Hollywood is in the midst of a huge industry shift. With the new emergence of streaming service giants like Netflix and Amazon, the way content is presented to wide audiences is changing drastically.
Netflix has been buying up movies at many festivals and signing talent like Adam Sandler to multi-movie deals so they can bypass the theater and bring them directly into subscribers homes. But it’s not just Sandler. Brad Pitt teamed up with Netflix for War Machine, indicative of the ever-evolving movie viewing landscape.
And while Hollywood relies on big spectacle action/adventure and sci-fi movies to keep movie theaters alive, this summer has been making Hollywood producers and studios sweat like never before.
“The film business is off to a rocky start this summer as Hollywood box office revenue declined ten percent from 2016 through the first three weeks of the season after back-to-back weekends of big-budget flops.
Alien: Covenant became the latest big-budget disappointment this weekend after opening with a domestic total of $36 million, off from analysts’ projections of around $40 million and the previous debuts of 2012’s Prometheus ($51 million) and 2004’s Alien vs. Predator ($38 million).
While the Ridley Scott-directed sequel in the long-running sci-fi horror franchise eked out a first-place finish at the box office, Twentieth Century Fox reportedly spent $100 million on the film and likely much more on marketing, meaning the film will have to perform exceptionally well overseas if it is to make a profit.
The Michael Fassbender-starring film has pulled in $117 million in global receipts thus far, according to Box Office Mojo. It launches in China in mid-June.
Alien‘s lukewarm reception follows last weekend’s disastrous rollout of Warner Bros./Village Roadshow’s King Arthur: Legend of the Sword, which launched to $14.7 million domestically against a reported production budget of $175 million, before marketing costs.
Warners and Village Roadshow are seemingly looking at a writedown in the tens of millions as the Charlie Hunnam-Jude Law fantasy action flick collected an additional $6.85 million in in its second weekend to bring its global tally to just $97 million, far behind what the film will need to earn overseas to break even.
With those two big-budget misfires and a few other other underperformers — including the Amy Schumer-Goldie Hawn kidnap caper Snatched (which dropped 61 percent in its second weekend for a cumulative domestic total of $32.7 million against a $42 million budget) and the YA sequel Diary of a Wimpy Kid: The Long Haul — this year’s box office revenue is down ten percent through the first three weeks of summer, according to the Hollywood Reporter, which cited data from industry tracker comScore. The numbers are down 20 percent when compared with the summer of 2015.”
But there’s an underlying factor here that seems to be overlooked by most. Dramas and comedies having box office success has become so rare that studios are forced to go straight to video-on-demand since the high-cost of a theatrical release destroys the individual movies profit potential.
This means that genre-based comedies and dramas have rapidly declined because they ultimately have to rely on Netflix and Amazon picking them up in order to be funded and produced. And a lot of times, the production budget outweighs its potential profits and therefore don’t get made.
“The bleak box office news comes as a battle for the future of the business is being waged at the industry’s prestigious Cannes Film Festival in France this week.
The festival announced that beginning next year, films submitted for inclusion in the program must screen at movie theaters ahead of their festival debut. The rule was a direct shot at Netflix, which has two titles in competition at this year’s festival, Okja and The Meyerowitz Stories, neither of which received a theatrical release.
Director Pedro Almodovar, a member of this year’s Cannes jury, defended the new rule at the opening of this year’s festival, telling reporters that films must be seen on a big screen to be appreciated.”
But the Emmy and Golden Globes Awards include streaming shows in their television categories, so why does a film need to be released in theaters in order to legitimize it for festivals and the Academy Awards?
The industry is changing whether the filmmaking traditionalists like it or not.