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‘Black Widow’: Movie Theater Owners Claim Disney Lost Money on Film

Movie theater operators did not mince words in asserting that Disney left money on the table by putting Marvel’s “Black Widow” on Disney Plus on the same day as its theatrical debut.

Disney announced in March that “Black Widow,” among several of its 2021 films, would premiere simultaneously on the studio’s subscription-based streaming service — for a premium $30 price — and on the big screen while the struggling movie theater industry regained its footing. On July 9, “Black Widow” opened to $80 million in the U.S. and Canada, setting a COVID-era box office record. Disney padded the film’s final weekend tally by reporting the Scarlett Johansson-led comic book adventure collected an additional $60 million worldwide on Disney Plus. That pushed its global haul past $200 million.

Ten days after its domestic debut, the National Association of Theatre Owners, the industry’s main lobbying arm, released a fiery statement that takes aim at “Black Widow’s” rollout. For measure, NATO seemed to like “Black Widow,” calling it “such a well-made, well-received, highly anticipated movie.” Still, the group says the $200-million budgeted “Black Widow” underperformed at the box office and on Disney Plus.

“Despite assertions that this pandemic-era improvised release strategy was a success for Disney and the simultaneous release model, it demonstrates that an exclusive theatrical release means more revenue for all stakeholders in every cycle of the movie’s life,” the statement said.

Of course, cinema operators have a vested interest in preserving some sort of theatrical window. The pushback from NATO comes at a time when the movie business is still struggling to recover from the pandemic. Crippling efforts, film exhibitors say, is the fact that Hollywood studios are no longer putting their movies exclusively on the big screen. Prior to COVID, new releases had to play in theaters for at least 75 days before moving to premium video-on-demand. Now, that’s no longer the case. Many buzzy titles to premiere in the past 18 months, including “Wonder Woman 1984,” “Godzilla vs. Kong” and “Cruella,” were also available concurrently on various streaming services. The two highest-grossing movies of the year, “A Quiet Place Part II” and “F9,” were initially only available to watch at multiplexes.

Hollywood studios and movie theater operators have a historically contentious relationship, with the pandemic shifting the power overwhelmingly in favor of film distributors. Yes, studios need movie theaters to generate profits on mega-budgeted tentpoles, but COVID proved that without compelling content to show on the big screen, movie theaters don’t have as much to offer. The hot-and-cold factions recently got in a public spat when several theater chains, including AMC and Regal, threatened to boycott Universal’s movies after the studio flirted with the idea of day-and-date releases. They finally set aside that particular feud in the name of money. Theater owners were similarly miffed when Warner Bros. announced its entire 2021 film slate would premiere on HBO Max and in theaters on the same day.

Without a hybrid release, NATO predicts that “Black Widow” would have secured a much larger opening weekend, somewhere north of $92 to $100 million. And while the film soared past the opening weekends of recent releases like “A Quiet Place 2” and “F9,” its ticket sales quickly dropped off. In its sophomore outing, “Black Widow” collected $26 million, a huge 69% decline. Or, as NATO put it, a “stunning second weekend collapse in theatrical revenues.”

Disney declined to comment. However, insiders say the company is attempting to reach customers at every comfort level while the world emerges from COVID. It’s also worth noting the pandemic hasn’t entirely abated, and even vaccinated people have expressed hesitations about returning to the movies. Adding to anxieties, the highly contagious Delta variant has driven a spike in infections and forced Los Angeles, the largest moviegoing market in the country, to reinstate its mask mandate. Despite actor Vin Diesel’s loud proclamation, cinema isn’t entirely back just yet.

In the case of “Black Widow,” NATO claims its financial upside isn’t as robust as some initially perceived. When it comes to box office grosses, studios have to split the profits 50-50 with movie theater owners. (Disney tends to get a more favorable split due to its box office dominance.) It gets an even larger chunk of change from digital transactions. However, NATO highlights, the studio doesn’t get to keep all of the money from online rentals. Approximately 15% of revenue goes to the various platforms, like Roku and Apple TV, through which consumers can access Disney Plus. Per NATO, early analysis of the film also failed to consider that its release on Disney Plus cuts into downstream revenues.

“It ignores that Premier Access revenue is not new-found money, but was pulled forward from a more traditional PVOD window, which is no longer an option,” the statement reads. “Combined with the lost theatrical revenue and forgone traditional PVOD revenue, the answer to these questions will show that simultaneous release costs Disney money in revenue per viewer over the life of the film.”

NATO adds, “Piracy no doubt further affected Black Widow’s performance, and will affect its future performance in international markets where it has yet to open.” According to the website TorrentFreak, “Black Widow” was the most pirated movie of the week. All the while, Disney Plus subscribers have the ability to share their password with other households, potentially limiting the number of individual transactions. NATO says Disney isn’t alone in these particular threats. It was also the case for other day-and-date releases, such as “Godzilla vs. Kong” and “Mortal Kombat,” two Warner Bros. titles that premiered on HBO Max. “How much money did everyone lose to simultaneous release piracy?” NATO asks. It’s one of many pressing inquiries that may remain unanswered.

“The many questions raised by Disney’s limited release of streaming data opening weekend are being rapidly answered by ‘Black Widow’s’ disappointing and anomalous performance,” NATO said. “The most important answer is that simultaneous release is a pandemic-era artifact that should be left to history with the pandemic itself.”

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