The Rise of Streaming
When streaming services first hit the scene in the mid-aughts, the distribution method wasn’t taken seriously, particularly by network and studio executives and distributors. But, over the years, it quickly grew into a staple of society, becoming a primary method of consuming television and cinema content as millions switched from traditional cable to internet streaming services every year.
As streaming services developed, so did the gravity with which networks and production companies regarded it. More and more studios began launching their own services, competing for a piece of the pie.
And then, Covid-19 hit Hollywood and America.
Theatre Closings in 2020
Covid-19 brought major changes to how Hollywood treats streaming. Suddenly (in Hollywood’s view), not only was streaming a viable alternative to physical home media or traditional theater releases, it became the preferable option, and in many cases the only option.
In March of 2020, the biggest theater chains in the country began closing their theaters across the US (joined by many others throughout the world), either voluntarily or, in some cases, due to local lockdown procedures.
This devastated the films currently in theaters just as the industry was picking up from the post-Christmas slump, with films like Pixar’s Onward or Paramount’s Sonic the Hedgehog having their release cut short and suffering significant box office losses.
Streaming as an Alternative
Enter streaming services to save the day, as studios scrambled to salvage what they could of their plans for big box office releases. With Onward only having a little over a week in theaters before its release was clipped, Disney made the decision to shuttle the movie to their streaming service, Disney+, just a few weeks after its theatrical debut. Sonic the Hedgehog was similarly pushed to digital release on March 31st, though with more time in theaters and a bigger box office take, its outlook fared better and was released to a longer window of VOD, then available for digital rental, rather than released to a subscription-based service.
Typically, before Covid-19, movies would see around 4 months or more of a gap between their theatrical release and home release (including digital distribution). The studios have been fighting to shorten this gap but pushback from theater has made that difficult. The slate of movies having their digital release significantly moved up was a major change in operations.
The success of moving films like Onward or Sonic the Hedgehog to early streaming/digital distribution remains strictly ambiguous as the studios are reluctant to give hard details, but we do know that streaming can be a viable alternative to theatrical distribution. This proof came in the unlikely (given the circumstances) success of Trolls World Tour, the sequel to the commercially successful (and critically lukewarm) Trolls.
An Unexpected Journey
Trolls World Tour was the first major studio release after the widespread lockdowns and theater closings to have its initial release as digital (along with a limited theatrical release in what theaters remained open). This method of distribution, sometimes referred to as day-and-date release or simultaneous release, wasn’t unheard of but was typically reserved for films with low box office expectations and/or movies with a narrow target demographic.
Trolls World Tour was the first expected to have a major box office release, to have that taken away by Covid-19, and shift its distribution method entirely to focus on digital. It debuted as a rental on various platforms, and having brought in over $200 million across its platforms, was far beyond expectations. It may not be the same level of financial success its predecessor was, but given the unexpected adjustment of distribution, it more than proved streaming of major box office releases a viable strategy, at least as a Covid-19-friendly replacement to a major theatrical release.
But not every movie would prove as successful using that format. Mired in controversy, Disney’s release of Mulan met serious issues. Despite carrying a subscription fee, Disney+ introduced the movie to its platform as premium content, charging an additional fee to view it. This is a change from other similar releases, like Onward or the (at the time) yet-to-be-released Soul, both of which premiered on the service included with the subscription fee.
Though it’s unclear exactly how much Mulan made (or lost) from its Disney+ premiere, its underperformance at the box office and the lack of Disney touting it as a success (as most studios tend to do when they’re happy with financial performance) make it clear that Mulan did not achieve the same overperformance Trolls World Tour did.
But each of those releases, as well as those prior, carried their own peculiarities and special circumstances: Trolls World Tour was primarily aimed at young children, making home-viewing an attractive alternative to a family spending boatloads to take everyone to the theater, while Mulan was hit with controversy after controversy along its path, making it difficult to tell how much of the release method may or may not have contributed to financial underperformance.
But the studios weren’t ready to give up on theaters just yet.
Hollywood Strikes Back
As studios struggled to find a way to keep some semblance of their theatrical release schedule, particularly with connected universes becoming more integral to many studios’ long-term plans, Christopher Nolan decided to lead the charge in saving theaters by keeping his planned summer tentpole blockbuster Tenet as a theatrical release. Nolan has long been known for creating massively budgeted movies– bringing in massive financial returns– with a big cinematic spectacle experience, and he, with the support of Warner Brothers, wanted Tenet to be no different, both for the movie’s sake and for the sake of struggling theaters.
The release of Tenet was pushed back several times from its initial summer release date as hopes that Covid-19 troubles would be overcome, finally landing on a release date rolling out through late August and early September.
Though optimism was high, the release of Tenet was only ever an experiment, and proved to be wishful thinking as the theater crowd just wasn’t there to support the movie. Even where theaters remained open, the film struggled to find an audience and ultimately was a box office bomb. One way or another, studios would have to rethink their release schedules for their blockbusters, or risk major financial losses as expensive, completed-or-nearly-completed big budget films like Black Widow and the James Bond film No Time to Die wait for their chance to be seen.
New Strategies, New Troubles
The problem with holding a movie back isn’t just the loss from the delay, but the cascading problems caused when all studios do it. There’s a major build-up of movies put on hold due to Covid-19 crowding the eventual release window as all studios will try to get their movies released as soon as possible once wide theater audiences come back.
Warner Brothers’ solution to the problem, after seeing the box office failure of Tenet, was to scrap the whole theatrical plan and release everything through 2021 on their streaming service, HBO Max.
This presents a new experiment, opposite their decision to push ahead releasing Tenet in theaters, and has received major pushback from other parties who stand to lose money from a lack of box office release, or are unhappy the films will be released in what they consider a less favorable viewing experience (including Nolan, who still believes in the sanctity of the cinema). Warner Brothers even faced initial lawsuit threats over the decision.
Disney, on the other hand, is moving forward with a compromise: keep some of their major releases tentatively scheduled for theatrical release in 2021 after having pushed others to streaming (like Hamilton and Soul), while creating even more content cementing subscription-based streaming as a central, though not the only, platform for their visual media content, abandoning the Mulan model of charging an additional premium fee.
Where Does That Leave Us?
This leaves Hollywood with little to go on in making a plan to move forward. Will streaming be the way to go in 2021, or will studios pull back and look for more of their traditional box office success?
For the time being, advancements from the studios in pushing their streaming services, like shake-ups for HBO Max, waves of new series planned for Disney+ and the ever-increasing budget for original content from Netflix, it looks like streaming is going to be taking over as theaters try to make the most of what they have.
Once more investments take hold in streaming, it’s unlikely to swing away from it too far, but it’s just as unlikely studio and network execs will be quick to forego their traditional models altogether.
Without clear evidence from the history of the Covid-19 theater closures and push to streaming, there’s no way to know how quickly a streaming takeover will last, if it happens at all, but it’s likely we’ll at least see it taken seriously as a primary distribution path for the next year.