The Impact of Streaming Services on Box Office Collections A Look at the Numbers

The market that was once known as home video and included digital sell-through, rentals, as well as physical discs, continues to exhibit a prominent influence in Hollywood, with studios now having to rework on their streaming tactics and focus on making a comeback as far as box office collections are concerned. 

Moris Media, a leading PR boutique and digital marketing agency, spoke to some of the top management personnel in leading Hollywood studios to get an in-depth perspective on the impact that streaming services are having on box office collections. 

According to one of them, the streaming strategies that were pursued earlier happened to be more or less predictable and the patterns were recognisable despite different film genres being involved. This practice was followed for a number of years wherein 74 days after the theatrical release, films would enter the sell-through market while two weeks subsequently, they would be available in the rental market. Presently due to varying ambitions and asset mixes, every studio is pursuing a unique endeavour. 

While Hollywood attempts to re-establish its balance, a substantial amount is now at stake. Digital Entertainment Group, a collaborative body involving studios, technical equipment suppliers, retailers, and more stakeholders state that the 2022 figures for rentals and sales spanning transactional VOD, disc, and digital subscriptions touched $6.3 billion. As Disney+, HBO Max, Paramount+, Peacock, and more players started competing with Netflix, subscription streaming started generating much higher revenues. 

The business has reached a fork in the road as a result of the streaming craze, which was catalysed by the global COVID-19 pandemic, even though it's not the type that would be making headlines. Despite the fact that North American box office is 37% ahead of last year's year-to-date level and confidence is returning about the ability of theatrical to generate downstream income, studio executives have been perplexed by the most effective strategies to use once the films are out of theatres.

Let us examine the paths chartered by the most recent blockbuster releases. In February, Black Panther: Wakanda Forever, which grossed more than $800 million at the worldwide box office following its premiere last November, debuted simultaneously on Disney+ and sell-through. With the exception of Redbox kiosks, the film has not yet been made available for renting. With Bog Iger returning as Disney CEO, the company abandoned the Premier Access upcharge approach it utilized during the epidemic and is now rethinking Disney+. It is tough to imagine a recurrence of Encanto, which was only in cinemas from Thanksgiving to Christmas in 2021 for a month and grossed $257 million worldwide before moving to Disney+. Three weeks after its theatrical launch, a very recently premiered family drama, Puss in Boots: The Last Wish, was made available on premium VOD. 

Some executives with a stake in the game believe that an increased preference to streaming leaves money on the table, but NBCU insiders claim that Universal is transferring more box office earnings to home entertainment revenue than it did prior to the outbreak of the pandemic.

Executives still believe that as soon as a piece of video is uploaded on SVOD, it loses all value. Studios should ideally be making money from material in any manner possible, and if they are not doing that, they are comprising on their self-interests. Furthermore, they are not fulfilling their commitment to maximize the value of what their members have helped develop.

More than a year after the conclusion of the Warner Media experiment known as Project Popcorn, the irresponsibility of that decision has not been fully assessed. As a result of talent being compensated in a manner that treated every release to be a big hit, complacency and pandemic expediency took hold.

A distribution veteran who has been a warrior in the streaming battles suggests that customers opting to rent a movie as opposed to "giving blood" by committing to a recurring monthly payment might help maintain the viability of the transactional window. He feels that with the increasing number of SVOD providers, the value of VOD remains. 

Sony’s executives are optimistic about conventional home entertainment in the long run, and feel that the studio's dependence on a minimum 46-day theatrical exclusivity as a factor in enhancing those latter windows. Sony's model gives a fundamental foundation, determining the optimal technique is not the plug-and-play variant but the situation is actually far more complex. 

In the modern times, films are not only having to compete with each other but have to also consider fresh releases on streaming sites.