Several prominent box-office successes have highlighted the benefits of theatrical releases over streaming exclusivity—proving it can be far more profitable for movie studios.
- The last few weeks have seen several high-profile box office successes, with John Wick Chapter 4 grossing $313 million, Scream VI grossing $162 million, and The Super Mario Brothers Movie grossing a record $375.6 million for its opening weekend.
- As we previously reported, Amazon Prime Video grossed $268 million after releasing Creed III in theaters, after initially planning to drop the film on its streaming service.
- Studios now recognize that theatrical windows are more profitable than streaming services, writes Roth Capital Partners Analyst Eric Handler, who recently advised investors to buy into IMAX Corp amidst a predicted strong year for movies.
- Disney+, Hulu, Netflix, Paramount+, and HBO Max all reported double-digit losses in 2022.
Why It’s News
The “streaming wars” have proven to be a billion-dollar setback for almost every major company that has attempted to break into the market. While niche services have succeeded at attracting reasonable audiences and the pandemic pushed audiences toward home entertainment, theaters provide greater profit and options—giving studios multiple revenue streams from theaters, video rentals, DVD sales, subsequent streaming deals, and television broadcasts.
Movie theaters have returned to near pre-pandemic levels of visiters, with Avatar: The Way Of Water and Top Gun: Maverick setting box office records. Theater attendance has increased by 589.5% since 2021, Future Party reports.
Following the success of Creed III, Amazon’s most recent film Air grossed $34 million during its opening weekend. The streaming service plans to double down and theatrically release 12 to 15 films per year. AppleTV+ has also announced plans to release Martin Scorsese’s Killers Of The Flower Moon and Ridley Scott’s Napolean in theaters prior to being released on the streaming service.
“Quarter-to-date box-office revenue in quarter one is up a sizeable 44% (albeit off of a very easy comp and is still down about 27% versus 2019). We estimate total revenue for the quarter could reach $1.6 billion, up 20% year-over-year but down a steep 33% compared to quarter one 2019,” says media analyst Handler.