by Conan Simmons – July 12, 2021 – 7:47 pm
For the past year Hollywood has been experimenting with streaming releases. As the pandemic kept theaters closed the best option at the time was to send new films onto studio owned streaming platforms. Eventually, as theaters reopened, day-and-date releases have become more common in spite of the obvious box office cannibalization this strategy causes.
The most interesting part of Hollywood’s great streaming experiment was the fact that the studios never actually revealed how much a film would make streaming. That is, after theater owners expressed outrage early last year when Universal took the initiative by having their animated children’s film ‘Trolls: World Tour’ go straight to video on demand. Universal went on to claim ‘Trolls: World Tour’ earned $100 million from TVOD, or Transactional Video On Demand which is when you pay a service like Vudu a rental or purchase fee in exchange for the right to stream the film.
From that moment on Hollywood studios have kept unusually silent about how much their films make streaming. Remember, show business is built around gaining attention for the famous celebrities that appear in movies, how much a movie makes at the box office and how many prestige awards they win. Even tv shows tout how many viewers they get each night. So why the exceptional silence around streaming earnings?
Sunday morning brought an unprecedented and highly unexpected announcement from one of the biggest studios in Hollywood about a film in one of the biggest franchises in movie history. Disney revealed early Sunday morning that the latest installment of the Marvel Cinematic Universe, ‘Black Widow’, earned $60 million streaming on Disney+. With a weekend box office take of $80 million, that brings ‘Black Widow’ to a total of $140 million on its weekend debut. Impressive numbers.
This revelation comes as a sharp turn from how Disney has handled previous big films released straight to their streaming service. Disney+ charges a monthly fee and on top of that a $30 surcharge for Premium Access to big movie releases like ‘Black Widow’. This PVOD, or Premium Video On Demand, is slightly different from TVOD. Whereas TVOD is predominately rentals for a set period of time, PVOD after purchase is available just like the free offered content on the service. Obviously PVOD sales will ultimately affect the ancillary revenue a film can make from rentals much like streaming day-and-date affects theatrical box office.
It could be argued that had ‘Black Widow’ not been available to stream it could have earned $140 million in theaters. Realistically it may have garnered around $116 million but that is all speculative.
So why the sudden Sunday reveal?
As much as everyone is clamoring about Hollywood becoming more transparent around streaming numbers that may not be the case in the long run. Looking at box office earnings for Friday and Saturday, ‘Black Widow’ made $39.5 million Friday compared to $23.3 million Saturday. That’s a drop of a significant 41%. While it’s not unheard of for a film to make a little less going into Saturday, 41% is a pretty hard drop and practically unheard of for a Marvel movie.
How does it compare Friday-Saturday with other movies at the box office?
‘In the Heights’, the Lin-Manuel Miranda musical that was highly anticipated to be a summer blockbuster, underperformed on its opening weekend reaching only as high as second place at the box office. A day-and-date release streaming on HBO Max, ‘In the Heights’ dropped out of the Top 5 the following weekend. The movie is still in theaters (and streaming) and over this last weekend enjoyed a gain of 27% as it went from earning $185k on Friday to $235k on Saturday.
‘F9: The Fast Saga’ starring Vin Diesel may be in second place with $10 million over the weekend but unlike ‘Black Widow’ it was able to gain 24% with $3.4 million Friday and an additional $4.2 million on Saturday.
Another Disney film that is a PVOD day-and-date release on Disney+, ‘Cruella’ starring Emma Stone, made $775k at the box office on Friday and $900k on Saturday for a 16% gain.
A more recent PVOD day-and-date release, ‘The Boss Baby: Family Business’ streaming on Peacock, earned $2.8 Friday with $3.2 million Saturday for a 14% gain.
In fact, every film in the top ten at the box office this weekend enjoyed gains on Saturday with the lone exception being the number one film ‘Black Widow’.
The Marvel action flick has received a fair number of mixed to negative reviews over the weekend. Most pointing out the poor handling of the main villain, the Taskmaster. On the positive side, there is practically universal praise for Florence Pugh as the films best standout performance. Whether the reviews or the streaming availability to blame for the 41% drop on Saturday will likely remain a mystery for the near future.
It is likely that Disney revealed the impressive $60 million ‘Black Widow’ made streaming as a way to deflect from any perceived box office floundering. If so, it worked wonderfully because all anyone can talk about in Hollywood right now is the streaming numbers.
Let’s take a quick look at how those streaming numbers break down.
A point of bullish optimism is that Disney gets to keep all of the $60 million as though it’s pure profit for the film. That’s not exactly the case. Having a budget of around $200 million and a marketing budget of roughly the same means ‘Black Widow’ will have to make about $500 million before Hollywood considers it to break even. With the film currently performing well in overseas markets it’s very likely to hit that number within the next week or two.
Does all of that $60 million go to cover the budget of ‘Black Widow’?
No. Disney+ is a streaming platform that has overhead expenses to cover and given that Marvel, which is owned by Disney, is the production company of the film Disney+ is not. Therefore, Disney+ needs to take a cut of the streaming earnings. Traditionally a distributor will take approximately 35% of the producers gross, which are gross earnings after theater exhibitors take their cut. Given that the distributor and exhibitor are one and the same in this case, Disney+ can be assumed to take 35% of the $60 million.
Still doesn’t mean every dollar is being kept by Disney.
Credit card processing fees for online purchases will take a bite out of the $60 million spent to stream ‘Black Widow’. Credit card processing fees can run around 3.5%. Add that to the distributor’s fee, we’re looking at just under 40%. If ‘Black Widow’ earned $60 million on Disney+ after the split the film is looking at a total of $36 million. Still, very good numbers and worth telling the world of the success.
So why didn’t Disney announce streaming revenue for previous big releases?
Originally there were outlets reporting late last year that ‘Mulan’ earned $270 million from streaming. ‘Mulan’ skipped theaters altogether here in the U.S. and Disney never confirmed the numbers. The optimism Disney showed Sunday bragging about $60 million it is abundantly clear that those third party reports of ‘Mulan’s windfall were highly false. It’s since been rumored ‘Mulan’ lost the studio nearly $150 million making it the biggest bomb of 2020.
As Disney still remains silent on the streaming earnings of ‘Mulan’ and others we can only make estimates based on third party sources. Most likely for ‘Mulan’ it made $30 million streaming, which would be worth bragging about at the time unless you make the overhead subtraction bringing it down to $18 million. Not great for a film that cost $200 million to make and isn’t earning anything from theaters. Combined with what ‘Mulan’ did earn overseas that $18 million puts it squarely in the frame of losing $150 million for the studio.
Disney’s animated film ‘Raya and the Last Dragon’ opened to less than expected box office numbers but did manage to stay in the Top 5 for 14 consecutive weeks. A day-and-date release for Disney+ PVOD, it looks to have grossed $42 million from streaming. Again, pretty good numbers and again, Disney still has not confirmed the streaming earnings for ‘Raya and the Last Dragon’. Using the overhead subtraction we may see the reason for the studio’s silence. The gross after overhead expenses totals $25 million. Not too shabby. Perhaps the studio decided not to flaunt the figure in fear of ruining the film’s long running success at the box office. If that’s the case it’s the best evidence yet that streaming hurts box office revenue.
Looking at ‘Cruella’, it performed decently in theaters earning $53 million before dropping out of the Top 5. The movie is still in theaters, as stated above, and combined with overseas markets it’s much closer to being profitable. Disney still is quiet about ‘Cruella’s streaming earnings and when you see the numbers you see why. ‘Cruella’ looks to have made only $20 million streaming and after overhead expenses that only comes to $12 million. ‘Cruella’ may do well in theaters but underperforming ‘Mulan’ on streaming is definitely reason not to say anything.
Then there’s Disney’s ‘Soul’, the multiple Oscar winning animated film they called a hit. While ‘Soul’ did get a plethora of good reviews it was only available on streaming and in this case it was free with subscription to the platform. Releasing the film this way suggests Disney absorbed the costs of the $100 million budget hoping to make it back through subscriptions. Again, Disney has not revealed the streaming numbers for ‘Soul’ but Nielsen ratings show it was streamed for 16 million full runs. Had ‘Soul’ been PVOD and 16 million purchases were made then after overhead expenses ‘Soul’ would have earned only $9.6 million. The lowest number of all the ones mentioned and clearly a very good reason for Disney to stay so quiet about streaming revenue.
Disney isn’t the only studio staying quiet about revenue. HBO Max won’t reveal earnings for ‘Wonder Woman 1984’ or ‘In the Heights’ or any of their other streaming movies. Universal stopped after ‘Trolls: World Tour’. Paramount+ is among the most opaque of the streaming studios so don’t expect a reveal when it comes to ‘Snake Eyes’ later this month. Peacock, as stated above, is silent. Netflix, not charging anything beyond a subscription fee, also doesn’t always reveal how many streams a movie or show gets. Amazon just last weekend advertised heavily about how ‘The Tomorrow World’ starring Chris Pratt was a huge success becoming the number one streaming movie every, yet they still haven’t shown the numbers to back that claim up.
Perhaps Sunday was the harbinger of transparency to come for Hollywood streamers, or perhaps it was just a momentary distraction.