Memo to Netflix, HBOMax, Disney Plus, and the rest of the streaming scrum: People were more likely to stream a movie when they knew it had been released in theaters, according to a new survey by Ernst & Young that was commissioned by the National Association of Theatre Owners (NATO).
Clearly, given NATO’s moniker, it has a dog in the fight between the exhibition business and the digital forces upending Hollywood. However, even though the study was paid for by the theater business’s main lobbying arm, its findings are interesting and point to the value of a standard roll-out in multiplexes. Sixty two percent of the study’s respondents reported that if a movie had appeared in cinemas, they were more willing to check it on their streaming services. Only 3% of respondents said they were less likely to stream a movie if they knew it was released in a movie theater.
“A theatrical release creates more of a conversation,” said Phil Contrino, director of media and research at NATO.
The study comes at a time of great change in the movie business. It is being released as Disney has launched a streaming offering with Disney Plus, attracting 28.6 million subscribers in the process, and as WarnerMedia and Comcast are readying the debuts of their own Netflix-challengers in HBOMax and Peacock.
Netflix has historically had little use for theatrical runs, but the company has tried to find a middle ground in recent years, partly at the urging of top directors such as Martin Scorsese and Alfonso Cuaron. Films such as “The Irishman,” “Roma,” and “Marriage Story” have had a limited, exclusive release in theaters before debuting on Netflix. Major chains refused to carry those films because they did not adhere to a traditional theatrical window of roughly three months before bowing on streaming. The EY report does not make a distinction between the type of theatrical release a film receives, Contrino notes. He argues, however, that Netflix’s strategy is flawed.
“Netflix is still trying to get the halo effect that goes with theatrical, but they’re not going all the way,” said Contrino. “If you look at what they had this Oscar season, a lot of people would look at [‘The Irishman’ and ‘Marriage Story’] and say they’d left money on the table.”
The study polled 2,015 respondents, who saw at least one movie in theaters over the last twelve months, as well as 505 respondents who did not see any movies in theaters last year. It found that streaming services are complementary, not cannibalistic when it comes to moviegoing. People who visited a movie theater nine times or more annually streamed more content than respondents who visited a movie theater only once or twice. Respondents with more than nine trips to the movies saw an average of 12 hours of streaming content per week, compared to the seven hours that respondents who only saw one or two movies a year watched on average. Of those who didn’t visit a movie theater in the last 12 months, nearly half didn’t stream any online content. The findings belie a popular narrative, one that argues that movie attendance is struggling because people would rather stay home and watch Netflix.
“The disruption talk is overstated,” said Contrino. “What’s being disrupted is the way people consume content in the home.”
Contrino believes that streaming is altering the media landscape. It’s just siphoning off broadcast television viewers and encouraging consumers to cut the cord.
They study suggests that younger viewers, weaned on YouTube, aren’t abandoning the multiplex en masse. Consumers between the ages of 13 to 17 streamed the most content per week (10.5 hours) and saw the most movies in theaters (6.8 movies). People between the ages of 18 to 37 watched the fewest movies in theaters (5.6 movies), while streaming 8.5 hours of content a week. Respondents between the ages of 38 to 52 watched 9.5 hours of streaming content a week and saw 6.1 movies in theaters. Respondents between the ages of 53 to 72 streamed 6.9 hours of content while seeing 6.1 movies in cinemas.
“It’s just lazy to say younger viewers are abandoning movies,” said Contrino, adding, “The coming launch of all these streaming services means it’s only going to get harder for something to break through. Success in movie theaters is one of the top ways for content to stand out.”