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Perception is everything.
A day after The Walt Disney Co. announced that Marvel Studios’ Black Widow debuted to $218.8 million — including $60 million from Disney+ Premier Access and $158.8 million in global box office — the company’s stock jumped 4 percent July 12 while theater stocks dipped across the board.
Disney’s ability to boast a $200 million-plus worldwide opening, without relying solely on box office, certainly pleased investors, but traditional Hollywood studios and theater owners are less than enthusiastic about trumpeting streaming success during challenging times for moviegoing.
Until now, no traditional studio has publicly shared viewership numbers for any of the multitude of their movies that are debuting simultaneously in the home because of COVID-19 (the lone exception is Universal’s Trolls World Tour).
The Black Widow reveal could mark a paradigm shift and prompt others to share viewership data. (In this case, it equated to at least 2 million households.)
Sources say Disney is likely to announce Disney+ Premier numbers for Jungle Cruise, starring Dwayne Johnson and Emily Blunt. The event pic sets sail July 30 in theaters and, like Black Widow, simultaneously on Disney+ Premier Access for an additional $30.
Conventional wisdom suggests that Disney will revert to a traditional theatrical release for its movies this fall when the box office recovery is further along, while Warner Bros. has said it will end its current practice of debuting movies day-and-date in cinemas and on HBO Max in 2022. An ad-free HBO Max option, at $15 a month, doesn’t charge extra for new movies in a strategy to competitively grow subscribers but could disclose household numbers.
Wall Street analysts and film financiers believe that day-and-date releases cannibalize box office and diminish other ancillary revenues. Imax CEO Richard Gelfond agrees. “When other studios have analyzed the piracy rate and the cannibalization coming out of day-and-date release, they decided to go to a 45-day window,” Gelfond says. “Unless that data is very different here, I assume Disney would come to a similar conclusion.”
Adds Wall Street analyst Eric Wold of B. Riley Securities, “We are in a difficult environment right now. Kids may not be vaccinated and then there’s the Delta variant. Disney had to be flexible.” He also notes that only 2 million households paid to watch Black Widow out of Disney+’s 100 million-plus customer pool. “They haven’t shown that they have that much of a base in the home,” he says.
Yet Disney gets to keep the entire $60 million in premium video-on-demand revenue from the Black Widow‘s Disney+ debut, unlike box office receipts, which are split with cinemas.
Black Widow, starring Scarlett Johansson, was certainly no slouch at the box office and boasts the biggest domestic debut of the pandemic era at $80 million. However, many tracking the standalone superhero pic believed it would clear $90 million to $100 million based on early traffic, but those hopes were sidelined when the tentpole dropped a steep 41 percent from Friday to Saturday — unheard of for a Marvel pic. Most have declined 15 percent or less.
That could well be due to the option of being able to watch it at home, according to Screen Engine/ASI. The leading Hollywood research firm found that Black Widow cannibalized box office grosses more than other day-and-date offerings — including Disney+ Premier offerings such as Cruella — among customers who would have waited to watch it in a theater had it not been available immediately on premium video on-demand (43 percent versus a norm of 40 percent).
At the same time, Black Widow did help attract new customers (39 percent signed up to see the film, versus a norm of 16 percent), but many were like to cancel their subscription after (62 percent versus a norm of 54 percent). The good news: the Marvel offering did help stem churn and retain customers who might have otherwise ended their membership (36 percent versus a norm of 36 percent), according to Screen Engine.
Disney has indicated that pandemic-era rules are driving current decisions. “Black Widow’s strong performance this weekend affirms our flexible distribution strategy of making franchise films available in theaters for a true cinematic experience and, as COVID concerns continue globally, providing choice to consumers who prefer to watch at home on Disney+,” Kareem Daniel, chairman of Disney Media and Entertainment Distribution, said in a July 11 statement.
But BoxOffice Pro analyst Shawn Robbins cautions, “As more people grow comfortable returning to cinemas, how much money is left on the table by essentially discounting a new release for families able to share one purchase across an entire household, not to mention with friends and extended family?”
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