How Disney Plus, HBO Max, Peacock Are Banking on Splashy Movies in the Streaming Wars

The Two Popes Marriage Story Netflix
Courtesy of Netflix

It seemed like any other movie premiere.

Journalists and photographers swarmed the red carpet as stars Tessa Thompson and Justin Theroux smiled gamely for pictures and struck a pose, just as they would for any other Hollywood screening. Except there was one key difference. The film they were in New York City to promote last week, a live-action remake of “Lady and the Tramp,” is helping to usher in a new frontier of moviemaking. Instead of bowing in theaters, it will debut on streaming platform Disney Plus.

“The pressure to perform and deliver a great movie was the same,” says producer Brigham Taylor. “We just set out to tell the best story we could. We’re just trying to connect with people, and ultimately Disney Plus could allow us to find a broader, bigger audience than we could even have found in a theater.”

The paid subscription service is part of a new wave of challengers to Netflix that are scrambling the way moviemakers and media companies think about the projects they greenlight. Disney Plus will launch in November, followed in short order by premium direct-to-consumer services from WarnerMedia (HBO Max), Comcast (Peacock) and Apple (Apple TV Plus). Much of the initial wave of projects has focused on nabbing rights for popular sitcoms such as “The Office” and “Seinfeld,” as well as sprawling development deals with the likes of J.J. Abrams, Ryan Murphy and Shonda Rhimes. Now many of these services are turning their attention to moviedom in hopes of finding compelling projects that will help them lure subscribers.

“This is the future,” says Jimmy Schaeffler, chairman of the Carmel Group. “You have to move, and you have to move quickly, because there’s so much competition. You have to score some home runs early in the game or you risk becoming an also-ran.”

The pressure is only growing on the film front, particularly as Netflix has dramatically increased the quality of its feature offerings. After backing critically maligned productions such as the Will Smith fantasy “Bright,” Netflix’s feature division is overflowing with Oscar contenders this year. The company has generated rave reviews for the likes of Noah Baumbach’s “Marriage Story,” Fernando Meirelles’ “The Two Popes” and Martin Scorsese’s “The Irishman.” That track record, along with its 2017 decision to enlist former Universal executive Scott Stuber to oversee its film division, has made the service a desirable destination for filmmakers looking for a home for their passion projects.

Disney Plus has unveiled much of its initial slate, which includes original movies such as “Lady and the Tramp” and the elf comedy “Noelle,” along with the “Star Wars” spinoff series “The Mandalorian.” The studio is also beginning to fill its development pipeline, including an untitled fairy-tale project with “To All the Boys I’ve Loved Before” helmer Susan Johnson on board to direct. The box office failures of “Dumbo” and “Maleficent: Mistress of Evil” have made Disney increasingly wary of committing to a full-fledged theatrical release of some of these films, and there is a sense they might work better for streaming. There was a time when Disney considered debuting its live-action version of “Pinocchio” on Disney Plus, but after hiring Robert Zemeckis to direct the film, a theatrical release seems more likely.

Disney’s rivals aren’t as firm in their plans, but they’re beginning to move aggressively. HBO Max is expected to lean heavily on Warner Bros. to supply it with exclusive content. The subscription service hopes the studio will provide it with eight to 10 movies, a number that could ramp up over time. Certain films could be produced or overseen by the likes of Abrams and Greg Berlanti, two prominent creative forces with overall deals on the lot. Some of these productions could be tentpole-sized, with healthy budgets that could rival those of major feature films. Eventually productions will likely hail from the DC Universe, WarnerMedia’s in-house comic book division, as it looks for compelling content. The studio was successful in convincing Melissa McCarthy to release her upcoming comedy “Superintelligence” on the service, and other feature projects could follow suit.

Comcast’s service won’t rely on subscriptions but will instead be supported by advertising revenue. However, the company is still relying heavily on original content, including films, as it tries to carve out a toehold for Peacock. Executives at Universal, the film studio Comcast owns, have been poring over the hundreds of projects they have in development in hopes of finding suitable movies to make for the service. It’s unclear how many films they’ll produce or what the budgets will be, but industry sources expect the projects to include faith-based films, comedies and horror movies in the Blumhouse vein.

In some cases, studio sources say, Comcast is backing movies that might be considered dicier propositions commercially because it believes it can ultimately find a home for them on a streaming service. If the films test through the roof, the studio might reconsider and decide to back a full-fledged theatrical campaign. Already, some studios have chosen to sell off films to Netflix that faced an uphill climb at the box office, as Warner Bros. did with “Mowgli” and Sony is reportedly considering with “Masters of the Universe.” Paramount and A24 have gone a step further, inking deals with Netflix and Apple to produce original movies for the platforms.

As these film studios pivot to streaming, many are holding back on licensing their content to rivals; they want to keep the films they make on their own services.

That’s limiting the supply of film libraries and increasing the price they can fetch. “There’s a real pau­city of content to license, particularly content that people actually want to see,” says Matthew Harrigan, an analyst with Benchmark.

Take Sony. That studio, as well as Paramount, is not one of the media companies preparing to launch a major subscription service — at least not yet. That means it has a library of some 5,000 films that streaming companies are eager to license, all with deals that come up for renewal over the next three years. These include a wide variety of windows, ranging from the studio’s deals with premium cable networks to the licensing pacts it scores for broadcasters.

“We’re seeing a huge amount of heat already,” says Keith Le Goy, president of worldwide distribution for Sony Pictures Entertainment. “We have a vast and iconic library of titles that work for streaming companies. Movies are an incredibly powerful way for streaming services to retain customers. They may attract customers with original programming, but they keep them coming back time and again by offering the best films.”

Filmmakers may still prize a theatrical release, but they’re beginning to warm to the notion of streaming. They’re getting substantial budgets that rival those of theatrical releases, and with filmmakers like Scorsese, Baumbach and Alfonso Cuarón embracing the new form of distribution, the stigma is lifting. At the “Lady and the Tramp” premiere, the actors and creative team said they were excited to be among the first wave of talent to help bring Disney Plus to the masses.

“It’s a sign that they trust our film to be the one that they point to and go, ‘This is the kind of quality that Disney Plus will offer,’” says cast member Yvette Nicole Brown. “That’s exciting.”