Data, Analytics, Marketing, Industry
February 19, 2021
Data and entertainment are two words that audiences do not normally group together, but data is awesome, and data is everywhere! Data is behind all major studio decisions in making and releasing the blockbusters of today, from date of release to form of release to celebrities involved and more. However, COVID-19 has affected these decisions as it has affected the decisions of other nationwide and global industries. After perfecting the release strategy of the biggest blockbusters, can studios figure out a way to navigate the “new normal,” and can we get data to explain their decisions?
Thanks to the Motion Picture Association, we have access to the pre-COVID-19 audience breakdown, showing an overall growing (though less frequently attending) moviegoing base along with an exponentially rising trend towards the digital market in just 5 years. With this new billion-dollar market in play and new digital leaders like Netflix, major studios like Disney and Warner Media want to enter this new age in tandem with their theatrical releases to get a piece of the digital market pie. The restrictions on theaters and safety concerns of many audience members have decimated the theatrical market, so the digital market has suddenly become a possible new haven for film and more specifically blockbusters.
Amid the restrictions, studios have tried different release strategies to try to recoup some of the costs of production. These strategies include:
Releasing theatrically alone, especially for blockbusters, has seen overall disappointing results, returning relatively consistent low numbers nationally every week. This aligns with our own survey numbers (taken back in September), which reveal that 88% of those interviewed had not gone to a movie theater since the restrictions began in March 2020.
Seeing these numbers, it makes sense to turn towards the digital market, but choosing between PVOD and SVOD becomes the next decision to make. Since it is already part of the theatrical release strategy, switching completely to PVOD is the logical next step. But audiences are not quite ready for this total switch despite initial flashy headlines from earlier releases like Trolls World Tour. Only 15% of those surveyed had even made a PVOD purchase between March and September, and a majority (53%) were not even willing to pay more than $10 for a PVOD purchase, notably less than the normal $25-$30 prices for big budget releases. This type of data could explain the far fewer announcements of direct PVOD releases compared to the beginning of the pandemic, with Disney’s Raya and the Last Dragon remaining the next, and currently only, premium big budget release.
Following the digital path, further insight shows a growing preference towards streaming services and SVOD, with a plurality (about 40-43%) both using and wanting more big budget movies released exclusively on streaming services. Although this strategy does not immediately recoup the large budgets of the movies, building up the studio’s streaming platform becomes a worthy trade, especially with an unclear return date for profitable theatrical releases. With significant audience support and new opportunities to build up streaming services, this information explains recent trends from Warner Media and Disney of releasing significant titles directly to HBOMax and Disney+ respectively.
Other than the digital release strategies, the remaining strategies also seem like relatively popular choices for studios that have some polled support. Universal’s new shortened release strategy, where a theatrical release window is shortened to 17 days before being released digitally in the PVOD market, closely resembles the previous film release strategy and has seen some success, especially for lower budget films and some struggling theaters. Delaying theatrical releases, while not showing direct results yet, is also a popular strategy as studios wait for the larger gross from the returned audience and pre-COVID-19 release procedure. This allows them to collect from both the theatrical release and subsequent digital releases. With about 70% of those surveyed confidently saying that they will return to theaters at some point, waiting the pandemic out also remains a viable solution for certain films.
With restrictions on theaters still ongoing, especially in New York and California, and the market ever-changing (the survey was conducted in September, before the HBOMax release strategy announcement), we cannot fully predict where the market will go. But with some market research and some research of our own, we can find some explanations on why studios made the choices they have during these unique times.