On Monday, AMC Theatres reached an agreement with Warner Bros. to exhibit its films exclusively in cinemas for a shortened 45-day window beginning with the 2022 slate, echoing an identical agreement with Regal Cinemas operator Cineworld in March.
But while touted as an optimistic turn for a box office handicapped by same-day digital releases for theatrical films, the situation is getting dire again.
The first DC Films title from Warner Bros. to hit theaters since the “Wonder Woman” sequel’s release at the end of 2020, “The Suicide Squad” grossed below expectations and failed to elevate the box office over the August 6 weekend as Disney’s “Black Widow” did on July 9.
Like “Black Widow,” “Suicide Squad” was available to stream upon release, but unlike Marvel’s return, the DC film bowed amid heightened concerns regarding the Delta variant of COVID-19. After reaching a high of 55% the first week of July, public sentiment toward going to these movies has fallen back below 50% among adults, per Morning Consult survey data.
Still, the optimism of the summer box office uptick was idealistic to begin with.
In June, the National Association of Theatre Owners (NATO) released a statement decrying hybrid release strategies’ impact on theater grosses, highlighting the sharp 68% downturn seen with “Black Widow” in its second weekend (Disney’s Marvel films typically dropped an average of 55% pre-pandemic, per Box Office Mojo data).
NATO selectively overlooked the fact that the ninth “Fast Saga” film from Universal, the top-earning theatrical exclusive of the COVID era so far, saw nearly the same drop in gross after opening. On top of that, Disney’s “Jungle Cruise” managed to maintain more of its opening gross for its second weekend, despite having the same hybrid release as “Black Widow” via Premier Access on Disney+.
Likewise, the next best theatrical exclusive at the box office following the impressive debuts of “F9” and “A Quiet Place Part II” is a film addition to the ongoing Japanese anime series, “Demon Slayer,” which doesn’t exactly scream tentpole.
Subsequent titles down the list show weaker openings than those that hit theaters and streaming services at the same time; as such, it’s more likely that “Black Widow’s” gross drop is more accountable to the size of the Marvel fanbase setting deceptively high expectations similar to “F9” and its respective franchise fanatics, with the hard-R “Suicide Squad” releasing too late to ride the same COVID-averse wave, with news reports on Delta making DC fans think twice – especially with the HBO Max option.
Ultimately, such hybrid releases have done more heavy lifting for exhibitors than those with “Only In Theaters” emblazoned across their posters, precisely because the lack of alternate revenue streams via the likes of Premier Access charges on Disney+ or boosts in respective SVOD subscriptions has kept studios reluctant to maintain their pre-pandemic outputs.
As of Labor Day, the only studio that will have matched its wide-release output from 2019 is Warner Bros., having pledged the entirety of its 2021 slate to its sister streamer.
Disney has the second highest output of wide hybrid releases this year, but it has avoided releasing 20th Century films in 2021 prior to Friday’s “Free Guy” debut, which is Disney’s first theatrical exclusive this year, soon to be followed by “Shang-Chi” from Marvel on September 3.
Premier Access revenue on Disney+ has certainly been lucrative for Disney. After granting “Black Widow” an additional $60 million, Premier Access nabbed $30 million for “Jungle Cruise,” nearly as much as that film’s opening gross.
On the contrary, Warner Bros.’ HBO Max commitment resulted in steep losses potentially reaching $1 billion, due in part to compensating talent for back-end gross agreements, a problem that Disney is contentiously taking on following a lawsuit from “Black Widow” star Scarlett Johansson.
However that plays out, the worsening COVID situation is already bringing back 2020 headaches, as Sony on Thursday postponed its “Venom” sequel slated for September 24 to October 15 and is also mulling a sale of its fourth “Hotel Transylvania” film to a streamer.
A lack of new films playing was exactly what kept most exhibitors from reopening last summer, with chains like AMC hinging their resumption on when “Tenet” would finally keep a stable release date.
As Disney CEO Bob Chapek asserted in March, consumers have grown accustomed to streaming films at home as the pandemic presents challenges to theatrical models. “I’m not sure there’s going back, but we certainly don’t want to do anything like cut the legs off a theatrical exhibition run,” said Chapek at the time. He further doubled down on the company's Premier Access rationale Thursday during an earnings call with investors.
Given how COVID has escalated again, don’t expect Chapek’s words to lose relevance. Whichever theatrical film bows next on Disney+, exhibitors desperately need it.
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