2020 was a tumultuous year for the worldwide box office. After the pandemic forced theaters around the globe to close, studios had no choice but to postpone movie releases. The box office plummeted 70%, falling from a worldwide total of $42.5 billion in 2019 to $12.4 billion that year. Even as 2021 approached and the prospects of restrictions easing improved, the landscape for movie releases remained uncertain. As such, studios were forced to adapt their release strategies in unprecedented ways.
In December of 2020, Warner Bros announced it had secured a deal with HBO Max to roll out its entire 2021 slate in a hybrid format. The seventeen films would have a same-day theatrical and digital release on the streaming service at no extra cost. The move swiftly resulted in strong condemnation from theater chains. CEO of AMC Theaters Adam Aron described the decision as one that would “sacrifice a considerable portion of the profitability of its movie studio division” at the expense of its theater partners.
Since then, HBO Max has seen its subscriber base increase substantially while a majority of Warner Bros’ releases have become box office disappointments, falling short of expectations and in some cases outright failing to break even. Malignant grossed $33.2 million against a $40 million budget while The Suicide Squad grossed $167.4 million on a $180 million budget.
Although it’s impossible to determine to what extent this strategy affected its box office revenue, early estimates by research firm MoffettNathanson had it missing out on north of $1.2 billion. Furthermore, the financial consequences of this decision are believed to have contributed to AT&T’s decision to divest from WarnerMedia just three years after acquiring the company.
Disney, however, had a different approach in its film rollouts. Its strategy evolved as it experimented on a case-by-case basis. For example, Luca was released exclusively on Disney Plus for its subscribers at no extra cost, whereas Mulan was also released on the platform but at a premium fee of $29.99.
In July of this year, all eyes were on Black Widow as it launched with a simultaneous theatrical and premium streaming release. In its opening weekend, it managed to muster $80 million in domestic box office receipts along with $60 million in worldwide streaming revenue, which industry analysts hailed as impressive. However, in its second weekend, it suffered a massive drop, falling to $25.8 million domestically. Shortly after, the National Association of Theater Owners released a statement, remarking “Despite assertions that this pandemic-era improvised release strategy was a success for Disney and the simultaneous release model, it demonstrates that an exclusive theatrical release means more revenue for all stakeholders in every cycle of the movie’s life.” By close to the end of its initial run, it had accumulated over $125 million on Disney Plus, prompting Black Widow star Scarlett Johansson to file since-settled lawsuit alleging that the contract-violating release strategy caused the actress to lose out on $50 million in profit.
With the Delta variant surging and no clear signs of box office recovery, experts were uncertain if it would be wise for companies to return to traditional release strategies. Then came Shang-Chi. In what Disney CEO Bob Chapek described as an “interesting experiment,” Disney greenlit an exclusive theatrical rollout for the Marvel Studios production just weeks before its release. On its opening weekend, the film surpassed industry expectations, raking in $71.4 million domestically. Its success prompted Disney to confirm that the rest of its slate for the year would be released exclusively in theaters. Sony followed by moving the release date of Venom: Let There Be Carnage up by two weeks.
Despite this, other companies are still pushing forward with simultaneous release plans. NBCUniversal’s Peacock served as the digital platform for the dual release of recent flick Halloween Kills while Paramount expects to release Clifford the Big Red Dog on Paramount Plus.
Nonetheless, current projections by analytics firm Gower Street have the worldwide box office rising to $21.6 billion this year, nearly double the amount produced in 2020. As the industry continues to recover, it seems as if studios are gradually returning to traditional rollouts. Not yet in the clear, however, studios remain prepared to make precautionary release changes if need be.