Words: Max Rawlinson
2022 was quite the year for theatrical releases. After what seemed to be a never-ending pandemic for the movie industry, cinemas have been screaming out for quality releases, and for the most part, they have got them. From the smallest of movies to huge franchise entries, it is safe to say that we as moviegoers have been spoiled for choice. It is, however, undeniable that there has been a decline in interest in cinema releases and their ability to be profitable. Too many recent releases are not making enough money theatrically. Many have struggled to break even and make back their production and advertisement costs.
For too long the industry had been worried that the theatrical release was in danger of dying out. Just as the Covid-19 pandemic hit and lockdown began across the world, traditional movie studios and NETFLIX began the battle of the streaming services. Is this something the cinema chains need to worry about?
With audiences trained to watch more of their entertainment content at home, Hollywood had a reason to be worried about the diminishing box office throughout the pandemic. Thankfully, within the last year, we have finally seen a resurgence in both the quality of movies released in cinemas, but also the ability to get bums back in seats. Movies such as ‘Spider-Man No Way Home’ and ‘Top Gun Maverick’ proved that the theatrical release is not dead yet, and there is plenty of potential money to be made. Audiences are just pickier than ever about what they are willing to pay to see on the big screen.
Tom Cruise in Top Gun Maverick
Photo: New York Times
Now both streaming services and cinema chains are fighting for the same audience, they both must use new tactics to hold onto their respective consumers.
For theatrical releases, you have the growing demand for big franchise entries with huge spectacles from the likes of Marvel or DC. But Hollywood’s latest trend is the use of a large ensemble cast and/or a nostalgia play, like the incredibly successful ‘Top Gun Maverick’ from this year; a sequel that took 36 years to make. As for streaming services, audiences demand a constant stream of content every week of all sizes and budgets. NETFLIX, Amazon Prime Video, and Disney+ have one goal, and that is to keep you subscribed.
As they each cannibalise one another, they both must decide to either spend more money or ask for more of the consumer. With prices rising everywhere, customers are only willing to budget so much a month for their entertainment now. This has ultimately led to the boom in tiered subscription models with multiple pricing options. For example, NETFLIX has now introduced a cheaper plan with advertisements. As for cinema chains such as ODEON, they are pushing their ODEON Limitless subscription which allows the customer to see an unlimited number of movies for a fixed price.
What is most interesting is that streaming services are striving to be like one another, copying each other’s release formulas. Companies like NETFLIX are now releasing their more expensive original movies such as ‘Glass Onion – A Knives Out Mystery’ theatrically, which hit the big screen for just 1 week in November, before it headed to their subscription platform to stream at home just a month later for no extra cost. They also do this with their much smaller awards-friendly movies, such as Apple TV+ with ‘CODA’, which won Best Picture at last year’s Academy Awards. This is because, for a project to qualify for awards season, it must be shown in any movie theatre for a minimum of 7 days. Fascinatingly, however, traditional theatrical releases are now seeing shorter windows at the multiplex, just to be released quicker to watch at home on premium video on demand (PVOD). They are now often sent within 30-45 days to anywhere you can digitally rent a movie, such as iTunes and Google TV.
Daniel Craig in Glass Onion-A Knives out Mystery
Photo: Digital Spy
For streaming services, this is a great way to further expose their product to new audiences. As for shorter theatrical windows, this is starting to hurt the overall box office. Blockbusters are seeing a decline in repeat viewing, diminishing their box office returns as many choose to see it once, then wait to see it again at home. As for smaller awards fairs, if they were not performing well pre-pandemic, post-pandemic is now a sea of red. Audiences are now willing to wait for a movie to leave cinemas to watch it in the comfort of their own home. This is a real problem for small to medium budget projects as they are not getting the financial return they need, to be worth releasing theatrically.
Netflix Founder Reed Hastings
Photo: Business Insider
For now, Hollywood is unsure which industry will come out on top. But does there need to be a winner? These two industries should and need to learn to co-exist. There should be room for both in the market. Cinema chains must evolve or die. Many say their best chance is to heavily invest in the premium experience. This can be done by building more higher quality screens such as IMAX to draw audiences away from their sofa to see a movie on the big screen.
To lose the option of seeing a movie on the big screen could be a grim future for many. Luckily, we are not there yet and as of now, we are living in a golden age of movies and television. Whether you are grabbing your overpriced popcorn for your big screen experience, or you are sitting comfortably at home with your supermarket Sweet n’ Salty, there is an abundance of great content waiting to be watched.