27 JAN 2023

How are studios balancing theatrical exclusivity with early SVOD premieres?

Approximately seven weeks between theatrical and SVOD premieres is now common, regardless of how well the movie is performing in cinemas, Ampere Analysis noted in its latest report.

27 JAN 2023

"Top Gun: Maverick" (Paramount)

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Between January and November 2022, Disney, Paramount, Universal and Warner Bros. Discovery distributed 36 US-produced movies with an exclusive theatrical premiere. When the exhibition industry was recovering from the Covid-19 pandemic in 2021, several studios negotiated with exhibitors a minimum 45-day window of theatrical exclusivity before their movies arrive on SVOD platforms. As a result, approximately seven weeks between theatrical and SVOD premieres is now common, regardless of how well the movie is performing in cinemas, Ampere Analysis noted in its latest report.

This window was greater than seven weeks for only a third of the observed titles. Of these 12, Universal accounted for five – the largest share among the four major distributors. With 209 days, Paramount’s “Top Gun: Maverick” had the longest period between theatrical and SVOD premieres, and earned US$719 million at the North American box office.

Meanwhile, Warner Bros. Discovery’s “The Batman” debuted on HBO Max just 45 days after its theatrical premiere, sooner than “Jurassic World: Dominion” and “Black Panther: Wakanda Forever,” despite earning more at the box office in its fourth week of release than both of those movies. This is not a product of Warner Bros. Discovery’s inflexibility around the 45-day window; “Elvis” premiered on HBO Max 70 days after its initial release in cinemas, and “DC League of Super-Pets” 59 days.

“Studios’ strategies differ between movies because of the role they can play in subscriber attraction and retention for direct-to-consumer services. Early SVOD debuts are also a way to compete with Netflix’s dense release slate – hence the popularity of the minimum window of theatrical exclusivity,”  commented Rahul Patel, Senior Analyst at Ampere Analysis and the author of the report.

In the cases of “The Batman” on HBO Max and “Doctor Strange in the Multiverse of Madness” on Disney+, there is the additional factor of consumers’ anticipation for titles that fall within these platforms’ core content brands. If DC and Marvel are key to fanbases continuing to subscribe to a service, there is further pressure for Warner Bros. Discovery and Disney to rebalance their strategies in favor of earlier SVOD arrivals. On the other hand, an adult-targeted drama such as “Elvis” is less vital to the HBO Max brand, allowing for greater flexibility to extend the theatrical exclusivity significantly beyond 45 days, especially if the title is performing well in theatres, according to the report.

Ampere also observed Disney has shown a willingness to wait more than 45 days before bringing a title to SVOD – the “Black Panther” sequel will arrive on Disney+ 80 days after its theatrical premiere – but not to the same extents Paramount did with “Top Gun: Maverick” or Universal with “Jurassic World: Dominion” and “Nope” (119 days each). However, a longer span akin to these releases may be considered for “Avatar: The Way of Water.” The title exists outside of Disney+’s core content brands (Classic Disney, Marvel, Star Wars, Pixar and National Geographic) and is expected to continue to earn significant revenue at the box office far beyond its initial release.