Will Most New Movies Be Streaming Exclusively Soon?
As the digital streaming era has gained momentum, the concept of whether most new movies will be presented on streaming platforms without opening in movie theaters has become a topic of discussion. Despite the rise of streaming services, it is unlikely that we will see a significant shift in this regard, largely due to the unique experiences and financial models associated with movie theaters.
Reasons Why Movie Theaters Remain Irreplaceable
Firstly, movie theaters serve as more than just a venue for watching films. They are social gathering places where audiences can enjoy large-screen movies and share experiences with their friends. Modern movie theaters, often referred to as cinema and grill experiences, incorporate luxurious seating, gourmet dining options, and state-of-the-art sound systems, transforming the movie-going experience into a premium one.
Similarly, despite the digital revolution in sports broadcasting, fans still choose to attend live games at stadiums. The in-person experience, including the energy and atmosphere, cannot be replicated through streaming. This is no different for public libraries, which continue to be essential cultural hubs, even with the proliferation of digital books.
Financial Models and Revenue Streams
A second critical factor is the financial model of movie theaters. High-budget films generate a significant portion of their revenue through day-one releases in theaters. The revenue model based on numerous ticket sales is substantially different from that of a one-time large payment for streaming rights. A single movie can generate more revenue from the ticket sales of millions of moviegoers than from streaming deals even when the latter might involve higher upfront payments.
Moreover, studios experimented with hybrid release strategies, simultaneously rolling out films in theaters and on streaming platforms. However, the results were not as favorable as expected. For instance, Marvel films during the pandemic faced a significant drop in box office performance when made available both in theaters and through streaming services. This was evident during the release of their first movie in the pandemic, which had a much lower box office performance compared to the subsequent solely theater releases.
Examples and Trends Supporting the Current Model
Several major film production companies, including Marvel and Sony, continue to prioritize theatrical releases over streaming. Marvel movies, for example, have consistently performed better in theaters. The box office performance of their movies, such as the post-pandemic releases, is notably higher when they are theater-only. For instance, movies like Black Widow and Spider-Man: No Way Home made around 430 million and 1.9 billion dollars respectively, far surpassing the combined digital revenue.
These trends suggest that while streaming services can offer convenience and flexibility, they cannot yet replace the immersive and social experience provided by movie theaters. The financial incentives and the distinct appeal of theaters are likely to keep them a preferred venue for high-budget releases in the foreseeable future.
While some may hope for a dramatic shift to exclusive streaming, the data and the current landscape strongly indicate that the traditional distribution model of movie theaters is here to stay, at least for the foreseeable future.