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While direct-to-streaming movies dominated the COVID years in a rush to catch up with Netflix’s original library, it turns out that releasing movies in theaters is really the best way to capture the most engagement when it lands on a streamer.
The Big Picture: A lot of money was spent to ramp up production during the streaming wars. But, when it comes to movies, many barely made a blip on the cultural radar. Why? It turns out that traditional marketing campaigns, press tours, and box office numbers have more sway than an algorithm… unless you’re Netflix.
Behind the Scenes: In modern Hollywood, releasing a movie is no longer about success on one type of screen.
- While the $250 million Amazon movie Red One seems to have flopped in theaters with $80 million in domestic ticket sales, it scored the biggest debut ever on Prime, scoring 50 million viewers.
- NYT reports that since August 2022, 65% of Netflix’s top ten English-language movies were licensed from other studios after they played in theaters. Sony Pictures, for example, saw 32 of its films land in Netflix’s top ten since 2021.
- And there’s a halo effect for franchise films. Paramount+ reported that when A Quiet Place: Day One premiered on the service, engagement with other A Quiet Place titles increased by 207%. There was a similar effect with the Mission: Impossible movies.
- Now, studios are even using their streamers to provide exclusive sneak peeks of titles coming to theaters, growing into a unified movie ecosystem as Disney did with Inside Out 2 on Disney+ and Kingdom of the Planet of the Apes on Hulu.
The Future: During Disney’s last earnings call, CEO Bob Iger said, “A successful Disney movie today drives more value than it ever has in the past” — meaning a movie that’s successful in theaters can also be successful on streaming and then successful in the parks, etc. It’s a steady waterfall of revenue over time. So, while Netflix successfully sticks to its guns on streaming only releases (there’s just no other platform with the same scale and impact), expect the theatrical-movie calendar to really beef up over the next few years.
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