NEW YORK — After Ben Affleck and Matt Damon test-screened their Nike drama Air, Amazon Studios executives challenged them.
“They said, ‘What do you guys think about the theatrical release?’ Damon says. “It wasn’t what we expected when we first made the deal.”
“Air,” about Nike’s push for a shoe deal with Michael Jordan, appealed to early audiences so much that Amazon, despite acquiring the film for its Prime Video streaming service, wanted to launch it in theaters. And in the first two weeks, “Air” became a hit.
After a strong five-day debut of $20.2 million — especially good for an adult drama — Air dropped just 47% in its second weekend. The reviews have been stellar. When Air hits Prime Video, the studio and its creators expect an even better showing than if it didn’t launch in theaters.
“It should work like free advertising to create a halo effect, which in turn increases viewership on the service,” says Affleck, who starred in Air. “If that’s the case, I think the business will really expand and go back to a broader theatrical model.”
Not too long ago, some predicted that more and more films would be redirected from theaters straight to homes. They said that going to the cinema was destined to die. Not only did this prediction not come true, in some cases the opposite happens. Companies like Amazon and Apple are racing towards multiplexes, taking a very different approach to streaming-focused Netflix. Launching on 3,507 screens, Air was the biggest release ever by a streamer – and that’s just the beginning. Amazon Studios, led by Jennifer Salke, plans to release 12-15 films in theaters annually. Apple is going to spend $1 billion a year on movies that will be shown in theaters before streaming.
Eventually, movie theaters and (most) streaming services become fast friends.
“We really think that by showing it in theaters, you just can’t otherwise get that kind of word of mouth and press around it,” says Kevin Wilson, executive director of Amazon Studios and MGM’s theatrical distribution. “No matter how much you spend, it’s hard to replace.”
This “halo effect” is not entirely free. It takes a strong marketing campaign to draw attention to a film. But whether a film is heading to a streaming platform or video-on-demand, a surge in theatrical circulation can cascade through each successive window. A movie dropped right into the vast digital space can go viral or quickly become one of the million things you can click on.
Movie viewing has not yet reached the pre-pandemic level, but is approaching it. Movie after movie has topped the box office recently, including Creed III (produced by Amazon-owned MGM) and Lionsgate’s John Wick: Chapter 4. With over $600 million in two weeks of “Super Mario Bros.” from Universal Pictures. breaks records among animated films. After a dismal 2020, a rocky 2021, and last year’s intermittent comeback led by Top Gun: Maverick and Avatar: The Way of the Water, optimism reigns that theaters have weathered the storm.
“Spring has arrived in the theater business,” exclaims John Fithian, soon-to-be outgoing president and CEO of the National Association of Theater Owners. On Monday, the trade group will bring exhibitors to Las Vegas for CinemaCon, which is sure to be a triumph. Expect big announcements of a revival.
Last year, the number of theaters in Hollywood lagged significantly behind the pre-pandemic level of wide releases. With 63% of 2019’s wide releases, the box office hit 64% of the 2019 box office. The problem, according to the exhibitors, was the lack of supply. About three dozen more major releases are planned for this year.
“Both Amazon and Apple have made it clear that they have over $1 billion in upfront budget to produce and market films that will be released in theaters,” Fithian says. “In a year or so, we’ll get to the point where we have more films distributed in theaters than before the pandemic.”
Movie theaters are not exactly out of the woods. During the pandemic, the number of screens operating in the US and Canada dropped from 44,283 in 2019 to 40,263, according to NATO. While those losses are much smaller than many expected, the balance sheets of some theater chains remain tight. Regal’s parent company, Cineworld, filed for Chapter 11 bankruptcy last year. The financial condition of the cinema owners, according to Fithian, is his biggest concern for the future.
Streaming, however, may be moving away from being the main contender. Studios have gone their separate ways during the pandemic, trying out new release methods. But while a large number of films, like Apple’s all-star action adventure Ghost this Friday, are still going straight to streaming, some of the biggest film providers have abandoned these pandemic-era experiments.
“Live streaming of movies didn’t do us any good,” David Zaslav, chief executive of Warner Bros. discovery.
Since Zaslav took over the studio last year, Zaslav has dramatically changed course at Warner Bros., which spent 2021 releasing films simultaneously in theaters and on the platform formerly known as HBO Max. squashed a total of $70 million in Batgirl and Scooby! Festive hunting. The data, he says, is clear: “As films moved from one window to another, their overall value grew, grew, grew.”
It should be noted that many people made much the same argument long before the pandemic. But Wall Street craved subscriber growth from streaming services, and studios eagerly chased the rewards—rising stock prices—until the bottom hit last year. As the number of subscribers has dwindled, the message from Wall Street has shifted: Grow your streaming platforms, but still make money.
“We’ve been arguing about this for years,” Fithian says. “But I’m glad they finally figured it out.”
Later this year, Apple will release two highly anticipated epics: Martin Scorsese’s Flower Moon Killers and Ridley Scott’s Napoleon. They will have help. Paramount distributes Killers of the Flower Moon, and Sony handles Napoleon. Scorsese, one of the big screen’s most passionate advocates, recently said he hopes companies like Apple not only release movies in theaters, but build theaters.
“Perhaps these new companies could say: let’s invest in the future of new generations for creativity,” says Scorsese. “Because a young person is really going to see a movie in a cinema, someone who knows in five or ten years can become a wonderful writer, artist, musician, composer, director, whatever. You don’t know where that inspiration will land when you throw it there. But it has to be outside.”
Of course, being “there” has its risks. Theatrical distribution can give a film a touch of worth the effort to see and set it apart from an endless sea of content. It can also mean investing millions in advertising for an often already expensive film that audiences with more attention competition than ever may not flock to. The creation of “Air” cost 130 million dollars. If it had been a flop, then most likely it would have landed straight into streaming.
“It has to be the right film. This plan won’t work on every movie. Amazon will pick the ones that make sense,” Wilson says. “The Apple of the world and maybe even the Netflix of the world can see: it doesn’t have to be in every movie, and it doesn’t have to completely turn our business model on its head.”
Amazon received its first Best Picture nomination for the streaming service back in 2017 with Manchester by the Sea, while Apple won last year with CODA. But Netflix, the streaming pioneer, has long been the most dominant platform. And it has remained resilient to theater coverage.
Although Netflix gives many of its films a limited weekly theatrical run and owns two theaters (one in New York and one in Los Angeles), the streamer generally considers its own platform to be its biggest marketing driver. Last fall, that gave Detective Rian Johnson’s sequel Glass Bow: Knives Out the widest release of any Netflix movie. But The Glass Bow still only opened on about 600 screens and only played for five days. Most major films are shown on over 3,500 screens for four weeks or more.
“It’s not our business to bring people to theaters,” Netflix chief executive Ted Sarandos said Tuesday during an earnings call. Netflix’s scale and reach sets them apart from other Steam services, he says. A recent popular release such as Murder According to Netflix, Mystery 2, starring Adam Sandler and Jennifer Aniston, was watched 82 million hours in three weeks.
The Glass Bow, despite its small footprint and modest promotional support, still made about $15 million in ticket sales. Some analysts say Netflix has hundreds of millions of dollars left on the table. Netflix hasn’t budged, but at least they’re no longer trendsetters.
“I hope they see what Amazon and Apple are doing and realize that they can make money from theaters and get more subscribers to Netflix,” Fithian says. “They’re like the last ones at the party.”
The movie business always looks better when hits are on; a few big bombs and all doubts will start again. Strategies may change. But right now, cinemas and (most) streamers are finding a lot in common. And business is booming again.
“All the naysayers who said maybe the theatrical business is dead or going to be a lot smaller than it used to be, I’m not so sure about that,” Wilson says. beat yourself in the chest. But there are definitely positive signs everywhere that say there is no reason why we can’t get back to where we were and in the next few years maybe surpass that.”
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Follow AP Film writer Jake Coyle on Twitter: http://twitter.com/jakecoyleAP
