially set for Paramount.
With A-grade studio films redirected to streaming platforms, film exhibition can’t escape the reality of how SVOD has expanded to grant consistently viable virtual options.
Take “Raya and the Last Dragon.” Released to theaters and Disney+ a week after “Tom & Jerry,” its opening only nabbed $8.5 million versus the latter’s $14 million, per Box Office Mojo.
“Raya” did open to around 400 fewer theaters than the Warner Bros. film, but it also released a day after ViacomCBS relaunched CBS All Access as Paramount+, led by a new “SpongeBob” film. Why would families have bothered going to cinemas with more than one choice at home?
Likewise, Sony’s “Peter Rabbit” sequel was originally supposed to hit theaters June 18, but it was moved up one week ahead of schedule less than a month before its intended release, rather than share its debut weekend with Pixar’s “Luca,” which was exclusive to Disney+.
With Premier Access, Disney can acknowledge similar competition by making sure its theatrical films don’t completely lose out on audiences willing to pay to watch at home.
Theaters are bouncing back but are significantly behind 2019’s numbers.
Only six states are still imposing capacity limits on indoor theaters, with essential markets like New York and California fully open, per the National Association of Theatre Owners.
As optimistic as that appears, the scope of the pandemic’s toll is still coming into focus.
A whopping 20% of theaters across the U.S. and Canada remain closed compared with this time in 2019.
Given the situation, there isn’t much reason why Disney wouldn’t continue to make the most of Premier Access. The same way the company seized a remarkable share of the domestic and global box offices in 2019, it now has sizable heft in the streaming space and can distribute film content to adequate audiences physically and virtually.
Now that Universal has committed to moving its Pay 1 window to Peacock, as Paramount did with its streaming counterpart, studio film content is as essential to streaming strategy as ever.
With Amazon set to play chief strategist for MGM Studios, Disney’s Premier Access model could ultimately be a useful one for other streamers with film studios to replicate if “Black Widow” nabs a payout in the ballpark of or exceeding what “F9” brought in.
Doing so may be the only way to make up for such a diminished exhibition market.
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