Should Streaming Embrace the Theatrical?

In the words of Steve Weiner, the man who first gave me a chance within this wonderful industry; “Bobbie this isn’t ‘Show Friends’ it’s ‘Show Business’”. Corny, undoubtedly, but nonetheless accurate. It’s something that stuck with me over the last 15 years as I’ve witnessed changes in the film business.

Now let me preface the next bit with the usual disclaimers; these are my views – not the business I work for – and more importantly they are not aimed at a specific company. But also remember I am biased. I love the theatrical business and hold it dear to my heart.

With that said, let’s talk about streaming. The big streaming giants understand the power and value of movies. They are moments in time which bring us together and can define periods. We remember certain films by the collective experiences which brought us to them. By the people we saw them with and the conversations we still have about them to this day. Not two weeks ago I had a long debate with someone about Inception – did the spinning top stop spinning at the end? That film is twelve years old. And it’s not unique.

Given their ability to create such moments it is no surprise streamers attach such significance to these films in terms of gaining and keeping an audience. But should they? Streaming is about customer acquisition and retention. There are a few ways to do this – big fancy marketing campaigns are one – but a more powerful and sustainable approach is content. You can buy content, and during the last two year we have seen a great number of films, which would have previously received a theatrical release, go to streaming platforms. At the time, you could argue this made a lot of sense for the studio financially. They have invested a large amount of money making the content and are being offered a no risk return on that investment. Or they can take the chance on a theatrical release, spend on marketing and pay terms to exhibitors. It may pay off. It may not. Given the uncertain nature of cinemas staying open on a global basis, you can certainly see why some distributors on some titles took that option. Personally, I believe this will happen less and less – especially on larger films – as audiences have returned into cinemas with their big seats, big screens, big sound, 3D, 4D, laser projection and so on – but that’s not what I’m here to talk about.

I’m here to talk to you about the value of a film as a piece of content. Actually as an asset. You see the other option is for streamers to make films themselves. After all, they can buy a script, hire a director and all the other bits that making a movie requires, in the same way a studio can. Studios are still better at it – although some studios are also streamers, and there is little or no difference in that case. So ultimately you may have a piece of content that is pretty much exactly the same as another in terms of quality, but as a streamer you place it on your platform – forgoing an exclusive theatrical release.

Before we go on – another couple of caveats; my opinion on the length of any theatrical window is irrelevant to this conversation and is for another time over a beer (you’re buying), and yes, I am also aware some streaming titles receive limited distribution, but I’m referring to a traditional, all cinemas release.

That all makes sense, I hear you type, and yes it does. On the face of it, if you invest millions of dollars in the production of a huge budget movie starring the latest and greatest Hollywood has to offer, why wouldn’t you put it on the platform you own first? My response is you’re not getting true value from your asset. Not financial, but in the mind of the consumer. There is sooooooooo (enough ‘o’s?) much content available on streaming platforms you simply cannot hope to consume it all. Even watching the top ten lists on the various services would be akin to a full-time job. And so we pick and choose. But every now and again something will pop up on the homepage – a new movie made by the streamer perhaps, and you think, that’s interesting I’ll give that a go. And maybe you do. Maybe you enjoy it. Maybe for the next few days people are talking about it. But how often does that happen? How many streaming only films move the needle? For TV shows, sure – it happens all the time, but for movies it’s rare – especially when they are made by the streamer.

Why is this? Like it or not, a theatrical release creates value in the mind of the consumer. Maybe it is related to the financial. If I wanted to watch this film last week, month or year, it would have cost me and my family $50, but today it is ‘free’ (yes, I know it’s not free, but I’m not paying extra for it on top of my monthly subs). It has value. Economically this may be referred to as utility. This film has a utility of $50. I only pay $10 per month for my subscription, so that makes a lot of sense to the consumer. But it’s not just that. Watching a movie in the theatre creates a must-see event, as I stated at the start. People are talking about it. It’s everywhere you look – on TV, on billboards, newspapers and social media are all abuzz with people endlessly debating the themes and (God forbid) spoling the ending. And then it arrives on streaming. Wow. I have to watch it now. Everyone was talking about this film, and I would have had to pay for it. Now I don’t. That is value. I am not cancelling my subscription to this streamer – look at the utility they give me for my money.

That same film hits one of my platforms without the theatrical release and… great. I mean it may be well reviewed, it may even win awards, but it’s just another square box on a menu screen battling for attention alongside the latest show about an obscure way to get two people to date each other, which my wife simply must watch, and a documentary about serial killers. It’s white noise on a sea of content.

You may very well argue that there are some streaming films which have broken through – yes, I’m sure you can find examples. And a theatrical release does not guarantee success - it never has. Both points are equally valid. But look at some of the films which have gone to streaming platforms and done well. You know what a lot of them have in common? They built on the heritage and legacy of brands established and created by movies released in the cinema. Think of all those brand partnerships and spinoffs that were built on the back of theatrical franchises. Would we be in the same position with those brands today if they had debuted on streaming. I don’t know, but I doubt it.

To truly be valued by the public – and for streamers to really get the most out of a movie – they need a theatrical release with all the bells, whistles and brand partnerships the incredible marketing departments at the studios bring. Movies are not a commodity, or a way to fill two hours of time. Movies are wonderful. They are moments in our lives, but underneath it all they are ‘Show Business’. Capital B. And maybe what’s best for business long term is for streamers build in some theatrical exclusivity as part of their own marketing and release strategies. Maybe they can build their own brands with cinema at its core. Maybe.