What Black Widow's $60 Million Disney+ Haul Actually Means

[Geoff Jones]

Argue that theaters have bigger screens, far better sound, better picture and the group experience of seeing a movie, especially a popcorn movie, with a large group of other people and they couldn't care less.

I'm absolutely certain this is true for most people.

When "the masses" went to the movies, more often than not, they ended up in a small auditorium with a small screen and poor sound. When you "argue that theaters have bigger screens, far better sound, better picture," that statement doesn't remotely match their experience. Sure, the masses don't know or care what 5.1 or 4K means, but they do know when they are blown away, and that wasn't happening.

Theater chains made a huge mistake by building massive complexes with a dozen tiny auditoriums. They sacrificed presentation for convenience (14 different showtimes for the latest Avengerer movie!) and that's how moviegoers learned to prioritize. They weren't offered the choice to see Avengerer on a 60' screen with surround sound, a 20' screen with mono, a 20' screen with a blown speaker, an 18' screen, or another 18' screen. They were given the choice to see Avengerer at 7:00, 7:15, 7:30, 7:45, or 8:00. Most of them ended up with crap, but they sure learned that convenience is important.

[Bobby Henderson]

We only have Netflix and Amazon Prime, thru a Dish Network system, but they both are a pain to get out of if you want to go somewhere else.

I still have Dish Network but have zero extra turned on through that service. That Dish subscription of mine is on the bubble of being unplugged after 20+ years.

The only reason why I still have Dish is for watching live sports. I think the 24 hour cable news networks are completely toxic, infected outlets of anger pornography. The people running those channels are whores willing to do anything for ad revenue. Most of the other "basic cable" channels are pretty worthless, overrun with marathon blocks of reality TV. I'm not into "unscripted" reality shows at all. The few channels that do have original content (FX, AMC, etc) migrate that content over to streaming services like Netflix, Prime or Hulu. I prefer watching those shows on streaming services without the 5 minute blocks of commercials.

HBO was the only premium package I had thru Dish, but Dish and HBO got into their spat years ago. So I have HBO turned on thru Amazon Prime Channels. I have the HBO Max app loaded on my iPad Pro.

Ted Lasso is on Apple TV+, not Disney.

I get Disney+ and Apple TV+ confused with each other sometimes. Maybe that's because Disney has a big seat on Apple's board of directors. Nevertheless, it underscores my earlier point about there being too damned many streaming services. I don't subscribe to Disney+ and I don't have an Apple TV+ subscription either. I'm thankful my iPad Pro doesn't hound me to sign up.

From Disney's perspective, they now have over 100 million subscribers to their streaming service (internationally). That generates about $9.6 billion a year that they don't have to share with theaters or international distributors. My guess is that they really don't care too much about theaters anymore. They probably now consider the theaters to provide "incremental revenue".

You're probably right about that. If Disney indeed thinks theaters don't matter anymore they're looking at that from a very short term perspective. The biggest selling point for Disney+ is accessing a great deal of content that originally played in commercial theaters. All those animated classics and Marvel movies played in theaters and needed the theatrical revenue to subsidize the production and marketing costs. If Disney largely cuts commercial theaters out of their business ecosystem it will hurt them badly in the long term.

The funny thing with streaming services is the huge amount of content gets taken for granted after awhile. It's no different than a person's home media rack loaded with several hundred DVDs and Blu-rays that rarely ever get watched. Ultimately the thing that matters is NEW content. No studio is going to blow the same epic level amounts of money on made for TV movies as they do on legit theatrical releases. That's because a movie that doesn't play in theaters is just a TV show. Without theaters the content supply for Disney+ or other services is going to suffer. I'm sure they'll have some decent TV series. As for 2 hour stand-alone movies, nope.

Theaters made a huge mistake by allowing the studios to shorten the windows to nothing. All they needed to do was boycott the movies from any studio that shortened or eliminated exclusive theatrical windows. Now they're screwed even though they made deals to share the streaming revenue for day-and-date releases.

Unless the entire commercial theater industry joins together to present a unified front they're essentially powerless to the whims of movie studio executives. Like you said, I'm also afraid we're going to see a lot of commercial theaters close over the next few years. My town of roughly 120,000 (metro pop) is down to one commercial theater, a former Carmike site now run by AMC. Under the current circumstances, I don't see another chain coming to this town if that AMC location closes. It's terrible that a lot of theaters (and local jobs) could be lost. But the studios in Hollywood need to understand they'll be hit with serious consequences too if commercial theaters disappear in many communities. It will change the perception of how people regard movies. And not in a good way either.

Theater chains made a huge mistake by building massive complexes with a dozen tiny auditoriums. They sacrificed presentation for convenience (14 different showtimes for the latest Avengerer movie!) and that's how moviegoers learned to prioritize. They weren't offered the choice to see Avengerer on a 60' screen with surround sound, a 20' screen with mono, a 20' screen with a blown speaker, an 18' screen, or another 18' screen. They were given the choice to see Avengerer at 7:00, 7:15, 7:30, 7:45, or 8:00. Most of them ended up with crap, but they sure learned that convenience is important.

I think the situation actually reached its most ridiculous point back in the late 1990's when companies like AMC started building 30 screen sites. I remember visiting one at Grapevine Mills in the DFW metro to see the Spielberg movie Amistad. My girlfriend and I wound up in a pretty tiny auditorium. It was easy to see how they managed to reach that big "30" number.

Theater chains are caught in a Catch-22 situation. The margins are pretty narrow. So the bean counters are cutting corners on everything, such as staffing. Deferred maintenance is a big problem. Blown speakers, stains on the screen, vandalized seats, etc can go unfixed so the bean counters can try to save a buck. The thing the bean counters don't realize is the sub-par experience turns off customers and encourages them to watch movies at home more. That can turn into a negative feedback loop. Fewer customers visit the theater, the revenue drops and even more corners are cut on the theater's operation. From my position it's very easy to say the bean counters need to take a big gamble, spend big and get the theaters into tip top shape in order to attract more customers. Unfortunately it is a strategy that is not guaranteed to work. Too many movie-goers don't appreciate the finer details.

[Martin McCaffery]

Well, Somebody had to do it:
Variety

Scarlett Johansson Sues Disney for Breach of Contract Over ‘Black Widow’ Release
Brent Lang
Jul 29, 2021 10:53am PT



Disney’s decision to release “Black Widow” on Disney Plus at the same time it hit theaters has sparked a legal battle with Scarlett Johansson, the actress tasked with playing the Marvel superhero.

In a lawsuit filed Thursday in Los Angeles Superior Court, attorneys for Johansson allege that the star’s contract was breached when the studio opted not to debut the film exclusively in theaters, a move they claim depressed ticket sales for the Avengers spinoff. Much of Johansson’s compensation was tied to the box office performance of “Black Widow” — if it hit certain benchmarks, bonuses would kick in.

“Disney intentionally induced Marvel’s breach of the agreement, without justification, in order to prevent Ms. Johansson from realizing the full benefit of her bargain with Marvel,” the suit reads.

Disney announced in March that “Black Widow,” among several of its 2021 films, would premiere simultaneously on the studio’s subscription-based streaming service, for a premium $30 price, and on the big screen as the movie theater industry rebounded from COVID-19. On July 9, “Black Widow” opened to $80 million in the U.S. and Canada, setting a COVID-era box office record, and earned an additional $60 million on Disney Plus. With ticket sales currently at $319 million globally, it stands to be one of the lowest-grossing Marvel movies. However, the suit notes that Disney’s stock rose after the company disclosed the rental figures.

“Disney chose to placate Wall Street investors and pad its bottom line, rather than allow its subsidiary Marvel to comply with the agreement,” the suit reads.

“To know one’s surprise Disney breach of the agreement successfully pulled millions of fans away from the theatres and toward its Disney + streaming service,” it continues.

The Wall Street Journal, which broke the news of the lawsuit, reports that sources close to Johansson estimate that the decision to release the film concurrently on Disney Plus resulted in $50 million in lost bonuses.

Johansson’s legal salvo comes as new distribution paradigms and the COVID-19 pandemic are reshaping the way that A-list actors are compensated for their work. Many top actors include backend profit participation as part of their contracts. But the rise of streaming services such as Netflix has removed those forms of compensation and the decision by traditional movie studios such as Warner Bros. and Disney to release films on their own in-house subscription services has further upended these old ways of doing business. When Warner Bros. opted to send its entire film slate to HBO Max, realizing that movie theaters were only operating at limited capacity for much of the year, the studio had to pay tens of millions of dollars to the stars of those films. That resulted in actors such as Will Smith, Denzel Washington, and Keanu Reeves earning their full back-end on the movies that Warner Bros. released on its new service. If successful, Johansson’s suit could embolden more actors to seek additional compensation for films that migrated to streaming services and may lead to agents including stricter language in contracts regarding compensation if an exclusive theatrical release is compromised or bypassed.

Johansson legal team said that representatives for the actress were worried that “Black Widow” would debut on Disney Plus even before coronavirus brought life to a standstill. As part of the suit, they share emails from the star’s management group that asked the studio to guarantee that “Black Widow” would premiere exclusively in cinemas. In response, Marvel Chief Counsel Dave Galluzzi promised a traditional theatrical bow, while adding “We understand that should the plan change, we would need to discuss this with you and come to an understanding as the deal is based on a series of (very large) box office bonuses.”

Neither Disney nor John Berlinski, an attorney for Johansson, immediately responded to a request for comment.

[Marcel Birgelen]

You're probably right about that. If Disney indeed thinks theaters don't matter anymore they're looking at that from a very short term perspective. The biggest selling point for Disney+ is accessing a great deal of content that originally played in commercial theaters. All those animated classics and Marvel movies played in theaters and needed the theatrical revenue to subsidize the production and marketing costs. If Disney largely cuts commercial theaters out of their business ecosystem it will hurt them badly in the long term.

Seemingly, they think they simply can compensate this with new subscribers.

Yes, they'll need new content to keep their current base and lure in new subscribers, but what they want to get rid off, is the high-stakes business model of big blockbuster movies. I don't think that Disney will entirely stop with those, as they will continue to push the occasional Marvel and Pixar releases out there, but I guess we can expect them to reduce the number of big blockbuster releases among their studio divisions. Instead, if you put the same money into TV series, you get way more content for your buck.

Netflix, at least on paper, is worth more than the entire Walt Disney Company... a company that runs studios like Disney Animation, Pixar, Fox and all their divisions, owns the most successful theme parks across the globe, runs their own cruise line and has their own TV network. So, it's clear that those studio executives want to copy what Netflix is doing...

[Bobby Henderson]

One problem is there is a gigantic glut of series TV out there. There isn't enough time just to keep up with the huge number of TV series available on just one streaming platform like Netflix. Every service out there has a bunch of its own TV series titles. Prime Video has far more than I can watch. HBO has a bunch. Same for Hulu, Apple TV+, etc. For Disney+ the biggest selling point is the big name theatrical releases, everything from classic animated movies to newer Marvel titles. If Disney just tries going it with more and more TV series they're going to be no different than Netflix.