Apple TV+ is reportedly joining Amazon Studios in separately investing billions of dollars in movies tailored for cinema premieres.
“It may have been implausible a few years, heck, even a few months ago, that tech giants like Apple and Amazon would spend billions on theatrical movies,” writes Rebecca Rubin in Variety. Bloomberg News Service reported Apple will spend $1 billion a year on flashy films. Rubin writes that “comes months after Amazon’s similar commitment to putting 12-15 new movies in theaters annually.”
Top streamer Netflix has dabbled with limited cinema-first releases, but seems to prefer having its movies premiere on its streaming platform. Any cinema release for Netflix original movies is usually at the behest of the film’s creative talent and is small.
For movie theater operators, the prospect of cinema releases from Amazon and Apple is a relief given hard economics. Boxoffice is down 30% year-to-date from the most recent pre-pandemic year of 2019, largely because film production and release were disrupted by the Covid virus. The pandemic created a void in flow of films now being experienced.
For example, in 2020, Sony Pictures sold its would-be theatrical “Greyhound,” a WWII naval drama, to Apple TV+. The Tom Hanks film that cost about $50 million to make premiered in streaming months later. That maneuver was driven by theaters being closed at the time.
Another would-be theatrical film shifted to streaming premiere due to the pandemic is supernatural thriller “Prey,” which is part of the “Predator” series of movies. The franchise is based at Fox, which Disney bought in 2019 and moved “Prey” to Disney-majority-owned Hulu streamer in August 2022.
So, going forward, will Apple funnel some movies to cinemas first?
No doubt, streaming executives are thinking of the success for Apple with deaf family drama “Coda.” Apple TV+ acquired the indie film for a rich $25 at the Sundance Film Festival in 2021. “Coda” would be named Oscar’s Best Picture, among three Academy Award wins a year later.
The veering to cinema is something of a surprise and at the same time no surprise. Cinema release still generates a consumer buzz that streaming premiere doesn’t, sets up titles for theatrical awards that are prestigious and gives a long-term glow to films. Streamers that can rack up cinema awards and boxoffice create more long-term value for movies that they finance.
Streamers veering to the cinema window comes as S-VOD (subscription video-on-demand) business is in upheaval. Streamers tapped down their soaring spending on content over the past six months to instead to trim operating losses that irk Wall Street investors. The new watchword is to manage the streaming business for profitability.
An example: earlier this month Netflix cut loose a romantic comedy “Paris Paramount” from Oscar-winning filmmaker Nancy Meyers that was in advanced development because of concern over its $130 million budget. “Paris Paramount” is now being shopped elsewhere. Also, streamers trimmed their original movie slates. A closer look indicates midrange films got the axe. Streamers seem to be saving their capital for big splashy projects that can win awards and move the needle in audience viewing.
Also, there’s a gold rush among streamers to license TV rights to sports, which is costly and leaves no residual benefits. When sports TV contracts expire, the streamers are left with nothing. In contrast, a streamer-financed movie usually remains owned, its distribution controlled and its downstream economic benefits are enjoyed by the streamer.
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