The Future of Movies


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Can't Get Rid Of Theaters That Easily

The smell of buttery popcorn as it wafts through the air, the dim of the lights in the room, and the anticipation for the film to start. Movie theaters are a place that people go to to escape reality while also reflecting on it. 

Noticeably, the decline in movie theater ticket purchases has been at a decline due to video on demand but is it arguable whether it will lead to the extinction of movie theaters. With the occurrence of COVID, it is quite possible that movie theaters will be back in the swing of things and dare I say, on the rise. In this blog, Hollywood Branded discusses the impact of streaming on movie theaters.

The Future Of Movies-2


Let's All Go To The Movies! 

We all have those fond memories of our youth that we hold close. One, or many, might be at a movie theater (if not it's never too late to go). The movies is a church of sorts. People come together at the movie theater to experience something as a community and leave with lessons learned, whether they realize it or not. More importantly, it's much different being there in person than online for a multitude of reasons.

Future of Movies

So with the increase of COVID vaccinations and the number of COVID cases decreasing, it's only a matter of time until people return to what they've been missing since, as Joni Mitchell put it, "you don't know what you've got 'til it's gone.” The questions that lie are whether Hollywood will support this return of movie theaters or contribute to the demise of them?

Movie Theaters COVID

Same-Day Release Of Wonder Woman 1984

It's a battle we're all dying to know who will win: The Movies vs. Streaming. But what is perceived to be a battle between the two, might not be a battle after all.

HBO Max Wonder Woman 1984

Credit: HBO Max

At the end of 2020, AT&T announced that HBO Max closed the year with 17.17 million activated users in only the U.S. (since it is wasn't available outside the U.S.). Divide that number in half and you get about 8.5 million users who watched Wonder Woman 1984 on HBOMax the day of release. In contrast, the $16.7 million domestic box office made from opening divided by the average price per ticket ($9.16), led to a total of 1.8 million people who went to theaters to see the film during COVID on December 25th, 2020. 

Wonder Woman 1984 HBO Max

Credit: Warner Bros. Pictures

Even though domestic opening box office numbers dull in comparison to the estimated amount made through streaming for Wonder Woman 1984, much of the difference is most likely a result of COVID. For the first film, Wonder Woman which came out in 2017, 11.5 million people saw it in theaters. This was calculated by dividing the opening box office number by the average ticket price in 2017. 

Credit: Warner Bros. Pictures

This leads to the rough estimate of COVID deterring about 9.7 million people away from theaters. The difference in the number of people who went to see Wonder Woman in theaters in 2017 vs. Wonder Woman 1984 in 2020 is significant.

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Some may argue that streaming wasn't offered the same day for Wonder Woman as it was for its successor, which would impact box office numbers and gross earnings of the film. Odds are, however, that it would've only increased total dollars earned. It's possible that when paying to see a film, those who prefer movie theaters stick to seeing them there as opposed to paying to see the film on streaming. Therefore, by playing the either-or game, no one wins. 

Wonder Woman 1984 Movies Theaters Covid-19

Credit: Warner Bros. Pictures

Therefore, if an estimate of $173.9 million was raised on the day of Wonder Woman 1984's release from both opening box office and HBO Max subscriptions, and about $103.3 million on opening from theaters alone, Wonder Woman: 1984 raise 68% more revenue combined than theaters alone which is a net win. 

Streaming Services Against Theaters - Movies

Credit: Vandna Daksh

It's no secret that Warner Bros released the film through both methods as an experiment. According to Andy Forssell, Warner EVP and General Manager of WarnerMedia Direct-to-Consumer, "Wonder Woman 1984 broke records and exceeded our expectations across all of our key viewing and subscriber metrics in its first 24 hours." Additionally, Wonder Woman 1984 was found the most-watched among U.S.-based TV Time users from Dec 25-28th.

Andy Forsell HBO Max Warner Bros Wonder Woman 1984

Credit: WarnerMedia

While many people have subscribed to HBOMax to watch the film on demand, with COVID vaccinations increasing the co-viewing will increase. Then how will distributors ensure that they are paid what they're due? It'd be better to cut their losses and release films in the theaters than migrate the film to streaming platforms later.

Movie Theaters Streaming Gen Z Gen Alpha

How I see it, streaming hasn't replaced the theaters but has replaced the need for DVDs and will take the place of DVD releases on the product/movie lifecycle timeline.

Don't Forget About Gen Z And Gen Alpha

Trolls: World Tour also experimented with same day theatrical and video on demand (VOD) release during COVID. The win from their gamble is that Universal/Comcast made about $95 million in revenue within the initial 19 days from VOD rentals alone. The cons, however, are that they probably still would have earned more had the film been put in theaters and/or then released on demand. That way parents who were craving for an escape and change of venue while still entertaining the kids (aka Gen Alpha) could go to the movies instead of opting for a different film or show that would entertain the kids just the same at home. 

trolls world tour

Photo: Dreamworks

Going to the movies, just like a play or concert, is an event. It's an experience that connects people and oddly creates a stronger bond between viewers than VOD does. Perhaps it's the combination of the journey to go to the theater involved with the waiting of the films that bring people closer together. Maybe, because people are forced to return home from the theaters that the conversations that coincide with it enhance the theater experience and make it more memorable and preferable to VOD.

Gen Z Gen Alpha Movie Theaters

Credit: Danny N. Schweers

In a constantly changing digital world, it's important to remember that what people experience when they are young significantly impacts their decisions in the future. That's why market research group, Dynata, found that the Gen Z audience was the only majority group at 60% to say they would return to cinemas ASAP or "relatively quickly" in a survey they conducted. Speaking as a Gen Zer myself, as a child, we didn't have streaming services and would go to the movies to see films we really wanted to when they came out. There's a child-like excitement we feel when we go to the movies since it was what we did as young children and teens. Going to the theaters has a nostalgic feel that has people of all generations coming back for more.

Kids Watching Movie - Trolls Movie World Tour - Streaming Services Movie Theaters

Credit: Shutterstock

That's why it's important for theaters to be utilized especially for children/family films such as Trolls: World Tour, to enhance that connection of friendship and community among audiences and with the film as well. With a stronger connection to the film, the audience will buy into it more, support the franchise, which is a win-win all around.

Trolls Movie World Tour Gen Z Gen Alpha

Photo: Mama's Geeky

It is possible that the reason Gen Z made up the highest percentages for 'Average number of movies watched in theaters monthly among adults in the U.S. as of February 2019 by generation' for one, three, and five or more was because of our exposure to movies theaters at a young age and the positive memories we have associated with them regardless if the movie was good or not.  

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Disney's Raya And The Last Dragon

Speaking of childhood! Disney is a brand near and dear to many hearts of adults and children everywhere. So when Disney decided to release Raya and the Last Dragon on Disney+ for an additional $30 while also in theaters, it's surprising that it didn't do as well as Tom and Jerry in theaters, on opening. Granted that by releasing Raya on Disney+ they made enemies with Cinemark, Harkins, and Canada's Cineplex who then refused to show the film. Most likely, this contributed to their significant low box office numbers upon opening. 

Tom & Jerry and Disney's Raya: The Last Dragon

Credit: Disney, Warner Bros. Pictures

Did Disney fans really let the film flop? Signs seem to point to yes as worldwide revenue for Raya is at $107.8 million while Tom and Jerry is currently at $111.2 million.

Raya And The Last Dragon

Photo: Disney

Although box office numbers suggest that the film did not reach the bar of success, what Disney lacked in box office dollars it most likely made from it's premium release of the film. From the current total box office revenues there is only a $3.4 million difference between Tom and Jerry and Raya. While HBOMax opted to give their subscribers free access to Tom and Jerry, Disney did not and required a $30 payment to see the film on its platform.

Tom and Jerry Box Office Movie Theaters Disney+

Credit: Warner Bros. Pictures

Despite the fact that Disney has not released the number of purchases/streams for Raya on Disney+, they would only need about 114,648 purchases to equate Tom and Jerry's total box office revenue worldwide. Assuming that a mere 1.5% of Disney's U.S. subscribers purchased Raya on Disney+, then Disney exceeded Tom and Jerry's revenue. Disney is continuing the release of their films on Disney+ as well as in theaters which indicates they are recieving a decent inflow of revenue through this method since they are able to keep 100% of the profits they make on Disney+ instead of splitting them with theaters.

Disney+ SubscribersCredit: Statista

What's Next For Films And Theaters?

The "feud" continues between theaters and streaming but it should be viewed more as a symbiotic relationship than an either-or. The reasoning being, if there aren't any good movies to be seen in the theaters, people will be less likely to attend. Furthermore, if there are films released on demand only, films will lose out on some potential fans as theaters provide an unforgettable experience and allow audiences to immerse themselves in the fantasy reality of the film.

Consumer Preference Streaming Movies Theaters

Credit: National Research Group

From a long-term mindset, brands would be wise to choose films that will appear in theaters and later be released on streaming as it increases the ways for audiences to see and experience the film (and therefore the brand) and create a stronger connection with the film and the brand. Additionally, those who attend movie theaters more frequently are more likely to consume more on streaming. With the COVID vaccine, more and more Gen Zers and Millennials are ready to hit the theatersall they need is some new movies to see.

People Watching Films In Movie Theaters

Credit: Shutterstock

So when it comes to films with theatrical releases, brands shouldn't shy away because they could be missing out on being a part of the next global phenomenon

Leverage Films For Your Brand

Loved learning about how films are impacted by streaming and how movie theaters are loved by Gen Z and Millennials? Check out more blogs below to find out how brands can better leverage films in the digital world while strengthening their connection with audiences!

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