Last month we highlighted some of the dynamic ways our clients can utilize Cinelytic’s new Streaming Consumption Score. This groundbreaking tool allows users to forecast and monitor digital content consumption on a per-title basis across global platforms and countries.

To offer some more insights regarding this tool, we decided to focus this month’s article on how the relationships between streaming views, box office performance and budget have shifted across several film genres, along with an analysis into the growing industry claim of “Superhero Fatigue”.

Are People Tired of Superheroes?

In recent years, the film industry has grappled with a growing sense of weariness surrounding the Superhero genre. After a surge in these types of movies and franchises that dominated the box office and home viewing platforms for years, audiences and critics alike have begun to express exhaustion with the formulaic tropes, repetitive narratives and overuse of CGI that often accompany these films. The volume of Superhero content has led to concerns about oversaturation and a lack of originality, prompting discussions about the need for innovation and diversification.

In order to test the validity of this theory, we analyzed the 28 live-action and high-profile Superhero films that released both theatrically and on streaming between 2019 and 2023:

As the graphic above illustrates, both the average streaming score and domestic box office (DBO) for these titles have exhibited a consistent downtrend, outside of an understandable rebound following the 2020 COVID closures. In fact, between 2019 and 2023, the average streaming score and DBO respectively dropped 14% and 61%. Furthermore, it’s important to note that while interest in these films may have dropped, the same can’t be said regarding studio expenditures to get them made. This is evidenced by the chart below, which displays an increase in average budgets by around 15% since 2019 to US$212m:

This overall downtrend provides some support for the argument stating that audiences may be growing tired of comic book sourced narratives and increasingly desire other types of storytelling.  This raises the important question: What type of content can make up for the revenues lost from Superhero releases?

To answer this question, we took a deeper dive into both the box office and streaming performance of Original Action, large Non-Franchise and Drama titles over the last five years.

Original Action:

The 50 non-Superhero Action titles that we pulled data for showcased slightly more inconsistent trends in both streaming score and DBO. Some of the most high-profile examples of these movies include titles representing the Star Wars, Fast & Furious, John Wick, Bad Boys, James Bond, Top Gun, Avatar, Indiana Jones and Mission: Impossible franchises.

While both fluctuated, the average streaming score and DBO since 2019 can be considered flat as both decreased by only 6% and 2% respectively, indicating stable demand in comparison to Superhero films released in the same time period. However, the budgets of these films since 2019 have considerably increased by 28% to US$195m.

Large Non-Franchise:

We used our platform to look at all the non-Superhero titles that generated at least US$50m in DBO and were not part of any established film franchises. This allows us to gauge how audiences reacted to content across numerous genres and a wide range of consumer segments. In this case, the 77 analyzed films presented opposing trends for streaming and box office performance.

Despite considerable boosts during the lockdowns in 2020 and 2021 when audiences had huge appetites for Non-Franchise films on digital platforms, the average streaming score performed similarly to Action across all five years and can also be considered flat with a small decrease of 6%.

The data points out that the strong demand for that content type shifted to the theatrical setting and resulted in a 65% increase in average DBO during the same five-year span. That should come as good news for the studios involved in these projects since the average budgets for these same movies increased by 73% since 2019. In particular, 2023 was distinctly impressive at the box office, in large part due to historically successful theatrical runs for films like BARBIE, THE SUPER MARIO BROS. MOVIE and OPPENHEIMER.

Drama:

Despite interest in Superhero titles consistently decreasing, the opposite can be said for the least expensive genre in this study: Drama.

Popular releases prior to the pandemic like ONCE UPON A TIME…IN HOLLYWOOD, FORD V FERRARI, THE UPSIDE and LITTLE WOMEN helped make 2019 the strongest year we analyzed for Drama. The data points out that Drama was not in the audiences favor during the pandemic, which resulted in a sharp drop in 2020 and 2021 on a per film average.

Since then, the genre has been marked by steady improvement as audiences have been looking for more than just escapism and instead crave interesting storylines. The average streaming score and DBO respectively and impressively increased by 27% and a whopping 682% between 2020 and 2023, which indicates strong upcoming demand in 2024. It remains to be seen if this year’s upcoming slate will be able to support that demand.

Changing Appetites

It should come as little surprise that most of this data shows box office and streaming performance decreasing since 2019 for the films we incorporated in these analyses, as the slate of films released in that year was extremely strong. As it relates to Superhero movies, they seem to have taken the biggest hit with no signs of steady improvement. Meanwhile, content that was unrelated to comic book universes fared noticeably better. Our data clearly indicates that there is a very healthy demand for larger Non-Franchise films across theatrical and streaming consumption. Furthermore, the resurgence in a demand for drama content is clearly moving in the same direction.

The good news is that all this may signal that consumers are hungry for quality content. Perhaps the elevated storytelling in the episodic TV realm has raised audience expectations for films as well. To accommodate this, the industry will need to find and shine a light on creative voices who can produce content sourced from original ideas that can potentially lead to future franchises or prioritize the re-imagining of popular IP. This year’s domestic box office success of a variety of films like DUNE: PART TWO, GODZILLA X KONG: THE NEW EMPIRE and even A24’s dystopian thriller CIVIL WAR seem to all be varying examples of these types of efforts.

Last month Cinelytic unveiled a new and exclusive “Streaming Consumption Score“, which offers our clientele the capability to forecast and monitor digital content consumption on a per-title basis across global platforms and countries.

We also recently shared the results from an exercise that showcased an interesting use case for this groundbreaking tool. Organizing data pulled from six selected genres and focusing on four recent and high-profile titles within each of them, we were able to demonstrate a clear correlation between streaming performance and critical feedback, as shown in the graphic below:

Upon review, it becomes apparent that the average streaming scores of the selected genres and titles exhibit a consistent and inverse relationship with overall critical acclaim as reported by Rotten Tomatoes (RT).

One common explanation for this phenomenon lies in the dynamics of audience preferences and behavior. Generally, films that receive high praise from critics tend to be more artistically or intellectually demanding and tackle sensitive or niche subjects. While such films often garner critical acclaim for their artistic merit, they may not necessarily appeal to the broader mainstream audience.

It’s important to note that while compelling, this conclusion is neither universal nor unprecedented, and the exercise only compared two data points and 24 total films. Fortunately, the Cinelytic platform is a rich source of constantly updated data, the newest addition of which are our new streaming scores. As such, we decided to focus this month’s insights on a deeper dive into six celebrated and recent 2023 titles of comparable budgets but differing genres.

Case Study: Comedy vs Drama

For this analysis, we focused on six titles (three comedies and three dramas) that released last year: PAST LIVES, THE HOLDOVERS, POOR THINGS, THE ZONE OF INTEREST, THE IRON CLAW and ANYONE BUT YOU:

While the three comedies came courtesy of three different distributors, all three dramas can be attributed to independent label A24. The films ranged in budget between US$12m and US$35m and had a wide range of theatrical release strategies with screen counts between 598 and 3,055.

Apart from ANYONE BUT YOU, the remaining titles all enjoyed overwhelmingly positive feedback from both audiences and critics, as per data provided by RT. Four of them (THE IRON CLAW, THE ZONE OF INTEREST, PAST LIVES and THE HOLDOVERS) performed very similarly in regard to both total box office revenues and their global streaming scores, averaging US$41m in the former and 57 in the latter, a figure that falls in line with the average exhibited by the acclaimed drama genre in the previously presented bar chart. Being a period piece with dramatic elements, it stands to reason that THE HOLDOVERS is a comedy title that performed more akin to a drama.

As for the two more expensive and star-driven movies in this bunch, POOR THINGS and ANYONE BUT YOU are comedies that enjoyed considerably more success, particularly in their theatrical runs. These two releases averaged US$165m in total box office and a slightly more impressive streaming score of 66.

While this analysis is without question enticing, it should be noted that the streaming scores presented thus far represent a global figure for a film’s performance across all territories. While that may be an impressive tool in and of itself, we at Cinelytic took it one step further.

Our proprietary streaming score’s true innovation that sets it apart is its normalization process, meticulously tailored to reflect the unique viewing behaviors and preferences within each individual market worldwide. Utilizing this tool, we are able to compare and contrast how a film performed domestically and internationally at the box office with its popularity on digital platforms in any country we choose to analyze.

Domestic vs International

As an additional exercise, we looked into the top five major film markets around the world where all six of these selected titles enjoyed both theatrical and streaming releases, and the results are quite interesting:

The international box office haul for POOR THINGS more than doubled its domestic total, and the table above reflects a similar phenomenon where its top three streaming territories represented foreign countries led by Italy. Despite an almost exclusively American lead cast, none of this should come as much of a surprise given the film’s renowned foreign director and international settings.

THE ZONE OF INTEREST and PAST LIVES performed in a similar manner as it pertains to the bulk of their box office revenue and top streaming territories coming from audiences overseas. This stands to reason given that both films largely utilize foreign languages and plots that are very specific to the countries that their stories focus on.

While there isn’t as much of a discrepancy between its domestic and slightly higher international box office revenues in the case of ANYONE BUT YOU, the Sydney Sweeney and Glen Powell led romantic comedy did also enjoy its highest streaming score outside of the US and in the same country where the movie takes place: Australia.

The final two films represent American made period films that take place on American soil: THE IRON CLAW and THE HOLDOVERS. The latter, which is Alexander Payne’s latest Oscar winning partnership with Paul Giamatti, doesn’t present us with many surprises as it almost evenly split its global box office intake between domestic and international theaters and claimed the domestic market as its best streaming customer.

However, THE IRON CLAW, Sean Durkin’s fact-based biopic starring Zac Efron, interestingly represents the second American film in this comp set that claimed Australia as the territory that yielded its highest streaming score, despite making over four times more box office revenue domestically than it did internationally.

There’s More Where That Came From

All to say, there’s a lot you can do with per-territory streaming scores. Even with all this data, we all know there is no guarantee of success for a film at neither the box office nor on digital streaming platforms. Regardless of what test screenings, positive reviews or good word of mouth may signal, studios and streamers will frequently have the pleasure of experiencing surprises, both good and bad.

Unlike traditional box office metrics for theatrical releases, streaming platforms tend to keep detailed viewership data closely guarded. This lack of transparency makes it challenging for filmmakers and industry analysts to accurately assess the digital viewing performance of individual movies, hindering their ability to use them as direct comps when predicting the success of their own projects once they make their way to the “home viewing” world. While the secrecy surrounding streaming viewership data presents its challenges, creative adaptation and strategic analysis can help mitigate these and provide valuable insights into the performance of movies that are available for digital viewing. By leveraging our proprietary streaming score, our clients can make more informed decisions and optimize their strategies for success in the rapidly evolving landscape of streaming entertainment.

This time last year, our February Insights dove into our predictive box office platform’s late 2022 forecast for the full slate of movies 2023 was about to offer. As highlighted in the graphic below, the most recent tally of last year’s domestic box office (DBO) performance points to our forecast being over 96% accurate:

Being motivated to repeat that accuracy for this year, we at Cinelytic once again decided to use a bottom-up approach to get a head start on analyzing what 2024 has in store for the domestic theatrical industry. Just a few months ago, we ran projections on all the major releases announced for the upcoming year. These forecasts were then used to produce an expanded projection of the annual and monthly DBO. Cinelytic focused on 55 major titles planned for wide release with a breakdown of the number of releases from each distributor as follows:

2024 Forecasts

While 2023’s US$8.9b rebound came as welcome news to distributors and exhibitors alike in the post-COVID-era, most industry insiders see 2024 as a step back in the wrong direction, with many signals of an annual US$1.0b drop that may come courtesy of a less attractive upcoming film slate.

In terms of our prediction, Cinelytic forecasts just over US$8.17b in 2024 DBO revenue, representing an 8% drop from 2023’s bounce back year, which in turn showcased a 21% increase from 2022. This figure was further broken down into monthly forecasts.

As a testament to our ongoing accuracy and to kick-off 2024, see the below graphic to compare actual performance against our projections in regard to the first three major titles that released theatrically last month:

Bottom-Up 2024 Per Title Forecasts:

The Cinelytic platform utilized 19 key project attributes to run predictive analyses for these titles based on our proprietary algorithms and machine learning. We also took into account late 2023 major releases that are still generating theatrical revenue early in 2024. In this case, that meant including a calculated portion of the projected early 2024 DBO revenue from some major year-end releases like THE MARVELS, THE HUNGER GAMES: THE BALLAD OF SONGBIRDS AND SNAKES, TROLLS BAND TOGETHER, NAPOLEON, WONKA, ANYONE BUT YOU, MIGRATION and AQUAMAN AND THE LOST KINGDOM, amongst others.

What Does Each Forecast Look Like?

Highlighting Warner Bros. Pictures’ long awaited and delayed sequel to their acclaimed Sci-Fi adaption, we can use the upcoming March release DUNE: PART TWO to provide an in-depth example of just one of these projections. Utilizing the reported budget of US$120.0m, global P&A costs totaling an additional US$160.0m, and attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$198.2m in the base case median scenario, representing an 83% increase from its predecessor’s day-and-date release from 2021. In addition, the Cinelytic platform is capable of predicting Home Video and TV revenue ultimately based on real data:

Based on the anticipated global net revenues totaling US$365.0m for Warner Brothers (including domestic/international box office, home entertainment, TV net of distribution fees and expenses), the film is projected to result in a substantial return (10-year ultimate) for Legendary Pictures, with a projected ROI of 116.2% and assuming a 50% investor share for the production company.

Methodology

While the 55 films we analyzed in detail may represent the bulk of the DBO set to be earned in 2024, there are of course far more movies planned for release. In order to expand this analysis and conclude upon the full domestic forecast, we analyzed actual performance in 2018, 2019, 2022 and 2023 (ignoring the pandemic period) and looked to see how the Top 55 titles performed against total yearly DBO for each of these years. In 2018, 2019, 2022 and 2023, the Top 55 performing titles respectively accounted for 74%, 77%, 91% and 84% of the total DBO, the median of which equated to 81%. Utilizing this median value, Cinelytic’s DBO projection for 2024 calculates to the aforementioned US$8.17b.

There’s More Where That Came From

As previously mentioned, Cinelytic has in depth projections for not only the top major studio releases for the upcoming year, but also titles being made available theatrically by several mini-major/independent distributors.  Please feel free to reach out if you’d like more detailed information on what our projections say for each major title awaiting release throughout the next 11 months.

2023 was another bounce back year for the theatrical industry, representing a 21% increase in domestic box office revenue (DBO) from 2022 and a 99% increase from 2021. The US$8.9b tally came as welcome news to both studios and exhibitors, and as shown in the graphic below, it’s a figure that we at Cinelytic got pretty close to when we forecasted 2023’s entire domestic slate back in the Fall of 2022:

As for 2024, the Sundance Film Festival signifies the first major film market of the year for numerous upcoming theatrical releases, and with its commencement this week, we decided to take a deep dive into the streaming performance of some competition titles from Sundance 2023 to see how their festival presence/participation and release strategies translated.

In addition, we forecasted the box office performance of several titles premiering in Park City this week, including FREAKY TALES, the first film from directors Anna Boden and Ryan Fleck since their megahit CAPTAIN MARVEL in 2019.

Theatrical releases and subsequent OTT performance                                                                            

Since streaming (VOD/SVOD) has become one of the main revenue streams for Sundance titles over the last few years, we analyzed consumption to see how audiences engaged with some 2023 festival titles.  To do so, we used our proprietary OTT viewership proxy system that tracks 125m digital content consumption transactions per day across the world to agglomerate to an annual tally of 35bn illustration consumer IP/content preferences on a global basis. We took three of the titles with the most buzz that were in competition in 2023 and pulled their 1st seven days of release on OTT to showcase a directly comparable metric:

In reviewing the data, we see that THEATER CAMP and A THOUSAND AND ONE had stronger OTT debuts in comparison to SHORTCOMINGS and both managed to average virtually the same overall and modest market share capture (1.5 – 1.6%) across their first week of availability. However, their paths differed slightly as THEATER CAMP demonstrated a stronger Day 1 followed by a noticeable drop-off, while A THOUSAND AND ONE conversely saw its peak on Day 2 and then experienced a similar drop-off. SHORTCOMINGS managed a significantly lower first week average of just 0.6% and a more consistent trend line.

A THOUSAND AND ONE won the Grand Jury Prize at the festival, was acquired by Focus Features and was named one of the Top 10 independent films of 2023 by the National Board of Review. This all led to a theatrical release on 926 screens that resulted in US$3.5m in worldwide box office revenue. Joining it in praise was THEATER CAMP, which received two standing ovations from the audience at its premiere and shortly after had its distribution rights acquired by Searchlight Pictures for US$8m million. Despite a less expansive theatrical release on 555 screens, it actually managed to pull in a higher box office total (US$4.6m). While it may not have received the same level of attention as the other two titles in this comp set, SHORTCOMINGS was acquired by Sony Pictures Classics and granted a comparable 404 screens for theatrical viewing, albeit it was only able to earn just under US$700,000.

Now on to Sundance 2024.

Boden and Fleck – Back to basics

After starting off with a series of highly regarded indie comedies and dramas between 2006 and 2015, filmmaking duo Anna Boden and Ryan Fleck were asked to join the Marvel Cinematic Universe, resulting in one of the highest grossing films of all time in 2019’s CAPTAIN MARVEL. No strangers to the Sundance Film Festival, the pair are now returning to their grounded dramatic roots with the premiere of their highly anticipated period anthology film FREAKY TALES.

We ran this title through our predictive tool, which takes into consideration 19 material input attributes to determine a full-performance waterfall, P&L and ROI.  Estimating a budget of US$10m, we also took into account a proposed theatrical release strategy of 800 screens with Pedro Pascal in the lead. The Cinelytic platform predicts a DBO of just over US$8.0m and domestic gross revenues (BO, HV, TV) that total approximately US$14.8m.  The mix of release strategy and revenues by media and associated costs would net a negative ROI for this project.

While our signature ROI forecasting is more useful for financiers, producers and all those providing equity for a project, our sales estimates tool allows both buyers and sellers at festivals like Sundance to view the per territory value estimations of a title inclusive of all media rights (box office, home video, TV and ancillary). This tool may be more interesting to those in a market setting who are attempting to calculate the correct figure each territory’s rights should be bought or sold for. As shown in the graphic below, we estimate domestic and international values for this project at US$3.3m and US$2.6m respectively, yielding a global valuation of US$5.9m:

In looking at a film like FREAKY TALES along with the competition titles we analyzed from last year’s festival, we expect that a potential domestic theatrical release would help propel its after life on OTT, thereby helping its bottom line and further pushing its domestic and global values.

We additionally ran analyses for other upcoming market highlight titles including PRESENCE, THE AMERICAN SOCIETY OF MAGICAL NEGROES, A DIFFERENT MAN, WINNER, MY OLD ASS, ROB PEACE, SASQUATCH SUNSET and others both premiering and in competition.

Conclusion

Buyers, sellers, and enthusiasts are eagerly anticipating the second in-person Sundance Film Festival in the post-COVID era. With numerous premieres and competitive entries spanning ten days, the evolving festival and market dynamics will require thoughtful decisions on whether a theatrical release is justified. If not, alternative strategies must be explored to generate the essential awareness for a successful debut on OTT platforms.

The top streamed films and TV shows of 2023 – which studios and networks featured the most successful film and TV content?

After a nice boost from WONKA in the final two weeks of 2023, the domestic box office (DBO) for last year currently sits at US$8.91b as of today, a figure that is estimated to grow to slightly above US$9.0b once all final tickets have been tallied. That total will mark the best DBO performance since 2019’s US$11.4b. While crossing the US$11.0b DBO threshold was an industry standard between 2015 and 2019, surpassing US$9.0b should come as a relief to studios and exhibitors after a prior 3-year pandemic era average of US$4.7b.

That being said, people were still enjoying plenty of content from the comfort of their own homes. Total domestic subscription revenues are estimated to reach US$36b in 2023, which is nearly four times the box office and a strong indication of consumer behavior.

While Netflix is dominating the distribution within the streaming industry based on the number of subscribers and minutes watched, our proprietary digital consumption data highlights the demand for original content without platform bias.

We track 125m digital content consumption transactions per day across the world to agglomerate to an annual tally of 35bn illustration consumer IP/content preferences on a global basis.

As we begin our journey into 2024, we have decided to once again look into the strongest titles to see how 2023 releases performed. For this exercise, we ranked the Top 10 performing movie and TV releases, analyzing total views for films and the “strongest week” of consumption for TV shows throughout last year:

As the above graphic illustrates, known IP, franchises and sequels made up most of the film titles amongst the Top 10, with Warner Bros. Pictures’ megahit BARBIE, which was also the best-performing film at the box office, being the only exception. Noticeably absent from the Top 10 is Universal Pictures’ historic success and original story OPPENHEIMER, which impressively came in at #12 in total views despite a far later digital release just 40 days prior to the end of the year. On the TV side, Disney Plus and Paramount Plus accounted for six of the 10 shows with the strongest weeks of performance in 2023, while Max’s long-awaited video game adaptation THE LAST OF US was able to nab the top spot.

In order to take a more expansive look into the success of film distributors in 2023 in regard to digital performance, the below graphic highlights the Top 10 performing companies based on data related to the Top 100 OTT film releases in the United States:

In a manner very similar to the same data pulled from 2022, Universal Pictures edged out Walt Disney Studios to be the top studio for digital releases via a balanced mix of original ideas (OPPENHEIMER, M3GAN, COCAINE BEAR) and known IP (THE SUPER MARIO BROS. MOVIE, FAST X, PUSS IN BOOTS: THE LAST WISH). All films generated 21% market share for Universal amongst the Top 10 performing studios. Narrowly missing the Top 10 with a market share capture of just 1.4% was Apple Studios.

The additional graphic below provides similar insight into the top-performing original content by TV networks in 2023, once again focusing on the strongest week of performance of shows as opposed to total views:

As previously alluded to in our August Insights, Paramount+ enjoyed substantial digital success and made quite the statement last year after a quiet 2022. This was in large part the result of a major push into the STAR TREK universe and increases in both budgets and popularity for existing and new series created by writer Taylor Sheridan (YELLOWSTONE, 1923, MAYOR OF KINGSTOWN, TULSA KING, SPECIAL OPS: LIONESS, LAWMEN: BASS REEVES), who reportedly now commands US$500m in annual content spending for his shows alone. Despite their impressive year, technically speaking Paramount did not capture the most market share, as media giant Disney is represented by three separate networks that made it into the Top 10 (Disney+, Hulu, FX) and collectively totaled roughly 31%.

Moving into 2024…

Based on our analysis, three companies found themselves in the Top 5 when it comes to original digital content performance for both film and TV: Disney, Paramount and Warner Bros. Discovery. Despite NBCUniversal’s success in home viewing of their films, neither NBC nor its streaming partner Peacock were able to crack the Top 10 in TV, collectively coming in at #11 amongst the networks with five original programs making it into the Top 100 shows with the strongest weeks.

Netflix is dominating distribution in the streaming market based on number of subscribers and hours watched on the platform, but its original content does not yet reach the popularity of studio films and traditional TV shows. Using its superior distribution position, Netflix won back licensing deals with studios, further strengthening its lead in digital content distribution.

With what has been widely described as a “less than stellar” 2024 movie slate coming to theaters over the next 12 months, domestic box office performance is potentially going to take a step backward while streaming consumption could further grow to new heights.

It will be interesting to see if and how the Top 10 lists for both movies and TV shift as viewers consume upcoming content. Will Apple continue its partnerships with other major studios for higher-profile films to boost digital viewership and move up the list? Will NBCUniversal find more success in the TV world? These are questions that only time will answer.

Second Half of 2023: Box Office Windowing and Success on Streaming

While it should come as no surprise to anyone in these early stages of the post-pandemic era, it’s been quite an eventful year at the box office. Several “surefire” blockbusters tied to historic franchises or well-known IP with high profile talent attached severely underperformed, while other titles flying slightly below anyone’s radar took theaters by storm.

Last February, we at Cinelytic published a summary of the results from our domestic box office predictions for the full 2023 slate, which we ran in the Fall of 2022. Our efficient early forecasting model allows us to accurately estimate not only domestic and global box office performance, but also home video and TV revenues, offering a truly unique tool for the film industry.

The predictive platform estimated a total domestic gross of US$8.57b. Through the end of last month, as highlighted in the graphic below, we’ve been impressively spot on as it relates to overall domestic box office projections with 95% accuracy, a figure that is tracking to further improve as December comes to a close:

As previously mentioned, there have been some surprising films that contributed to the majority of this US$8.2b through November, along with differing degrees of follow-up success on streaming through the use of opposing theatrical windowing strategies.

Last July, we chose to evaluate and compare the streaming performance of the major theatrical releases from the first half of 2023 using our proprietary OTT demand data. This data captures 125m daily P2P transactions globally for a yearly total of 35b transactions. This month, we decided to do the same for the second half of 2023.

While studios have been testing numerous shortened windowing methods both during and since the pandemic, both historic and more recent figures inform us that films that perform well at the box office with longer theatrical windows usually also enjoy impressive numbers in regard to home viewing.

To once again test that theory and evaluate the streaming performance of some of the most high-profile theatrical releases of the last six months, we used our proprietary OTT demand data to compare the first seven days of streaming performance of eight major titles that have completed their initial runs in both theaters and home viewing:

Through the first six months of the year, six of the eight digital releases we analyzed in July represented six of the Top 10 performing box office releases. Contrarily, the second half of the year paints a slightly different picture, as only two films (BARBIE and OPPENHEIMER) from the eight analyzed represent Top 10 performing box office titles, with the remaining six being spread out across the Top 50.

The graph above allows us to view three distinct groups. The three titles with the most successful streaming debuts were INDIANA JONES AND THE DIAL OF DESTINY, OPPENHEIMER and KILLERS OF THE FLOWER MOON. These films respectively ended up averaging 11.8%, 11.5% and 10.0% of market share capture through their first week of viewing. The next batch of films includes THE EQUALIZER 3, MISSION: IMPOSSIBLE – DEAD RECKONING PART I, MEG 2: THE TRENCH and BARBIE. These titles respectively averaged 10.7%, 9.9%, 9.7% and 9.6%. It’s important to note that while THE EQUALIZER 3 did not join the Top 3 as it pertains to strongest Day 1 performance, it did perform consistently and finished strong enough to make it the third overall best performing film amongst these eight through its first week. The final title, which separated itself from the pack at the bottom, was GRAN TURISMO with an average of 7.2%.

One interesting note is the comparison of differing release strategies and subsequent streaming performance for the two most conjoined films of 2023 that were unmatched in terms of the marketing behind them: OPPENHEIMER and BARBIE.

At roughly four months, OPPENHEIMER’s theatrical window was the longest amongst this set, which was expected given the man behind the camera. When Christopher Nolan ended his 19-year relationship with Warner Bros. to partner with Universal Studios, one of his key demands of the new studio was to grant him an unusually long and exclusive theatrical release. Despite this lengthy window and the resulting historic box office success (US$954m globally), the film also performed very well in its first week of availability for home viewing.

BARBIE on the other hand, while able to enjoy even more box office success (US$1.4b globally) in a far shorter theatrical window (53 days), was not able to match the aforementioned WWII drama’s success on streaming. In between these two films when it comes to window length were the latest releases from two storied action heroes: Tom Cruise and Harrison Ford.

Cruise was reportedly very unhappy with Paramount’s original 45-day window plan for his latest film given the success of TOP GUN: MAVERICK, and even got lawyers involved in what turned out to be a successful attempt to achieve the previous franchise standard of 90 days. Meanwhile, for the latest installment in the INDIANA JONES franchise, Walt Disney Studios stayed true to their recent commitment to a 60-day window, a strategy they also utilized this year for ANT-MAN AND THE WASP: QUANTUMANIA, GUARDIANS OF THE GALAXY VOL.3 and THE LITTLE MERMAID.

Three of the other four films with theatrical windows between 20 and 45 days represent action-oriented stories tied to smaller-scale franchises or IP, while Martin Scorsese’s latest epic KILLERS OF THE FLOWER MOON is in the unique situation of being a partnered release with Apple that will eventually and exclusively make its way onto Apple TV+ after an initial period of more broad digital availability.

Which Window is Best?

The industry is still doing its best to navigate between theatrical and digital releases in order to find the most efficient strategy when it comes to timing. The reality is that those decisions will need to be made on a title-by-title basis. That being said, as it pertains to these eight films released in the second half of this year, the four titles that showcased the best average market share capture through their first week of availability had an average theatrical window of 65 days, while the bottom four had an average theatrical window of 49 days. As such, the mantra likely still holds that windowing does matter and films with material separation (minimum 45 days) tend to see improved performance in the home viewing window.

As we’ve alluded to throughout this year, we’ve been reviewing the box office projections that Cinelytic published back in September of 2022 for the film industry’s entire 2023 theatrical slate. The graphic below showcases updated figures proving that we have maintained our accuracy in relation to our domestic box office projections, currently tracking at around 92% through the month of October:

It’s no secret that forecasting film revenue has likely never been more difficult. Several tentpole releases from major studios this year have vastly underperformed industry estimates, whether it be Walt Disney Studios’ INDIANA JONES AND THE DIAL OF DESTINY or THE MARVELS, Warner Bros. Pictures’ THE FLASH, Paramount Pictures’ MISSION IMPOSSIBLE – DEAD RECKONING PART ONE or Universal Pictures’ FAST X. At the same time, some major studios had other comparably high-profile releases that either met or completely blew past expectations. Examples of the latter include BARBIE, OPPNEHEIMER, THE SUPER MARIO BROS. MOVIE and SPIDER-MAN: ACROSS THE SPIDER-VERSE.

While correctly projecting blockbuster or franchise film revenue has never necessarily been easy, it’s likely always been easier than doing so for more grounded and fact-based dramas like the aforementioned OPPENHEIMER. There are several big budget dramas that will be vying for Oscars early next year still scheduled for release through the end of 2023, however three such releases seem to be getting the most attention. Each of these films represent long-awaited historical dramas and period pieces helmed by legendary directors that feature marketable stars: KILLERS OF THE FLOWER MOON, NAPOLEON and FERRARI.

While the graphic above focuses on our predictive forecasting platform’s domestic accuracy, global revenue projections are equally impressive. Focusing on Martin Scorsese’s KILLERS OF THE FLOWER MOON, which just completed its theatrical run last week before moving to Apple TV+, it’s obvious that a global box office tally of US$145.8m is not what Paramount Pictures had hoped for given the reported US$200m budget.

As shown in the graphic below, while the Cinelytic platform predicted a slightly more fruitful global theatrical run, it still managed to be 95% accurate thus far, with the change of that number to further improve during the final days of the release:

Being just a few days removed from the release of NAPOLEON and a few weeks away from the release of FERRARI, we at Cinelytic decided to utilize our forecasting tool and take a deep dive into how these films may perform financially, highlighting Ridley Scott’s latest historical epic.

Our AI driven tool takes into consideration 19 material input attributes to determine a full-performance waterfall, P&L and ROI. We utilized the reported budget of US$200m, an additional US$120m in total P&A costs and a theatrical release strategy of 3,400 screens with Joaquin Phoenix in the lead. With these inputs, the Cinelytic platform predicts a DBO of roughly US$63.9m, domestic gross revenues (BO, HV, TV) that total roughly US$140.4m, and international gross revenues totaling US$196.0m:

Based on the anticipated global net revenues (including BO, HE, TV net of distribution fees and expenses), the film is expected to result in a significant loss and a projected ROI of –51.2%. It’s important to note however that the above projections assume traditional theatrical and home video release strategies. In reality, as per Apple’s model with its previous releases, this film will likely only be made available at home for viewers with Apple TV+ subscriptions who will be able to watch the movie as many times as they please without the typical purchase or rental fees. This makes the negative ROI easier to stomach for a company with deep pockets like Apple that is more focused on driving up their subscriber count.

To understand whether the ROI, investment, and domestic/global net revenues are in sync for a film of this scale and caliber, it is helpful to compare the same data points for the other aforementioned notable drama awaiting release. As such, we used the Cinelytic platform to also run projections for FERRARI. The table below outlines the results output:

As shown above, while both titles together showcase an average ROI of -39.4%, FERRARI is projected to result in a considerably smaller loss for its various financial backers. Despite first exploring the project back in 2000, the film represents Michael Mann’s first directorial effort since the critical and commercial disaster BLACKHAT in 2015.

The soon to be 86-year-old Ridley Scott has shown no signs of slowing down, with NAPOLEON being his third consecutive major historical drama in just a two-year span. The English cinema icon is also no stranger to global appeal, as his last three projects all feature plots and storylines in international settings. That being said, the first of these efforts (THE LAST DUEL) was an outright box office failure, and his follow-up HOUSE OF GUCCI, while more successful, still likely resulted in a loss for its investors.

Tech Giant vs Indie Distributor

It’s interesting to note that the two larger scale titles discussed in these insights represent partnerships for Apple Original Films, as the largest tech company in the world is enlisting the help of Paramount Pictures and Sony Pictures for KILLERS OF THE FLOWER MOON and NAPOLEON respectively to handle theatrical distribution. While Apple has had exclusive albeit limited theatrical runs for some of its releases in the past (THE TRAGEDY OF MACBETH, CAUSEWAY, EMANCIPATION), these two titles have been granted traditional, global and lengthy windows more in line with what their directors are accustomed to prior to streaming releases on Apple TV+.

Due to Apple’s aforementioned unique position, both of these releases have less of a need to result in a profit when it comes to theatrical runs, and more so represent “prestige projects” that will garner more credibility for the tech giant as a movie studio. The question for Apple then becomes: Does a theatrical run drive enough of a push for the Apple brand to increase Apple TV+ subscription numbers in a noticeable way?

On the other hand, FERRARI is pieced together indie production with a seemingly endless list of independent investors and producers who, unlike NAPOLEON’s backers in Cupertino, definitely need to see a profitable partnership with theatrical exhibitors. Based on our prediction, FERRARI financiers will face a loss and a less than 25% probability of an outlier performance that would achieve a break-even. The domestic release represents Neon’s largest endeavor to date, which will also be an interesting element to pay attention to. Being placed higher in the recoupment waterfall and maintaining control of P&A spend, Neon is in a more comfortable position to manage a break-even scenario. As we have no insight into the price or deal structure surrounding Neon’s rights acquisition for this film, we are not able to pinpoint the break-even probability.

Changing Strategies

There is no argument against the fact that Christopher Nolan’s OPPENHEIMER was massively successful on a record-breaking level. However, it’s also obvious that the marketing campaign behind that release was anything but traditional. In the age of digital media dominance, social media platforms and audience engagement are instrumental in promoting movies to viewers around the world in the lead-up to opening weekends. “Barbenheimer” was a cultural phenomenon that without question created unprecedented excitement around a three hour partly black and white biopic that otherwise may not have existed, at least not to the same extent.

KILLERS OF THE FLOWER MOON, NAPOLEON and FERRARI have not had the benefit of a release like BARBIE to ride a wave with. For Apple, none of that may make a difference, as their aforementioned priority is likely more related to driving subscription numbers. However, for companies like Neon, the final box office figures for these three films may go a long way in influencing not only if studios will continue allotting lengthy theatrical windows for expensive historical dramas regardless of the talent and scale involved, but also in how they choose to market them.

As we’ve highlighted in numerous past months this year, we at Cinelytic have been reviewing the home video and TV revenue projections that we published back in September of 2022 for the full 2023 slate. As shown in the graphic below, updated figures prove that we have maintained our accuracy in relation to our domestic box office (DBO) projections, currently tracking at around 94% through the month of September:

Forecasting film revenue has likely never been more difficult. Several tentpole releases from major studios this year have vastly underperformed industry estimates, whether it be Walt Disney Studios’ INDIANA JONES AND THE DIAL OF DESTINY, Warner Bros. Pictures’ THE FLASH, Paramount Pictures’ MISSION IMPOSSIBLE – DEAD RECKONING PART ONE or Universal Pictures’ FAST X. At the same time, some of the major studios had other comparably high-profile releases that either met or completely blew past expectations. Examples of the latter include BARBIE, OPPNEHEIMER, THE SUPER MARIO BROS. MOVIE and SPIDER-MAN: ACROSS THE SPIDER-VERSE.

While studios anxiously await to see how the remaining major titles of the year like KILLERS OF THE FLOWER MOON, NAPOLEON, THE MARVELS, THE HUNGER GAMES: THE BALLAD OF SONGBIRDS AND SNAKES, WONKA and AQUAMAN AND THE LOST KINGDOM will fare at the box office, there may be a niche genre with two upcoming releases that could provide more favorable financial returns: the concert film.

Concert Film History

The argument that theaters should make more of an effort to prioritize live event/concert movies isn’t new, and the idea re-entered discussions regarding industry recovery during and after the COVID-19 pandemic. Among the past attempts by film distributors to capitalize on die-hard fans of musicians, the Top 10 performing concert films as it pertains to domestic box office gross include those showcasing Justin Bieber, Michael Jackson, Miley Cyrus, One Direction, Katy Perry, Jonas Brothers, Madonna and U2. The DBO range for the Top 10 titles is between US$8.6m and US$73.0m, with JUSTIN BIEBER: NEVER SAY NEVER (2011) topping the list. With the most recent film on that list being released in 2013, it would seem as though the genre is due for another major release.

“Swifties” vs the “BeyHive”

Enter Taylor Swift and Beyonce. As it so happens, two major titles could easily find themselves amongst the Top 10 soon, with one most likely replacing Bieber at #1. In August, Swift announced that a concert film showcasing her ongoing “Eras Tour” will be released on October 13th. The film’s presales shattered records for its co-distributors and worldwide theater chains Cinemark and AMC, selling US$37m worth of tickets across both the aforementioned chains and Regal Cinemas on its first day of availability. That figure exceeds the Day 1 presales of numerous historic and high-profile films like STAR WARS: THE FORCE AWAKENS (2015) and SPIDER-MAN: NO WAY HOME (2021). If you add in presales form Canada’s Cineplex and Mexico’s Cinepolis, that figure rises to US$65m.

Soon after Swift’s announcement, Beyoncé announced that her own concert film for “The Renaissance” tour will be released on December 1^st, also with distribution from AMC.

Being just days away from the first of these releases, we at Cinelytic decided to utilize our forecasting tool to understand how these films may perform at the box office. This tool takes into consideration 19 material input attributes available at Greenlight to determine a full-performance waterfall.
This will be the first time we have used this tool for a concert film.

We utilized the reported US$20m budget of TAYLOR SWIFT: THE ERAS TOUR for both titles and differing theatrical release strategies of 4,300 screens for ERAS and 4,000 screens for RENAISSANCE, with both musicians in the lead in each respective film. With these inputs, the Cinelytic platform predicts the following domestic box office revenues:

The forecast for ERAS of US$238M represents the most probably median forecast scenario. Our predictive tool can forecast the entire range of probability-based scenarios so that the user can get a good handle on outlier scenarios (e.g. 70% / 30% confidence) and the likelihood of those becoming a reality.

In addition, our platform does forecast ancillary revenues such as Home Video and TV revenues at the consumer level (10-year ultimates). Further making the point that in addition to a strong theatrical release, ERAS is predicted to do very well on digital home video over the next years:

Several industry reports have ERAS tracking with an opening weekend range between US$100m and US$125m, with others bringing the average down closer to between US$75m and US$85m. Even at the lower range of these predictions, ERAS would still earn the biggest opening ever for a concert film.

For Beyonce’s RENAISSANCE, sources have first-day presales from the top three domestic exhibitors estimated to be between US$6.0m and US$7.0m. While that figure may seem “low” in comparison to what Swift is achieving, it should be noted that this range is similar to first-day pre-sales for major recent titles like AVATAR: THE WAY OF WATER, GUARDIANS OF THE GALAXY VOL.3 and ANT-MAN AND THE WASP: QUANTUMANIA.

By the time Beyonce’s movie hits exhibitors, her world tour will have been over for two months. However, Swift’s movie employs a different release strategy, with a theatrical release in the middle of her historic tour, which could be one of the main reasons why her presales are outperforming Beyonce’s by as much as they are.

Welcome Relief

As previously mentioned, the largest theater chain in the world (AMC) won distribution rights for both of these films. Theater chains that self-distribute concert films like this can not only avoid numerous fees, but also utilize the craze behind these types of musicians and sold-out tours to avoid the need for inflated marketing expenses. For the talent this direct distribution model means less fees and a more profitable way to exploit their films by directly activating the hundred millions of fans and followers

For months, the film community has been enthralled with writer and actor strikes, which resulted in numerous high profile fall releases like KRAVEN THE HUNTER, DUNE: PART TWO and GODZILLA X KONG: THE NEW EMPIRE being delayed to 2024 since talent wasn’t allowed to partake in any publicity. With no clear box office hits coming through the rest of this year in the form of more traditional film releases, the widely projected success of both Taylor Swift and Beyonce’s upcoming movies may provide a lifeline for theaters and influence more deals like this in the future for concert films.

2023 Toronto International Film Festival Special

Throughout this year, we at Cinelytic have been reviewing the projections we published back in September of 2022 for the full 2023 slate, with which we estimated a total domestic gross of US$8.65b. This efficient early prediction model also allows us to forecast home video and TV revenues, offering a truly unique tool for the film industry. So far in 2023, as shown in the graphic below, we’ve maintained impressive precision as it relates to our domestic box office projections, currently tracking at around 93% accuracy through the month of August:

With the 48th annual Toronto International Film Festival (TIFF) about to kickoff this week, we at Cinelytic decided to utilize this same forecasting tool and take a deep dive into a series of upcoming releases that are garnering significant attention as potential “hot sales titles” at this year’s ceremonies: THE CRITIC, MEMORY and LEE. While our signature ROI forecasting, which is incorporated later in these Insights, is more useful for financiers, producers and all those providing equity for a project, our sales estimates tool allows both buyers and sellers at festivals like TIFF to view the per territory value estimations of a title inclusive of all media rights (box office, home video, TV and ancillary). As highlighted in the graphic below, this tool may be more interesting to those in a market setting who are attempting to calculate the correct figure each territory’s rights should be bought or sold for:

THE CRITIC, a British period thriller that starring Ian McKellan, Gemma Arterton, Mark Strong and Lesley Manville, may have considerable international appeal, particularly in the United Kingdom, due to its attractive genre, setting and exclusively English cast. LEE, a historical drama starring Kate Winslet, is predicted to be in higher demand abroad in comparison to MEMORY, a drama starring Jessica Chastain and Peter Sarsgaard. This make sense when one takes into account the foreign appeal of British star Kate Winslet and WWII related subject matter that incorporates international storylines and characters, while MEMORY is a more understated and focused American story with a fully American cast.

Revenue Forecasting: Spotlight – THE CRITIC

As mentioned above, we also ran director Anand Tucker’s THE CRITIC title through our predictive tool to showcase what may lie ahead for these types of releases in terms of revenue. This tool takes into consideration 19 material input attributes to determine a full-performance waterfall, P&L and ROI. We estimated a budget of US$10m, an additional US$7m in total P&A costs and proposed a modest theatrical release strategy of 800 screens with Ian McKellan in the lead. The Cinelytic platform predicts a DBO of roughly US$6.3m, domestic gross revenues (BO, HV, TV) that total roughly US$13.9m, and international gross revenues totaling US$13.5m:

Based on the anticipated global net revenues (including BO, HE, TV net of distribution fees and expenses), the film is expected to result in a slight loss for whichever studio decides to take it on, with a projected ROI of –6.8% before the talent back-end, which can be substantial.

To understand whether the ROI, investment, and domestic/global net revenues are in sync for a film of this scale and caliber, it is helpful to compare the same data points for the other aforementioned notable titles that will be up for sale at TIFF. As such, we used the Cinelytic platform to also run projections for MEMORY and LEE. The table below outlines the results output by the Cinelytic platform:

As shown above, all three of these titles are projected to result in a loss, with an average ROI of -26.4%. Despite being the first feature film directed by Tucker in 13 years, THE CRITIC’s combination of a mid-tier budget and attractive mystery-focused plot could explain why this title seems like the best bet amongst these three, and thus why our projections for this title are particularly aggressive in terms of international revenue.

Director Michel Franco’s last feature, SUNDOWN, screened as a special presentation at the 46^th TIFF back in 2021. His follow-up MEMORY, which has clearly earned him another invitation to the festival, is a drama that delves into the complexities of mental health. While Jessica Chastain presents considerable and marketable star power, Franco’s signature melancholy and slow-burn approach coupled with this type of subject matter are projected to net a substantially negative ROI for this project.

The final release in this comp set is a biographical drama starring Kate Winslet as Lee Miller, a historical figure who went from a career as a glamour model to enlisting as a photographer to chronicle the events of World War II for Vogue magazine. Kate Winslet’s European appeal also lends itself to slightly aggressive international projections, and while director Ellen Kuras has only one documentary film to her name, she has had a recent and prolific career in television, helming episodes of high profile shows like OZARK, THE UMBRELLA ACADEMY and THE TERMINAL LIST over the past few years.

All to Say…

For feature films there is no crystal ball, and it is very difficult to predict performance with a high degree of success.  What we’ve hopefully been able to showcase is that one can make better decisions, in a more efficient way using Cinelytic. Each of THE CRITIC, MEMORY and LEE are important indie films that deserve to be released in the best formats possible.  What we can say using Cinelytic is that there is a proper price point for each film, along with an appropriate P&A and distribution strategy. If both are correctly applied, a definitive road to providing a positive ROI can present itself.  It may be that a film releases theatrically in all markets or that it eschews theaters all together to release first at home.  The reality is that we take the guesswork out of the equation replaced with proven science and business fundamentals to allow you to make the right choice.

TIFF will provide many a distributor with the opportunity to buy great quality films, so let Cinelytic provide you with the tools to buy them at the right price.   

This time last year, Cinelytic Insights dove into the first true “Summer Blockbuster” season since 2019. We ran projections on the four most high-profile live-action films (DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS, TOP GUN: MAVERICK, JURASSIC WORLD DOMINION and THOR: LOVE AND THUNDER) being released between May and June, and discussed how the studios behind them were poised to capitalize on a return to theatrical viewing.

Those films ended up showcasing performance that vastly exceeded expectations, respectively earning US$955.8m, US$1.5b, US$1.0b, and US$760.9m in global box office (GBO) revenue. In terms of domestic box office (DBO) revenue alone, 2022 raked in US$7.347b, representing a 64.4% increase from the year prior.

Forecasting Accuracy

As for this year, Cinelytic ran projections back in September of 2022 for the full 2023 slate, estimating a total domestic gross of US$8.65b. This efficient early prediction model also allows us to forecast home video and TV revenues, offering a truly unique tool for the film industry. So far in 2023, as shown in the graphic below, we’ve been impressively spot on with our overall domestic box office projections, currently tracking with just above 94% accuracy:

To give you some perspective on how 2023 will achieve this projected 17.4% increase in DBO from 2022, we need to digest and evaluate the upcoming Summer, which is poised to contribute a material portion to the year-end tally. 

We decided to highlight a few key titles from the 2023 CY projection that we ran in September of last year, picking the five most high-profile blockbuster titles from each major studio set to be released between June and August of 2023.

The Flash – All Media Revenue Forecast

We forecasted these titles on our platform, spotlighting Warner Bros. Pictures’ upcoming addition to the DC Extended Universe (DCEU), THE FLASH, to showcase what the summer of 2023 may have in store. Utilizing the reported budget of US$220m, global P&A costs totaling an additional US$200m, and 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$241.8m and IBO of US$280.0m in the base case median scenario.

In addition, the Cinelytic platform is capable of predicting Home Video and TV revenue ultimately based on real data:

Based on the anticipated global net revenues (including BO, HE, TV net of distribution fees and expenses), the film is projected to result in a strong return for the studio, with a projected ROI of 141.5% before the talent back-end, which can be substantial. The studio investment of US$201.3m, along with the distribution pattern and story elements all coalesce in a very strong ROI for this film.

Summer Blockbuster Deep Dive

To understand whether the ROI, investment, and domestic/global net revenues are in sync for a film of this caliber, it is helpful to compare the same data points for other Summer titles releasing in the coming months. For this analysis, we used the Cinelytic platform to also run projections for INDIANA JONES AND THE DIAL OF DESTINY, MISSION IMPOSSIBLE – DEAD RECKONING PART ONE, OPPENHEIMER and GRAN TURISMO. The table below outlines the results output by the Cinelytic platform:

As shown above, three of these additional titles are projected to result in impressive returns, and all five titles showcase an average ROI of 137.5%. While still displaying a positive return for Sony Pictures, the outlier in this group is undoubtedly GRAN TURISMO, which has a projected ROI of 15.0% before the talent back-end. With its likely high budget, it may be tough to attract the large audiences needed for a notable profit without a household name in a lead role and with a director who, while talented, only has one true box office hit to his name that was released in 2009 (DISTRICT 9).

Walt Disney Studios’ fifth installment in the INDIANA JONES franchise has the highest reported budget amongst the five analyzed films at US$300m and is projected the result in the second lowest ROI amongst the set at 102.0%. It’s a title that will need to overcome its lukewarm initial reactions and enjoy a lengthy and fruitful theatrical run to justify its inflated budget and assumed P&A costs.

TOP GUN: MAVERICK, which was undoubtedly the most talked about movie of 2022, released just prior to last year’s summer slate and became the 12th highest-grossing film in history. Tom Cruise’s next project will be the seventh installment in the MISSION: IMPOSSIBLE film series. With all the TOP GUN momentum behind him and the added statistic that his last two MISSION: IMPOSSIBLE entries averaged US$737.2m in global box office revenue, the Cinelytic platform has Paramount Pictures’ biggest release of 2023 earning them an impressive ROI of 196.6%.

The final film we analyzed is Christopher Nolan’s latest historical drama OPPENHEIMER. Nolan’s last release in the midst of the COVID pandemic, TENET, unfortunately, broke an impressive career-long box office streak that has made him the 7th highest-grossing director in history. Considering the film’s $100m reported budget and estimated marketing costs, many in the industry believe it needs to earn at least US$400m to make a profit. While it boasts a three-hour runtime and R-rating, the star-studded cast, IMAX filming appeal and Nolan’s successful history in the genre have the project yielding an ROI of 232.7% on the Cinelytic platform.

All to say…

While the industry still hasn’t and may not again reach pre-COVID levels of box office revenue, the recovery of the 2022 theatrical business, and in particular the success of that Summer’s release slate, was enough to breathe some confidence into the lungs of studio execs. Five of the Top 10 grossing titles at the 2022 worldwide box office were released in the Summer months, and with additional success stories like BLACK PANTHER: WAKANDA FOREVER and AVATAR: THE WAY OF WATER to close out the year, it’s no wonder that the major studios almost immediately began marketing the 2023 summer slate at the turn of the new year. Whether or not the industry underperforms, matches or exceeds the revenue earned from last Summer is a question the industry will have an answer for by the Fall.

2023 Cannes Film Festival Special

The 76^th annual Cannes Film Festival is well underway and continuing through this upcoming weekend, and several events have already begun making headlines. Whether it’s the rapturous reception for Martin Scorsese’s latest and long-awaited epic KILLERS OF THE FLOWER MOON, the “comeback” of Johnny Depp, or the career tribute to Harrison Ford, this year seems to be the subject of substantial media coverage.

As such, we at Cinelytic decided to take a deep dive into a series of titles that sold during last year’s 75^th festival to see how their presence/participation and release strategies translated into OTT viewership. Based on the type of releases, there were essentially three different trends of performance.

Furthermore, we forecasted the potential performance of a couple of the hottest “for sale” titles on the market at this year’s ceremonies that are already garnering significant attention.

Which of last year’s sales found a home on streaming?

Since streaming (VOD/SVOD) became one of the main revenue streams for festival titles over the last few years, we wanted to analyze consumption to see how audiences engaged with films that received the most attention during Cannes 2022.  To do so, we used our proprietary OTT viewership proxy system that aggregates upwards of 100m transactions per day from P2P sites around the globe. 

The data cumes up to 35b transactions per year.  In this case, we took six of the most high-profile sales from last year and pulled their first seven days of release on OTT to showcase a directly comparable metric:

While none of these releases seemed to turn a profit at the box office, it’s clear in reviewing the data that at least a couple were able to perform respectably in regard to the home viewing audience for independent films. Amongst these options, George Miller’s THREE THOUSAND YEARS OF LONGING and David Cronenberg’s CRIMES OF THE FUTURE had the best openings on OTT and followed a similar path that included a comparable Day 3 drop off, respectively averaging 5.2% and 3.6% of the viewing market share throughout their first week of release.

These top two features benefited from more marketable cast members (Viggo Mortensen, Kristen Stewart, Idris Elba) and the mystique of their directors. George Miller seemingly directs a movie every five to six years, and THREE THOUSAND YEARS OF LONGING was his first project since 2015’s lucrative MAD MAX: FURY ROAD, which is now regarded as one of the best action films ever made. David Cronenberg is another man who is no stranger to a layoff, as CRIMES OF THE FUTURE was his first production in eight years. All to say, it’s no mystery that these two titles performed the best amongst this set due to the buildup and anticipation that accompanies any effort by either of these filmmakers.

The next three titles that performed comparably to each other were TRIANGLE OF SADNESS, MEN and ARMAGEDDON TIME, all of which showcased more static movement and respectively averaged 2.9%, 2.4% and 2.2% of the viewing market share. Director Ruben Östlund was quite the hot commodity at the 75^th Cannes Film Festival, being that his previous release THE SQUARE from 2017 won the highest prize possible at Cannes: the coveted “Palm d’Or”. His follow-up starring Woody Harrleson was well received in 2022, as he became just the ninth filmmaker in history to win the Palm d’Or twice. That being said, most of the marketing behind this title was geared toward Europe (namely Sweden and Germany), which may explain why it didn’t make waves with the US streaming audience.

Both MEN and ARMAGEDDON TIME were also helmed by acclaimed directors: Alex Garland and James Gray. Gray’s semi-autobiographical period piece can be viewed as an underperformer given that it was also nominated for the Palm d’Or and included the presence of names like Anne Hathaway, Anthony Hopkins and Jessica Chastain. Meanwhile, Garland’s twisted folk horror effort did not benefit from any major stars and proved to be a tough sell to audiences due to what were perceived as disturbing and confusing elements.

The final movie we looked at in this OTT analysis was the coming-of-age drama AFTERSUN. While this project’s lead Paul Mescal did receive a “Best Actor” nomination at the 95^th Academy Awards, this news wasn’t announced until a month after the film’s digital release. Without the boost of a nomination announcement and absence of major talent, it’s no surprise that this grounded and emotional directorial debut only managed to average 0.5% of the viewing market share.

Now on to Cannes 2023.

Netflix makes a move, while Ron Howard is still on the market

Ron Howard has enjoyed a very lucrative and productive career that has usually leaned more toward bigger budgets and all-star casts. That being said, his last couple of projects (HILLBILLY ELEGY, THIRTEEN LIVES) have been less geared toward the blockbuster crowd and had budgets closer to US$50m, and it seems as if his upcoming release ORIGIN OF SPECIES will continue that trend. We ran this title through our predictive tool, which takes into consideration 19 material input attributes to determine a full-performance waterfall, P&L and ROI. 

We estimated a budget of US$55m for this survival thriller starring Ana de Armas, Jude Law, Alicia Vikander and Daniel Bruhl, an additional US$53m in total P&A costs and proposed a theatrical release strategy of 3,100 screens with de Armas in the lead. The Cinelytic platform predicts a DBO of over US$54m and domestic gross revenues (BO, HV, TV) that total over US$117m. While it may be one of Howard’s smaller-scale films on his resume, the high-profile talent and mass-appealing genre are projected to net a positive ROI:

Most of the current sales buzz at Cannes revolves around Netflix’s recent US$11m acquisition (North American rights) of the Todd Haynes helmed romantic drama MAY DECEMBER starring Natalie Portman and Julianne Moore. While, as a Netflix acquisition, this title will likely not be given much theatrical distribution (if any).

We ran two forecasts for the title – a domestic sales price forecast for a classic theatrical window distributor and a worldwide ROI forecast.

Estimating a budget of US$10m, domestic P&A costs of US$7.5m, and a US theatrical release of 1,100 screens – with Portman in the lead, the Cinelytic platform predicts a DBO of over US$9m and domestic net revenues of BO, HV, TV 10 year ultimates (minus all distribution fees and expenses) of US$4.98m in the base case. Netflix paid more than double that amount.

As noted in the visualization below, the mix of release strategy and revenues by media and associated costs would net a negative ROI for this project worldwide, and thus selling the domestic rights to a streamer like Netflix for US$11m makes sense as the producers can recoup their budget while the streaming giant is simultaneously able to market a prestige title on its platform.

Conclusion

We’ll all have to wait and see who wins the bidding war for Howard’s latest thriller, and whether or not that acquisition will involve a theatrical release strategy. As mentioned before, none of the six sales we analyzed from last year’s film festival found success at the box office, and only two of them were able to flaunt respectable openings on digital platforms. As such, it seems as if more and more of the types of films marketed at Cannes may be heading in the direction of “straight to streaming” distributors like Netflix, with a need to focus marketing efforts more on home audiences in order to boost OTT views.

An update on post COVID box office windowing

Shortly before this year’s 95^th Academy Awards, Steven Spielberg pulled Tom Cruise aside to tell him that he “saved Hollywood’s ass and might have saved theatrical distribution”. He was of course referring to the fact that TOP GUN: MAVERICK exceeded all expectations to become the second movie to gross over US$1b at the worldwide box office following the COVID-19 pandemic. With a US$1.49b worldwide gross, the film now ranks as the 12th highest-grossing movie in history (unadjusted for inflation). While SPIDER-MAN: NO WAY HOME also managed to pass the billion-dollar threshold just five months earlier, the industry was still skeptical that audiences were ready to return to theaters in large numbers for any movies that were not related to comic book IP.

However, since the success of Tom Cruise’s nostalgia play, a handful of other titles have also exceeded expectations to differing degrees with differing theatrical windowing strategies. The Marvel Cinematic Universe’s follow-up to 2018’s groundbreaking BLACK PANTHER, James Cameron’s sequel to the highest-grossing film in history, and the latest installments in the SHREK and ROCKY franchises all released within nine months after TOP GUN: MAVERICK, which utilized a traditional 88-day theatrical window.

The four aforementioned titles that followed respectively were released with 82-day, 102-day, 16-day and 29-day exclusive theatrical windows, grossing US$453.8m, US$683.0m, US$185.5m and US$155.2m in domestic box office revenue.

Historically speaking, films that perform well at the box office after longer theatrical windows usually also enjoy impressive numbers in regard to home viewing. To evaluate and compare the streaming performance of these five box office success stories, we used our proprietary OTT demand data. This data captures 125m daily P2P transactions globally for a yearly total of 35b transactions. For this exercise, we utilized this data to compare the first seven days of streaming performance for all five titles:

The graph above allows us to view three distinct groups. James Cameron’s long-awaited sequel to AVATAR was finally made available on digital platforms late last month after cementing itself as the third highest grossing film in history with a global theatrical intake of US$2.3b. It should come as no surprise that this title is in a league of its own in-home viewing as a mass appealing blockbuster in the truest sense of the word, despite being justifiably marketed as a film that was a “must see” in theaters for the duration of its elongated 102-day window. This movie averaged an impressive 17.9% of the viewing market share throughout its first week (peaking at 27.0%), with a notable Day 2 bump and comparable Day 5 slump.

In the next grouping, we see TOP GUN: MAVERICK and BLACK PANTHER: WAKANDA FOREVER, both of which utilized windows closer to 90 days. While both titles suffered a slightly earlier Day 4 drop off in comparison to AVATAR, both performed very similar to each other overall. TOP GUN: MAVERICK managed to recover to a steady and slightly higher level, narrowly besting its comic book companion with a 13.8% average market share capture.

Finally, we have CREED III and PUSS IN BOOTS: THE LAST WISH. Due to less extensive target demographics than the three aforementioned films, one would not expect these two titles to perform as well at either the box office or on digital platforms, especially with theatrical windows less than 30 days. None the less, both franchise installments still managed double digit market share averages during their first seven days, with CREED III following a steadier path to 10.7% and PUSS IN BOOTS: THE LAST WISH achieving 10.1% and a noticeable Day 3 drop.

What does this all mean?

The overall message one can draw from these metrics is related to different methods of windowing and maximizing both box office and home video revenue. Throughout the COVID-19 pandemic, titles shifted from “straight to streaming” to the “day and date” simultaneous release model in order to adjust to sporadic cinema closures. Later, as movie theaters began to re-open at a faster and more consistent pace, but COVID protocols were still in effect, the 45-day exclusive theatrical window seemed to become the best option.

However, as the film industry slowly attempts to return to a state of “normalcy” and we collect more data like the information detailed above, it seems as though massive blockbusters such as AVATAR: THE WAY OF WATER, BLACK PANTHER: WAKANDA FOREVER and TOP GUN: MAVERICK can once again utilize and find success with the more traditional pre-COVID 90-day exclusive theatrical window, only to follow that by dominating the home viewing market share once made available on digital platforms. Titles that have less globally recognized IP and less potential for prolonged box office dominance (CREED III, PUSS IN BOOTS: THE LAST WISH) seem better suited for shorter exclusive theatrical windows well below 45 days so that they can maximize their respective marketing budgets and quickly capture the attention of the home viewing market.

Will this continue?

It will be interesting to see how the next run of high-profile theatrical releases fare at both the box office and on streaming. Some recent releases like ANT-MAN AND THE WASP: QUANTUMANIA and SHAZAM! FURY OF THE GODS underperformed theatrically, while JOHN WICK: CHAPTER 4 is already the best-performing film of that franchise in terms of global ticket sales and is still on its exclusive theatrical run. The latest Marvel entry was just recently released on digital after a 60-day theatrical window, while the sequel to SHAZAM! implemented a much shorter 21-day window. Interestingly enough, the lackluster box office performance of both these comic book films has been followed by successful initial digital runs. Next month alone brings us three additional potential heavy hitters in GUARDIANS OF THE GALAXY VOL.3, FAST X and THE LITTLE MERMAID, and we’ll have to wait and see if they will supplement any theatrical success with impressive digital viewership like the titles we analyzed above.

What is the state of Animation in 2023?

Last month, Cinelytic Insights sampled our full domestic box office (DBO) projections for 2023. So far through the first two months of the year, these projections have proven to be roughly 90% accurate. While, as should be expected, the majority of this box office revenue will be earned by live action films, a respectable portion of the total DBO will be courtesy of family-oriented movies that incorporate animated elements.

Looking at the Top 20 films in regard to worldwide box office performance in 2022 and the two years preceding the onset of the COVID-19 crisis (2018-2019), it’s clear that animation has played a pivotal role in this industry and has often showcased some of the most impressive returns.

Of these 40 films between 2018 and 2019, 12 were G/PG rated titles with animated elements catering to young children and families. The average budget amongst these films was roughly US$156m, while the average worldwide box office gross was about US$827m. Furthermore, five of these same animated features surpassed the coveted global box office threshold of US$1b.

In 2022, the first year of theatrical releases following the pandemic, six titles in the Top 20 catered to families. The average budget amongst these films was roughly US$108m, while the average worldwide box office gross was understandably and significantly lower at around US$415m. While 2022 featured no animated films that crossed the US$1b threshold, Universal Pictures’ MINIONS: THE RISE OF GRU came the closest at just under US$940b.

Upcoming releases

When comparing the pre and post pandemic global box office averages, it is clear that audiences have been willing to return to cinemas to view live actions blockbusters in person, while G/PG rated family films found it more difficult in 2022 to garner comparable attention. However, with the first major animated release of this year less than a month away, we at Cinelytic analyzed all six of the most notable upcoming animated titles planned for release between April and August.

We highlighted the April 5^th release of Universal Pictures’ THE SUPER MARIO BROS. MOVIE to showcase what the Spring and Summer of 2023 may have in store for the family friendly film market. Utilizing an estimated budget of US$175m, global P&A costs totaling an additional US$190m, and 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$218.7m and IBO of US$333.4m. In addition, the Cinelytic platform is capable of predicting Home Video and TV revenue ultimately based on real data:

Based on the anticipated global net revenues (including 10 year “ultimates” that encompass BO, HE, and TV net of distribution fees and expenses), the film is projected to result in a highly respectable return for the studio, with an ROI of 264.3% before the talent back-end, which can be very substantial.

However, to make sense of this forecast, one needs to understand the same analyses for the other comparable titles to be released in the following months: THE LITTLE MERMAID, SPIDER-MAN: ACROSS THE SPIDER-VERSE, ELEMENTAL, RUDY GILLMAN TEENAGE KRAKEN and TMNT: MUTANT MAYHEM. The table below outlines the results output by the Cinelytic platform:

As shown above, three additional titles are also projected to result in impressive returns, averaging 252.5% in ROI, with SPIDER-MAN: ACROSS THE SPIDER-VERSE expected to perform the best by a significant margin at 447.7%. The two films that appear to be outliers are Walt Disney Studios / Pixar’s ELEMENTAL and Universal Pictures’ RUDY GILLMAN, TEENAGE KRAKEN.

This makes sense when one takes into account that neither of these films have major stars attached, or the luxury of being directly associated with an already established IP or fan base like their four competitors. Even amongst these two outliers, ELEMENTAL stands alone, and is projected to result in a loss. This can be attributed to what will likely be a notably higher total budget, as has become the norm or Pixar releases.

What’s in store for this year?

While we’ll have to wait and see if this year delivers an animated feature that is as lucrative as something like 2022’s MINIONS: THE RISE OF GRU, the total box office haul from 2023 should do a better job than last year of reminding us how exhibitors can perform when moviegoers are not afraid or stopped from enjoying their local theater.

As previously mentioned, Cinelytic has in-depth projections for not only the top major studio releases for the upcoming year but also titles being made available theatrically by several mini-major/independent distributors.

 Please feel free to reach out here if you’d like more detailed information on what our projections say for each major title awaiting release throughout the next nine months.

2023 Domestic Box Office Forecast Deep Dive

As highlighted in last month’s Insights, 2022 represented a welcome boost in Domestic Box Office (DBO) revenue in comparison to the pandemic era of theater closures and limited releases in the two years prior. Last year earned US$7.37b in domestic ticket sales, equating to a massive 64% increase from COVID stricken 2021. While it’s possible we may never again reach the pre-pandemic US$11.63b DBO average achieved between 2018 and 2019, it’s safe to say things are trending in the right direction.

In December of last year, we at Cinelytic decided to get a head start on analyzing what 2023 has in store for the domestic theatrical industry, running projections on all the major releases announced for the upcoming year to produce a bottom forecast of the annual and monthly domestic box office. Cinelytic focused on 48 titles planned for wide release, with a breakdown of the number of releases from each studio as follows:

2023 Annual and Monthly Forecasts

In total, Cinelytic’s forecasts US$8.57b in 2023 DBO, which represents a 16% increase from 2022. This figure was further broken down into monthly forecasts.

As a testament to our accuracy, let’s take a look at the actual performance of the January 2023 DBO in comparison to our projections. The total domestic revenue from January is US$584.5m. Cinelytic’s December 2022 estimate for the same figure was US$533.0m, coming within 9% of the actual figure.

Bottom Up 2023 Per Title Forecasts:

The Cinelytic platform utilized 19 key project attributes to run predictive analyses for these titles based on our proprietary algorithms and machine learning. It is important to note that the system allows for a COVID adjustment to the predictive output results. We also took into account late 2022 major releases that are still generating theatrical revenue early in 2023. In this case, this meant including a calculated portion of the projected early 2023 DBO revenue from BLACK PANTHER: WAKANDA FOREVER, PUSS IN BOOTS: THE LAST WISH, AVATAR: THE WAY OF WATER, and BABYLON into our early 2023 income forecasts. A summary of the Top 10 highest-earning films in regard to projected DBO is highlighted in the graphic below:

What Does Each Forecast Look Like?

Highlighting Walt Disney Studios’ second addition of the year to the Marvel Cinematic Universe, GUARDIANS OF THE GALAXY VOL.3, we can provide an in-depth example of just one of these projections. Utilizing an estimated budget of US$200m, global P&A costs totaling an additional US$220m, and attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$451m in the base case median scenario. In addition, the Cinelytic platform is capable of predicting Home Video and TV revenue ultimately based on real data:

Based on the anticipated global net revenues (including domestic/ international box office, home entertainment, TV net of distribution fees and expenses), the film is projected to result in a substantial return (10-year ultimate) for the studio, with a projected ROI of 465.0% before the talent back-end, which can be substantial.

Methodology

While the 48 films we analyzed in detail may represent the bulk of the DBO set to be earned in 2023, there are of course far more movies planned for release. In order to expand this analysis and conclude upon the full domestic forecast, we analyzed actual performance in 2018, 2019 and 2022 (ignoring the pandemic period) and looked to see how the Top 48 titles performed against the total yearly DBO for each of these years. In 2018, 2019, and 2022, the Top 48 performing titles respectively accounted for 71%, 74%, and 89% of the total DBO, which equated to an average of 78%. Utilizing this average, Cinelytic’s DBO projection for 2023 calculates to the aforementioned US$8.57b.

There’s More Where That Came From

As previously mentioned, Cinelytic has in-depth projections for not only the top major studio releases for the upcoming year but also titles being made available theatrically by several mini-major/independent distributors. Please feel free to reach out here if you’d like more detailed information on what our projections say for each major title awaiting release throughout the next 11 months.

Sundance Post-Covid: What works, what doesn’t?

With the 2023 Sundance Film Festival commencing on January 19th, we decided to take a deep dive into the streaming performance of the top Sundance 2022 titles to see how their festival presence/participation and release strategies translated.

In addition, we forecast the performance of several 2023 titles, including the highly anticipated title EILEEN which is scheduled to premiere at Sundance on January 21st.  

Does theatrical performance translate to stronger OTT?

Since streaming (VOD/SVOD) became one of the main revenue streams for Sundance titles over the last few years, we analyze consumption to see how audiences engaged with the major Sundance 2022 titles.  To do so, we used our proprietary OTT viewership proxy system that aggregates upwards of 100m transactions per day from P2P transactions around the globe. 

We took the top 2022 titles in competition and pulled their 1st seven days of release on OTT to showcase a directly comparable metric:

In reviewing the data, we see that BREAKING and WATCHER opened well on OTT and managed good holds through Day 7.  The interesting part is that both were initially released theatrically on 750-900 screens with cume DBO revenue in the US$2m – US$3m range.  This may help to explain their higher opening market share in comparison to their competitors and playability over their first week of release. 

These top two features would have benefited from marketing campaigns for their theatrical release, as well as reviews and word of mouth. Other titles that were released straight to OTT and/or had more limited theatrical releases had less impactful openings with steeper drops as their opening week on OTT progressed. 

While CHA CHA REAL SMOOTH did take home an “Audience Award” and garnered rave reviews for its filmmaker and star Cooper Raiff, it performed noticeably less on OTT than the other four analyzed titles. This, in part, may be understandable once one takes note of the genres and target audiences of all five films. WATCHER, BREAKING, DUAL and NANNY all incorporated aspects of the horror and psychological thriller genres, which historically perform rather well on OTT in comparison to independent romantic efforts.    

Now on to Sundance 2023.

Will William Oldroyd build on the success of LADY MACBETH?

We ran the 2023 premiere title EILEEN through our predictive tool, which takes into consideration 19 material input attributes to determine a full-performance waterfall, P&L and ROI.  Estimating a budget of US$8m for the William Oldroyd helmed follow-up to LADY MACBETH, we also took into account a proposed theatrical release strategy of 900 screens with Anne Hathaway in the lead.

The Cinelytic platform predicts a DBO of over US$5m and domestic gross revenues (BO, HV, TV) that total approximately US$11.5m.  As noted in the visualization below, the mix of release strategy and revenues by media and associated costs would net a break-even ROI for this project:

The premiere at Sundance next Saturday might provide the energy and impetus needed for a strong domestic sale by Endeavor Content.  

In looking at a film like EILEEN and the 2022 titles we expect that a potential domestic theatrical release would help propel its life on OTT when it releases later in the year, thereby helping its bottom line and pushing it beyond a break-even ROI scenario.

We additionally ran analyses for other market highlight titles including CAT PERSON, MAGAZINE DREAMS, FLORA AND SON, ALL DIRT ROADS TASTE OF SALT, EARTH MAMA, and others both premiering and in competition. 

Conclusion

All to say, buyers, sellers, and fans alike are excited for a return to a live and in-person Sundance Film Festival. There are plenty of titles holding premieres and in competition to keep audiences busy over ten days. As the festival and market progress and films find distribution, key buying decisions will have to take into consideration whether a theatrical release is merited, and if not, then what can one do to create the necessary awareness for an effective opening on OTT.

The top streamed Films of 2022 by Studio – which studio had most content success?

While the film industry still has not fully recovered, we all know 2022 was a far more lucrative and hope inducing year in comparison to 2021. The Domestic Box Office (DBO) in 2021, still reeling from the aftermath of the Covid-19 pandemic, totaled just US$4.48b, a far cry from the US$11.63b average between 2018 and 2019. In 2022, moviegoers managed to pump up that figure to US$7.37b, representing a 64% increase. The top five grossing films of 2021, led by SPIDER-MAN: NO WAY HOME, totaled US$1.37b of DBO and averaged US$273.5m per movie. The top five of 2022, of course led by TOP GUN: MAVERICK, totaled US$2.34b and averaged US$468.8m per movie.

While audiences seem to be making it clear that they are once again willing to leave their homes for a local theater if the right event film is available (look no further than AVATAR: THE WAY OF WATER if you need another example), it’s not as if the world of streaming and home viewing has taken a hit. This time last year, we at Cinelytic took a deep dive into 2021 OTT viewing by using our proprietary P2P data platform.  The system captures 125m transactions per day across the world to agglomerate to an annual tally of 35b.  As we begin our journey into 2023, we have decided to once again look into the strongest week of playability by title to see how 2022 releases performed. Evaluating the respective Top Five market share of each studio allows one to eliminate seasonality bias as well as the effect of theater closures:

As the above graphic illustrates, known IP, franchises and sequels made up most of the top titles that drove performance for each studio, just as they did in 2021. Marvel titles continued to drive Disney with DOCTOR STRANGE IN THE MULTIVERSE and ETERNALS vs. SHANG-CHI AND THE LEGEND OF THE SEVEN RINGS and BLACK WIDOW in 2021.  The same for Sony with SPIDER-MAN: NO WAY HOME and MORBIUS this year vs. VENOM: LET THERE BE CARNAGE in 2021. 

What is notably distinct however, is that the overall best performing studio in regard to Film OTT viewing, Universal Pictures, was able to claim the top spot with three original concepts (SILENT NIGHT, NOPE, THE NORTHMAN).  The below graphic provides a more expanded look at the Top 10 performing studios when it comes to OTT releases:

In the end, Universal edged out Disney to be the Top Studio for Films with a balanced mix of original ideas and known franchises.  All films generated roughly 20% market share for the Studio.  In the case of others, one or two titles drove a larger share of consumption.  Audiences appear to want both types and content and 2023 looks to be an even better year for the industry and the consumer!  

‘Tis the Season! As 2022 comes to an end, we take a look at how holiday focused titles have fared over the past two years in regard to streaming performance

Holiday movies have been a key component of winter celebrations for Americans since IT’S A WONDERFUL LIFE and MIRACLE ON 34^TH STREET captured the hearts of millions between 1946 and 1947. Since that time, each decade through the end of the 20^th century has provided audiences with at least one holiday classic. Films like WHITE CHRISTMAS (1954), A CHARLIE BROWN CHRISTMAS (1965), SANTA CLAUS IS COMIN’ TO TOWN (1970), A CHRISTMAS STORY (1983), SCROOGED (1988), DIE HARD (1988), A CHRISTMAS VACATION (1989), HOME ALONE (1990), HOME ALONE 2 (1992), THE SANTA CLAUSE (1994) and HOW THE GRINCH STOLE CHRISTMAS (2000) serve as proof that each generation was able to produce content that has both stood the test of time and is consistently rewatched during the festive months.

Since the turn of the century however, outside of one single year, Hollywood hasn’t been able to churn out a single iconic release tied to this season. In 2003 alone, moviegoers were treated to BAD SANTA, LOVE ACTUALLY and ELF, and while two of these share a target demographic that is geared more toward adults, all three can be considered classics. Despite numerous attempts since then, whether it be with titles like THE POLAR EXPRESS in 2004, THE HOLIDAY in 2006 or FOUR CHRISTMASES in 2008, it’s no longer a safe bet to assume that more recent holiday movies will be rewatched for decades.

HOLIDAY STREAMING

Since the onset of the streaming era, which had its dominance expedited during the COVID-19 pandemic, it seems as though the major platforms consistently oversaturate their users with an overwhelming selection of holiday films that include both new releases and reruns of old favorites. Often, these new projects feature low budgets, “washed-up” or lesser-known actors, and cheesy predictable storylines. Despite this, each year still seems to provide consumers with at least a few “at home” viewing options that cater to their seasonal desires and capture a noticeable portion of the available OTT market share. To further understand the current landscape of these streaming titles, we at Cinelytic utilized our proprietary OTT Demand Data which captures 125m P2P transactions daily for a yearly total of 35b transactions.  The best metric for the demand data is the representative market share a title holds against all titles in release.  In this case, we took the first 7 days of P2P consumption for each of the five most popular holiday releases in both 2021 and 2022:

The graph above showcases five titles from 2021, all of which were made available between mid-November and early December: HOME SWEET HOME ALONE, BLACK FRIDAY, 8-BIT CHRISTMAS, A BOY CALLED CHRISTMAS and SILENT NIGHT. The horror-comedy BLACK FRIDAY seemed to separate itself from the pack with 3.4% average market share capture and a significant Day 2 pop, which featured a peak of 6.0% and #2 ranking amongst all available films on that day. 8-BIT CHRISTMAS, A BOY CALLED CHRISTMAS and SILENT NIGHT, respectively released on HBOMax, Netflix and AMC+, showcased an average market share capture range between 1.9% and 2.6%, with less notable Day 2 boosts and a top ranking of #4 (8-BIT CHRISTMAS). HOME SWEET HOME ALONE, which represented the sixth film in the HOME ALONE franchise, was a Disney+ direct release that managed to only average both a market share capture of 1.2% and ranking of #19 amongst all available streaming films throughout its first 7 days. None of these titles boasted any notably marketable stars, and the only one with a nostalgia angle or any tie to a successful franchise (HOME SWEET HOME ALONE) proved to be the weakest.

2022 has proven to be slightly more successful when it comes to holiday streaming, but in what should come as no surprise, that is mostly due to two titles that either feature high profile stars or IP that has proven itself amongst a global audience (or both). Apple TV+’s US$75m budget musical comedy SPIRITED led by Ryan Reynolds and Will Ferrell performed well on OTT, capturing an average market share of 6.7% and claiming the #1 spot amongst all available streaming titles throughout its first four days of release. Meanwhile, Marvel Studio’s THE GUARDIANS OF THE GALAXY HOLIDAY SPECIAL, which was made available exclusively on Disney+ one week after SPIRITED’s debut, managed to capture an even higher average market share of 7.5%. That being said, it was never able to reach the #1 spot in any of its first 7 days, achieving #2 through Day 6 and dropping to #3 on Day 7. This was a result of SPIRITED’s competition during its first week coming mainly in the form of Disney +’s DISENCHANTED, while the Marvel TV special had to contend with the first week of digital availability for Warner Bros. Pictures’ latest addition to the superhero genre BLACK ADAM.

The next best performing title in 2022 was A CHRISTMAS STORY CHRISTMAS. Much like 2021’s HOME SWEET HOME ALONE, this title was tied to a nostalgic classic that still resonates with audiences today. However, unlike HOME SWEET HOME ALONE, this HBOMax release enjoyed considerably more success, achieving an average market share capture of 3.6% and claiming the #1 spot on its first day. Netflix was responsible for the final two films represented on the above graph: the animated release SCROOGE: A CHRISTMAS CAROL and the romantic comedy FALLING FOR CHRISTMAS. While SCROOGE: A CHRISTMAS CAROL only averaged both a 2.0% in market share capture and #12 ranking through its first week, FALLING FOR CHRISTMAS proved to be the worst performing title amongst all 10 films in this analysis. This comeback effort from Lindsay Lohan not only achieved half the average market share of its animated Netflix companion, but also an average ranking of #32 against all its competition.

THE BIG PICTURE

With almost two decades having passed since the last legitimate classic, audiences are still waiting for the next timeless holiday film. With the theatrical industry still in recovery, it may be a while until we see major studios prioritizing thousands of screens for a holiday focused title. For the near future, these types of projects may be relegated to streaming platforms that can be enjoyed while opening presents and spending time with family at home. To find success on these platforms, it seems as though the ever so prevalent trend in the industry applies to these types of releases as well: you need either proven stars or proven IP, and while having both are ideal, moving forward without either is a tall order.

As Oscar race kicks off, we take a look at how “Best Picture” nominees have fared at the box office in the years directly preceding and following the pandemic

Throughout the history of the film industry, prestige films that aim to take home the most coveted gold statue are rarely expected to make a sizable dent at the box office. In the months during and directly following the COVID-19 pandemic, that became truer than ever, as the audiences who dictate which movies do well were only making their way to theaters for the types of event films that usually don’t hear their name called when “Best Picture” nominations are announced. However, while the film industry is without a doubt forever changed, the slow return to normalcy has yielded a number of theatrical releases in the past year that are collectively generating the types of revenue that at least slightly reminds us of the “good old days”.

THE POTENTIAL NOMINEES

Every year, the team over at Variety makes their predictions on which films will be nominated for “Best Picture” at the upcoming Academy Awards. Using their predictions as an initial guideline with only a couple differing opinions, we at Cinelytic decided to put together our own list of the 10 films likely to be in the race and took a look at how they have performed thus far in theaters:

As Steven Spielberg’s THE FABELMANS, Sarah Polley’s WOMEN TALKING and Damien Chazelle’s BABYLON have yet to enjoy a wide release, the figures shown in relation to these three titles were generated using our Cinelytic projection platform and the use of 19 key attributes that run the AI output, including budget, genre, rating, talent and IP value. A quick look at the table above makes it evident that much of the collective box office performance (roughly 69%) from these titles has been carried by Paramount Pictures and TOP GUN: MAVERICK, with its eye popping US$1.5b of global revenue and now cemented rank as the eleventh highest grossing film in history. While this kind of monumental gross from a single title may seem like an anomaly for a set of “Best Picture” nominees, that just isn’t the case. In the two awards ceremonies that took place prior to the pandemic (the 91^st and 92^nd Academy Awards), three films amongst the 17 total nominees grossed just under to well over US$1b at the global box office: BLACK PANTHER (US$1.4b), BOHEMIAN RHAPSODY (US$911m) and JOKER (US$1.1b). Between those two years, these three titles made up 57% of the total box office gross amongst all “Best Picture” nominees.

WHAT ABOUT 2020 – 2021?

Did this same “blockbuster boost” pattern take place during the COVID era? Of course not. With everyone stuck at home, the vast majority of films during this time were initially released straight to streaming and later via the “day-and-date” model. The pre-pandemic 91^st and 92^nd awards had only three nominees with streaming focused releases (ROMA, THE IRISHMAN, MARRIAGE STORY). Contrarily, the 93^rd and 94^th ceremonies showcased 10 out of 18 “Best Picture” nominees that either had little to no exposure in theaters or simultaneous “day-and-date” releases. The highest grossing of these films was Warner Brothers Pictures’ DUNE, which pulled in US$402m. The next highest was more telling of the times, as Walt Disney Studios and WESTSIDE STORY managed to earn only US$75m. The table below outlines how all the nominees have performed since the 2019 ceremony, inclusive of our predictions for upcoming 95^th Academy Awards:

ARE WE BACK TO NORMAL?

If our predictions and projections are correct and the upcoming “Best Picture” contenders collectively gross upwards of US$2.2b at the global box office, that will be welcome news for studios and exhibitors who saw nominees over the previous two years total US$759m. Furthermore, if titles like BLACK PANTHER: WAKANDA FOREVER, which to date has grossed US$678m worldwide, and AVATAR: THE WAY OF WATER, whose predecessor accumulated a historic US$2.7b, somehow sneak their way into the list of nominees, that collective total may be significantly higher.

All that said, the reality is that “Best Picture” nominees represent only 10 films. When focusing just on total domestic box office performance, 2022 has thus far earned US$6.7b. While that’s a solid increase in comparison to US$2.1b in 2020 and US$4.5b in 2021, it’s a far cry from the US$11.6b average between 2018 and 2019. Though it’s clear that we’ve got a long way, 2022 represents the first step in a positive direction to hopefully reach levels sooner rather than later that the industry deems acceptable.

Goodbye Summer…Hello Fall

Historically speaking, box office expectations tend to ease up following the summer, as the fall and winter seasons that are collectively referred to as “awards season” give way to a focus on dramas that are more likely to garner nominations. That being said, there is usually still a slate of crowd-pleasing blockbuster and tentpole titles that round out the end of each year. 2022 is no different, as three such titles still await release in the remaining months from two of the industry’s major film studios: Warner Bros. Pictures and Walt Disney Studios.

Last month, we at Cinelytic analyzed the four blockbuster titles looking to stand out during the upcoming awards season and forecasted them on our platform. The point of this exercise was to showcase what the end of the year may have in store for movies that appeal to mass audiences. The films included the now released HALLOWEEN ENDS, this weekend’s BLACK ADAM, BLACK PANTHER: WAKANDA FOREVER and James Cameron’s next big swing at once again making history at the box-office, AVATAR: THE WAY OF THE WATER. A summary of our domestic box office (DBO) projections were featured last month in a Variety article highlighting the Q4 box office offerings.

Two of these anticipated films represent the next two releases in the box office dominant superhero genre. Warner Brothers has taken it upon themselves to grant perennial box office star Dwayne Johnson his own superhero franchise in the form of BLACK ADAM, and Marvel fans are curious to see how BLACK PANTHER: WAKANDA FOREVER will turn out following the untimely and unexpected passing of Chadwick Boseman, the titular star of the preceding and groundbreaking film. Our projections show that while the next Marvel release may not match the performance of its predecessor, it will once again have the upper hand over the next installment within the DCEU, which is understandable given the fact that BLACK ADAM does not have the type of fan base that the BLACK PANTHER franchise has already established. As for December’s follow-up to highest grossing film in history, AVATAR: THE WAY OF WATER, while still projected to achieve historic numbers, is projected to pull in a domestic cumulative gross that will be lower than its iconic predecessor, likely in part due to the 13-year gap between the two films.

The Accuracy of Previous Projections

As we await the performance of the aforementioned and upcoming releases, it’s important to also analyze how other recent projections from our platform compared to actual figures. Last May, our Insights highlighted the four most high-profile live action films released in the first true summer blockbuster season since 2019.  Other than our numbers for TOP GUN: MAVERICK, which exceeded all insider expectations to now cement itself as the 11^th highest grossing film of all time, Cinelytic projections for the DBO performance of the summer slate proved to be strikingly accurate, and we correctly predicted that a lucrative and welcome summer season was fast approaching the industry. As highlighted in the table below, the platform forecasted DBO revenues of US$390m, US$375m and US$353m for DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS, JURASSIC WORLD DOMINION and THOR: LOVE AND THUNDER respectively, totaling US$1.118b. Meanwhile, the actual figures for these three titles were US$411m, US$376m and US$343m respectively, totaling US$1.130b. This represents just a 1.09% discrepancy in regard to total DBO gross revenue when comparing Cinelytic projections to actual performance on these three summer blockbusters.

 To further evaluate and compare the performance of these welcomed box office success stories, we used our proprietary OTT demand data to analyze the continued success of these titles after their initial theatrical runs. This data captures 125m daily P2P transactions globally for a yearly total of 35b transactions. For this exercise, we utilized this data to compare the first seven days of streaming performance for all four titles:

The graph above shows that DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS was the overall best performing title when it comes to home viewing, displaying a significant pop on its second day of release and capturing an average of 13.9% of the total viewing market share throughout its first week. While the accompanying Marvel release THOR: LOVE AND THUNDER also enjoyed a noticeable increase on its second day of viewing and showcased a comparable trendline, it never managed to capture above 20% of the total market share and had a lower seven-day average of 12.8%. JURASSIC WORLD DOMINION was simultaneously the weakest and most consistent amongst these titles, never realizing a significant increase or drop throughout its first week and averaging 11.1% of the market share. The most interesting realization from this graph is how successful TOP GUN: MAVERICK still managed to be on streaming despite seemingly drawing the entirety of the North American viewing audience to movie theaters upon its initial release. While the film did see a significant drop in its market share performance on its fourth day, it still averaged the second highest market share capture at 13.8%.

Will the Momentum Continue?

The last year has offered relief to the major studios that were anxiously awaiting the return of true global success at the box office for their big budget titles. SPIDERMAN: NO WAY HOME and THE BATMAN kickstarted this resurgence near the start of 2022, followed by DOCTOR STRANGE IN THE MUTLIVERSE OF MADNESS, TOP GUN: MAVERICK, JURASSIC WORLD DOMINION and THOR: LOVE AND THUNDER providing monthly reminders through July that moviegoers around the world were comfortable returning to cinemas again. After a couple of down months in August in September, it seems as if cinemas are due for another influx of audiences through the end of the year. Between the three upcoming blockbusters and accompanying dramas about to be released throughout the same months, it seems as if the full range of viewer demographics will be making their way to cinemas. That being said, it remains to be seen whether or not the upcoming awards friendly titles slated by both major and independent studios will complement the aforementioned blockbusters in such a way to result in total box office revenues that remind the industry of more lucrative pre-pandemic times. Please keep an eye out for our November Insights for a detailed analysis into this very matter.

Increasing TV Content Budgets: Justified…or Inflated?

The COVID-19 pandemic and subsequent absence of theatrical entertainment resulted in many streaming services pushing their original content budgets to all-time highs in order to accommodate peak home viewing demand and increasing competition. Comcast, Disney and Netflix led the charge that saw budgets surpass US$220b in 2021, with many analysts expecting that value to exceed US$230b in 2022.

As it pertains specifically to the budgets of episodic television series, more and more shows have now joined what was once an exclusive “double digit million” per episode club. This became slightly more normalized via the success of the final few seasons of HBO’s iconic fantasy series GAME OF THRONES, which had budgets that ranged from US$10m to US$15m per episode. Other more recent examples of this include the newest seasons of THE WITCHER and THE CROWN from Netflix, THE MORNING SHOW and SEE from Apple TV+, THE BOYS and THE WHEEL OF TIME from Amazon Prime Video, and WESTWORLD from HBO.

This past summer’s fourth season of STRANGER THINGS, the freshly premiered HOUSE OF THE DRAGON and next month’s THE LORD OF THE RINGS: THE RINGS OF POWER all represent further instances of streamers being more than willing to push budgetary boundaries. Netflix’s groundbreaking science fiction series jumped to an average budget of US$30m per episode, while HBO’s GAME OF THRONES prequel saw an increase in its per episode budget to a reported US$20m. As for Amazon’s 2017’s US$250m rights acquisition, the tech giant remains in a league completely of its own, as the upcoming fantasy series will reportedly cost upwards of a whopping US$60m per episode and total over US$1b over the five seasons of planned production.

Disney of course has also been no stranger to record levels of spending on their new original content. Marvel’s continued expansion in their Phase Four slate has garnered a commitment towards content created specifically for the Disney+ streaming service. Since the beginning of 2021, there have been 8 shows that have premiered on the service with connections to the Marvel Cinematic Universe (MCU).  WANDAVISION, THE FALCON AND THE WINTER SOLDIER, LOKI, HAWKEYE and MOON KNIGHT were apparently the most expensive of these productions, all reportedly boasting budgets of US$25m per episode.

Disney’s Dominance

As of late, it is sometimes easy to forget that the MCU is not the only globally consumed cinematic universe that Disney benefits from. The STAR WARS franchise has also provided the company with endless IP and a built in fanbase to create content for on their streaming service. Since the late 2019 success of THE MANDALORIAN, the streamer has released two additional live-action spin-off series: THE BOOK OF BOBA FETT and OBI-WAN KENOBI. While the latter series just recently culminated in June of this year, fans will not have to wait long for more related content, as the upcoming ROGUE ONE prequel series ANDOR is set to premiere late next month. Disney seems to have a set formula when it comes to these storylines, as all four of these shows have reported per episode budgets of US$15m.

With all of the major streamers seemingly becoming more and more willing to allocate the equivalent of feature film budgets to each individual episode of an episodic series, we at Cinelytic decided to provide some brief data that may help our readers better understand whether or not this rapid increase in TV content spending has been justified. We chose to evaluate and compare the streaming performance of the most expensive shows that have been on air since the onset of the pandemic using our proprietary OTT demand data. This data captures 125m daily P2P transactions globally for a yearly total of 35b transactions. For this exercise, we ranked each show against the Top 10 series in release throughout the duration of each subject’s most recent season by their “strongest week” of consumption across global P2P:

As shown in the table above, all but one of the eight Disney+ original series with reported per episode budgets of at least US$15m dominated their respective competitive sets during their most recent seasons and captured the most market share, with HAWKEYE being the only high performing title that didn’t end up in first place. In fact, while being the worst performing of the Disney+ series, HAWKEYE still managed to capture more market share than seven of the nine other highlighted shows from competing streaming platforms. HBO’s final season of GAME OF THRONES and Netflix’s most recent installment of STRANGER THINGS were the only titles that captured more market share than any of the MCU or STAR WARS spin-offs.

As for the remaining titles, both of Amazon Prime Video’s current high budget endeavors, Apple TV+’s SEE, HBO’s WESTWORLD and Netflix’s THE WITCHER all managed to crack the Top 10, while THE MORNING SHOW and THE CROWN were the worst performing titles and failed to capture any of the top performer market share.

What Does This Mean For Subscribers?

The continued success of STRANGER THINGS helped ensure Netflix’s claim as the king of streaming with an end of Q2 reported global paid subscriber count of 220.7m, while Disney+ ended fiscal Q3 with 152.1m overall streaming subscribers, experiencing an impressive addition of 14.4m subs. HBO, HBOMax and Discovery+ as a combined services manages 92.1m subscribers as of Q2 2022, up 1.7m from the previous quarter. Amazon Prime Video and Apple TV+ have yet to release any verified information regarding subscriber growth in 2022.

On the surface, three of these streaming platforms represent two differing approaches as it pertains to assigning record breaking budgets to their original content. Netflix has long been seen as the company most willing to spend whatever it takes to provide a giant library of large-scale popular films and series. On the other hand, HBOMax and Disney+ seem to focus their highest levels of spending on shows related to established IP that they know viewers are hungry for, i.e. GAME OF THRONES, STAR WARS and the MCU. While HBOMax has once again found success with this methodology as the HOUSE OF THE DRAGON debut became the largest original series premiere in the streamer’s history, it has become increasingly evident that Disney+ has a lot more of this type of proven content at its disposal.

As for the big tech companies, Amazon Prime Video has seemingly fared better on its big budget shows with less reported spending than Apple TV+. Now, in an attempt to truly compete with the likes of Disney, HBO and Netflix, Amazon is taking a massive swing with THE LORD OF THE RINGS and a per episode budget of US$60m that is stratospherically higher than other streamers. That being said, the tech giant has more money to spare than almost all of its competitors, and we will have to wait until next month to see if the endeavor proves to be worth it.

1H 2021 v. 1H 2022 – What A Difference A Year Makes

For the July blog, we decided to take a look at VOD performance for the 1st half of 2022 and compare it against the 2nd half of 2021 using our P2P tracking technology to understand how VOD patterns and performance have shifted over the past year.  What has changed and what can we learn about VOD viewership in 2022.  We know from recent hit performances that consumers are back in cinema and enjoying a very strong Summer theatrical season.  MINIONS: THE RISE OF GRU has grossed US$640m of worldwide box office, THOR LOVE AND THUNDER is close to US$600m, JURASSIC WORLD DOMINION is just over US$920m and TOP GUN: MAVERICK has achieved US$1.3b of worldwide box office.

Some Things Have Changed, Others Have Stayed The Same

We first focused on the Top 20 performing film titles for 1H 2022 using our proprietary P2P technology data that tracks 125m transactions per day agglomerating up to 35b transactions annually from P2P sites worldwide and compared it to 2H 2021 titles release.

Below is the market share that each title represented of the Top 20 titles ranked by P2P transactions for the 1H of 2022:

THE BATMAN jumped ahead of its rivals with a strong showing for the year, along with SPIDER-MAN: NO WAY HOME and DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS.  All three had exclusive theatrical windows, 45 days for the caped crusader and Doctor Strange, and approximately 90 days for the webslinger.  Looking below at 2H of 2021 shows a bit of a different narrative.

For 2021, the December day-and-date release of THE MATRIX RESURRECTIONS topped the chart while BLACK WIDOW’S day-and-date release in May came in second.  

For the 1H of 2022 the Top 10 titles represented 61.9% of the Top 20’s performance, whereas 2021’s Top 10 represented 63.5%.  Thus, we do not see much of a change in terms of how titles performed from year to year.  Additionally, from a box office perspective, DBO for the 1H 2022 Top 10 approached US$2.3b.  For 2H 2021, the Top 10 garnered DBO of US$1.4b.  Thus, a material upswing in box office performance.  Furthermore, for 1H 2022, 8 of the Top 10 films released in over 4,100 theaters, while in 2H 2021, 7 of the Top 10 released in the same number of theaters.  All to say there was capacity for films to perform.

Thus, we see improved box office performance from films releasing in similar theaters with approximate VOD performance by market share.  What then has changed?

It’s All About The Window 

The big difference between 2022 and 2021 is the theatrical window and where it sits today.  We took approximately 15 titles from the Top 10 VOD releases for each six month time period and plotted their 1st seven days of performance grouped by release window (0-21 days, 45 days, 55-90 days).  Outlined below are the results for 1H 2022:

The data shows that for the titles outlined, the best window of performance for the 1st seven days of release on VOD is a 45 window.  It allows for titles to achieve their best revenue results in all its various media.  The next visualization outlines performance for 2H of 2021:

What we find is that during that period of consumption, when some titles released day-and-date and others pushed for a more traditional theatrical window, titles that released day-and-date performed best over their 1st seven days of VOD release.  The box office data would show that many of the day-and-date titles did not perform well in theaters. The day-and-date strategy was strong for growing subscriber bases of VOD platforms, but it did not allow for films to gross maximum revenue via all forms of media.

So…Who Wins in the End?

Consumers are benefiting from movies being back in theaters with shortened windows on VOD.  As we mentioned above, a 45 day window has allowed for feature films to achieve their best results in both theaters and on streaming.  In looking at distributors, Walt Disney Studios has continued to dominate in 2022, but many of its competitors are getting a chance to showcase improved performance:

Sony Pictures has seen the most noticeable jump since 2H 2021, with the VOD releases of SPIDER-MAN: NO WAY HOME, MORBIUS, UNCHARTED and GHOSTBUSTERS: AFTERLIFE.  Paramount Pictures sits at #4 with THE LOST CITY and SONIC THE HEDGEHOG 2, and should see another sizable bump in later quarters with the streaming release of TOP GUN: MAVERICK.

In comparison to 2H 2021, the telling story is about Warner Bros. Pictures and what occurred once windows shifted back from day-and-date to initial and exclusive theatrical windows.  Only THE BATMAN and FANTASTIC BEASTS: THE SECRETS OF DUMBLEDORE helped it retain a spot in the Top 10 in 2022.

Conclusion – Here’s What We Learned

Audiences have been heading back to theaters in significant numbers since the final quarter of 2021 and we hope to see the same trend continue as Summer comes to a close and we approach Fall.  Exciting titles lie ahead including BULLET TRAIN, BLACK ADAM, BLACK PANTHER: WAKANDA FOREVER and AVATAR: THE WAY OF WATER.  We still believe that every three months the distribution paradigm changes, meaning that what we see today could very well alter by October.  Based on the data we have outlined, we see that a 45 day exclusive theatrical window is sufficient for feature films to find success in theaters and perform well in other media.  Major theatrical titles no longer need a 90 day theatrical window in order to maximize revenue.

The summer animated release slate: Getting famlies back to the theater

Last month, Cinelytic Insights dove into the first true “Summer Blockbuster” season since 2019. We ran projections on the four most high-profile live action films being released between May and July and discussed how the studios behind them were poised to capitalize on perfect timing to help precipitate a return to theatrical viewing that was catalyzed by SPIDERMAN-MAN: NO WAY HOME and THE BATMAN. Since our last Insights, three of our analyzed titles (DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS, TOP GUN: MAVERICK and JURASSIC WORLD DOMINION) have been released to considerable and worldwide box-office success, respectively earning US$932.5m, US$763.1m and US$420.0m to date.

While teenagers and adults have been more than willing to return to cinemas to view these blockbusters in person, G/PG rated family films have found it difficult to garner comparable attention since the end of 2021. Despite the COVID-19 pandemic being pushed further and further into the world’s rear view, many parents have remained understandably selective in what films they chose to take their kids to, a fear that is of course remedied by the seemingly endless selection of family-friendly content available at home. In fact, no family-oriented title released after 2019 has grossed more than US$200m at the domestic box office.

However, just this last April, we saw back-to-back releases of two animated features that exceeded many expectations and resulted in substantial returns for two major studios. Paramount’s SONIC THE HEDGEHOG 2 came close to the aforementioned threshold with US$190.1m domestic and US$397.9m worldwide to date. Just a couple of weeks after that, Universal’s animated heist comedy THE BAD GUYS released to US$92.6 domestic and US$229.9m worldwide. The success of these PG titles is a potential signal that upcoming releases like Pixar’s LIGHTYEAR, Universal’s MINIONS: THE RISE OF GRU and Warner Brothers’ DC LEAGUE OF SUPER-PETS will represent the first true family friendly theatrical releases that achieve the pre-pandemic box office numbers that were previously expected for animated features of this scale.

Blockbusters: Will animation rebound like live action?

In order to support that claim, we at Cinelytic analyzed the three notable and upcoming animated titles looking to capitalize on the momentum induced by live action blockbusters over the past six months. We highlighted the June 17^th release of Walt Disney Studios and Pixar’s latest addition to the TOY STORY franchise, LIGHTYEAR, to showcase what the summer of 2022 may have in store for the family friendly film market. Utilizing an estimated budget of US$200m, global P&A costs totaling an additional US$220m, and 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$225m and IBO of US$313m in the base case median scenario. In addition, the Cinelytic platform is capable of predicting Home Video and TV revenue ultimately based on real data:

Based on the anticipated global net revenues (including 10 year “ultimates” that encompass BO, HE, and TV net of distribution fees and expenses), the film is projected to result in a highly respectable return for the studio, with an ROI of 161.5% before the talent back-end, which can be very substantial. However, to make sense of this forecast, one needs to understand the same analyses for the other comparable titles to be released in the following month: MINIONS: THE RISE OF GRU and DC LEAGUE OF SUPER-PETS. The table below outlines the results output by the Cinelytic platform:

As shown above, the two additional titles are also projected to result in impressive returns, and all three titles showcase an average ROI of 393.5%. LIGHTYEAR’s reported budget of US$200m is the highest in this comp set. This clearly plays a role in its lower projected return, along with the realization that the title is considered a spinoff and not a direct sequel in the franchise, and thus may not reap the same benefits of other TOY STORY films. Warner Brothers’ DC LEAGUE OF SUPER-PETS is projected to result in similar returns with a projected ROI of 256.9%. Based on the DC Comics superhero team the “Legion of Super-Pets”, this film does not have the luxury of being directly associated with an already established brand or fan base like its two competitors. That being said, it is being helmed by veteran animation writer Jared Stern (THE LEGO BATMAN MOVIE, THE LEGO NINJAGO MOVIE) and boasts a voice cast that is arguably the most prestigious of these three titles, including lead performances by Dwayne Johnson and Kevin Hart and support from Jon Krasinski and Keanu Reeves, among others.

The outlier is clearly Universal’s MINIONS: THE RISE OF GRU, which looks by far to be the most lucrative venture among these titles and boasts a 663.8% ROI projection. This figure is understandable when one looks into the past releases of the DESPICABLE ME cinematic universe. The four titles in that franchise have averaged US$74.8m in budget and US$927m in global box office performance.

A lucrative summer continues

The resurgence of live-action films in movie theaters has proved that difficult times once again lent themselves to a desire from consumers to escape. Obviously, the last people who were going to be granted that opportunity in the aftermath of the pandemic were always going to be children, as parents have been justifiably hesitant to expose their families to any unnecessary risks. However, the accomplishments of the numerous live-action blockbuster films that have released since November of last year, coupled with the success of two family oriented titles that opened just two months ago, demonstrate that major studios are likely warranted in their confidence in full theatrical release strategies for their major animated projects.

Looking at the Top 20 films in regard to global box office performance in each of the three years preceding the onset of the COVID-19 crisis (2017-2019), it’s clear that animation has played a pivotal role in this industry and has often showcased some of the most impressive returns. Of these 60 films, 16 are G/PG rated titles with animated elements catering to young children and families. The average budget amongst these films was roughly US$160m, while the average worldwide box office gross was about US$847m. Furthermore, 7 of these same animated features surpassed the coveted global box office threshold of US$1b. The other 44 films on this list averaged a higher budget of US$176m and lower global box office of US$827m. This is all to say that major studios may once again and soon have the ability to attach the “blockbuster” label to the animated genre, representing yet another step forward for the film industry in its quest to ensure the survival of the movie theater business.

The “Summer Blockbuster” season: Poised for a comeback

The term “Summer Blockbuster” was coined between the mid-1970’s and mid-1980’s when Steven Spielberg and his friend George Lucas introduced the world to timeless films such as JAWS, STAR WARS, RAIDERS OF THE LOST ARC and E.T. In the modern era, it has become common practice for audiences to expect the most high-profile releases of the year to take place during what is now the regular summer movie season, which runs from May through early September. This season regularly produces over US$4b in revenue and accounts for about 40% of the year’s total grosses. In 2020, with the world experiencing aggressive shutdowns due to a crippling pandemic, summer earnings totaled less than US$180m, a figure that improved to only US$1.9b in 2021.

While the immense success of SPIDER-MAN: NO WAY HOME was seen as a welcome lifeline for a drowning industry, studio executives and analysts were cautiously aware that one blockbuster triumph wouldn’t be enough to remedy a 2-year run of negative headlines and financial losses. Fortunately, just over two months later, THE BATMAN served as Warner Brothers’ first exclusive theatrical release in over a year and the first runaway success at the box office in 2022, representing a potential turning point for the industry and a much-needed confidence boost for major movie studios.

Will this momentum carry into the summer?

Major studios are anxiously hoping to realize the types of financial returns that have escaped them for the past two years and that they had previously grown accustomed to during past summer seasons. We at Cinelytic analyzed the four blockbuster titles looking to capitalize on the upcoming season and forecasted them on our platform, highlighting Walt Disney Studios’ latest addition to the Marvel Cinematic Universe, DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS, to showcase what the summer of 2022 may have in store. Utilizing an estimated budget of US$200m, global P&A costs totaling an additional US$200m, and 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$390 and IBO of US$485m in the base case median scenario. In addition, the Cinelytic platform is capable of predicting Home Video and TV revenue ultimately based on real data:

Based on the anticipated global net revenues (including BO, HE, TV net of distribution fees and expenses), the film is projected to result in a substantial return for the studio, with a projected ROI of 210.4% before the talent back-end, which can be substantial. However, to make sense of this forecast, one needs to understand the same analyses for the three other comparable titles soon to appear in the market.  Is this high ROI indicative of what to expect for the major releases over the next three months? To try and help answer this question, we used the Cinelytic platform to also run projections for TOP GUN: MAVERICK, JURASSIC WORLD DOMINION, and THOR: LOVE AND THUNDER, all of which will also be made available to moviegoers between May and July. The table below outlines the results output by the Cinelytic platform:

As shown above, the three additional titles are projected to result in impressive returns, and all four titles showcase an average ROI of 208.4%. While still displaying impressive figures, the outlier in this group is undoubtedly TOP GUN: MAVERICK, which showcases a projected ROI of 114.4% before talent back-end. Unlike the other three titles, this nostalgia targeting sequel is not part of a powerful cinematic universe that has proven itself in recent years with dominating box office triumphs. Between them, the Marvel Cinematic Universe and Jurassic Park franchise have produced 12 titles since 2008 that have surpassed US$1b of worldwide box office, the vast majority of which of course being attributed to Marvel.

While the original TOP GUN film was a phenomenon when released by Paramount Pictures in 1986, today’s younger audience may not feel the same desire as the older demographic to revisit its storyline and characters. Despite this, Tom Cruise has proven that he can still be a bankable star when tied to a franchise that he has already put his stamp on. The ongoing MISSION: IMPOSSIBLE film series has been revitalized over the last decade, with its last three releases totaling roughly US$2.2b in worldwide box office gross. Through the combination of his involvement in the sequel and other marketable factors like the groundbreaking IMAX techniques being used for flight sequences, TOP GUN: MAVERICK may have a chance to collect its fair share of ticket sales from the resurgence of the summer movie season.

Blockbusters at home

As highlighted in last month’s Insights, mastering a release strategy is the most important lever for a studio to fully realize the potential of its content, and Cinelytic’s proprietary OTT demand data indicates that a 45-day theatrical window may be the optimal choice for high budget tentpole titles as it pertains to streaming. Walt Disney Studios has given no formal indication as to what theatrical window they will apply to DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS and THOR: LOVE AND THUNDER. The studio has been flexible and operating on a case-by-case basis, and a number of their major titles since the summer of 2021 have had theatrical windows that varied between roughly 45 and 80 days. Universal Pictures also seems hesitant to officially commit to a 45-day window for its upcoming and high-profile projects. The studio recently struck a new licensing agreement with Peacock for their 2022 slate that will see several titles like the romantic comedy TICKETS TO PARADISE, the latest Blumhouse horror film THE BLACK PHONE, and DOWNTON ABBEY: A NEW ERA made available exclusively on Peacock as early as 45-days after theatrical release. Despite this, as of now, major tentpoles such as JURASSIC WORLD: DOMINION, MINIONS: THE RISE OF GRU and Christopher Nolan’s ensemble historical epic OPPENHEIMER are not expected to fall in the 45-day plan.

On the other hand, Paramount Pictures has been more consistent as it pertains to their strategy. Recent and exclusive theatrical runs for SCREAM, JACKASS FOREVER and SONIC THE HEDGEHOG 2 were all pegged to be made available on Paramount+ 45 days after their original release dates. As Cinelytic continues to track streaming performance for major blockbuster films, it will be interesting to examine how each studio’s windowing decision affects the ability to strike the best balance between ticket sales and a title’s subsequent performance amongst other home viewing options. This will be particularly interesting for the three studios emphasized in this analysis that own streaming services and understandably must prioritize maximizing subscriptions.

A welcome return

The last two years have provided few means of enjoyment and escape from a seemingly constant barrage of negative news around the world. During this same time frame, movie studios were forced to sideline most of their largest spectacle titles. However, as the world edges closer and closer to a sense of normality, as altered as it may be, summer movies are capable of once again providing such an escape and an excuse to spend a couple of hours being transported into another world. As proven by a pair of recent superhero releases that have boasted ticket sales on par with and exceeding many historical blockbuster success stories, audiences are more than willing to make “a night at the movies” part of their lives again. As such, the summer of 2022 presents a highly lucrative opportunity for three major studios to capitalize on being at the right place at the right time in regard to their upcoming slate.

Spider-Man, Batman, and the importance of theatrical windows

Traditional 90-day theatrical windows were common practice in the movie industry for decades, with exhibitors blocking any attempts to adapt to models that may be more friendly to modern consumers accustomed to the world of streaming. The global pandemic was a game changer – the movie industry had to maneuver around theaters being closed or restricted for what seemed to be countless months. During this time, audiences became more and more accustomed to consuming film content from the comfort of their own homes via a variety of OTT platforms. As a result of this, the latter half of the pandemic saw studios and distributors testing a variety of distribution strategies to maximize the number of consumers who viewed their products.  

Warner Brothers, for example, was the first major studio to publicly commit to a “Day-and-Date” strategy and utilize their HBOMax service as a simultaneous viewing platform for a number of their most high-profile theatrical releases in 2021. Many traditionalists protested this approach, yet this is the type of adaptation that has allowed industry to test and determine which methodologies work best to maximize revenue streams. Straight to streaming, Day-and-Date, and shrunken theatrical windows ranging from 17 to 45 days all became viable methods for different types of films.

Cinelytic was at the forefront of this movement and began analyzing windowing strategies using our intelligence platform and proprietary OTT data. Based on the information gathered, we advocated that the industry was justified in considering a 45-day theatrical window for major releases, and alternatively should consider being flexible when deciding between Day-and-Date and straight to streaming for smaller scale titles.

Since COVID restrictions began lifting at a faster pace in Q4 2021, audiences have twice proven in a brief period of time that they are willing to return to cinemas in significant numbers if the scale and experience of the film is large enough. The proof of this came in the form of two major and long anticipated releases over the last five months: SPIDER-MAN: NO WAY HOME and THE BATMAN.

To date, the latest adventure for the web slinger has grossed US$804.3m domestically and US$1.9b worldwide, making it the highest grossing film of 2021, the sixth highest-grossing film of all time, and the highest-grossing film released by Sony Pictures. As for the caped crusader, Robert Pattinson’s take on the iconic character has grossed US$367.7m domestically and US$754.3m worldwide for Warner Brothers, making it the highest-grossing film of 2022.

Both of these titles were released following differing strategies, with SPIDER-MAN: NO WAY HOME deploying a traditional 90-day theatrical window, and THE BATMAN settling on the shrunken 45-day window that is being teased as a potential new industry standard.

Success on streaming: Which window is best?

To evaluate and compare the streaming performance of these two box office success stories, we used our proprietary OTT demand data. This data captures 125m daily P2P transactions globally for a yearly total of 35b transactions. For this exercise, we utilized this data to compare the first seven days of streaming performance for both titles:

SPIDER-MAN: NO WAY HOME clearly outperformed THE BATMAN at the box office, however our OTT data demonstrates that the opposite may be concluded when it comes to both titles’ initial runs on home viewing. As shown in the graph above, SPIDER-MAN: NO WAY HOME did reach an impressive peak of just under 23% of the market share amongst all competing OTT options on its second day. THE BATMAN, on the other hand, opened to over 30%, and both titles began to plateau between 18 – 19% on the third day.

The two tables above highlight overall OTT viewing amongst the Top 10 performing titles in each film’s respective first week of streaming. As presented, THE BATMAN’s total viewing numbers and share of the viewing market was higher than that of its main competitor. This triumph becomes even more impressive when one compares the other top titles each of these films was contending with throughout their initial runs. Other than THE ADAM PROJECT, which is now reported as being the fifth most watched film on Netflix, the other top viewed films SPIDER-MAN: NO WAY HOME was up against with during its first week of streaming availability were either of a lower profile (DOG, BLACKLIGHT, CYRANO, TURNING RED) or dated (THE MATRIX RESURRECTIONS, THE KING’S MAN, GHOSTBUSTERS: AFTERLIFE). THE BATMAN was able to retain the dominance exhibited in the graph above despite sharing streaming space with more recent and high-profile crowd pleasers like MOONFALL, X, THE OUTFIT, JACKASS FOREVER and DEATH ON THE NILE. This data normalizes VOD vs SVOD release types and expresses pure consumer demand for a title without platform bias. Therefore, this accomplishment on streaming by THE BATMAN can be clearly interpreted as a consumer vote or the 45-day window. As seen when analyzing this data with numerous titles in the past, this shrunken window strikes an effective balance for a title to both maximize box office performance and remain in the consumer zeitgeist so that a large number of consumers will be eager to watch the film once it is made available at home, whether it be for the first time or a re-watch.

Sony Pictures: The outlier

Sony Pictures, which has vowed to protect theatrical exclusivity, is the only major Hollywood studio that does not offer an accompanying streaming service. Instead, in 2021 it committed to a multiyear and exclusive first pay licensing deal with Netflix. For this reason, the decision to maximize the amount of time their tentpole films spend in theaters is justifiable. The 45-day theatrical window is especially crucial for all the other major studios in the industry that own their own streaming services and want to maximize their subscriber base. Executed upon in just the last two years, the plan by Warner Brothers / HBOMax to shift from Day-and-Date to a 45-day window strategy for their major titles has been a clear success in that regard, as the service gained 3 million subscribers in Q1 2022. By making high profile releases available early, HBOMax placed increased pressure on “streaming only” players like Netflix, which as was widely reported lost 200,000 subscribers in that same time period, with significantly more losses projected in the upcoming quarter.

All this is to say that windowing matters. Cinelytic is confident in our original conclusion that a 45-day theatrical window is most effective for large tentpole releases, and studios should be slightly more flexible with even shorter windows, Day-and-Date or straight to streaming when it comes to lower or medium budget films. “Content is King” is an often-cited quote in the film industry, and while the quality of a film library will always ultimately determine the long-term success of a studio or streaming platform, mastering a release strategy is the most important lever to maximize the potential of that content.

Does a Best Picture Nomination Mean Anything To OTT?

With the February 8th announcement of the 10 Best Picture nominees at the Oscars, it became immediately clear that the October day-and-date release of the sci-fi epic DUNE was the only title amongst the selection that garnered significant attention in movie theaters, with a domestic cume of US$108m. No other Best Picture nominee has come close to approaching even half that figure, with the second-highest grosser, WEST SIDE STORY, generating US$38m domestically.

However, box office does not necessarily drive Oscar votes.  It has been quite some time since a true box office performer won Best Picture at the Oscars. In the five years preceding the start of the pandemic in 2020, consider the middle tier box office performers that took home the same top prize: SPOTLIGHT, MOONLIGHT, THE SHAPE OF WATER, GREEN BOOK and PARASITE. These five titles averaged US$55m in domestic box office, beating out the likes of THE MARTIAN, LA LA LAND, DUNKIRK, BLACK PANTHER and 1917, all of which grossed well over US$100m domestic.

What about streaming?

While box office triumphs may not translate to success on awards night, a Best Picture Oscar nomination does in many cases effectively attract new streaming viewers to a previously released title. Even as the pandemic continues to wind down, its aftereffects give streamers an advantage since many moviegoers would still rather watch “Award titles” at home as opposed to a crowded theater. In fact, three out of the 10 Best Picture nominees did not report theatrical grosses because streaming was their primary method of distribution (CODA, THE POWER OF THE DOG and DON’T LOOK UP).

According to Netflix, after THE POWER OF THE DOG was named as having the most Oscar nominations this year with twelve, the title made a return to Netflix’s Top 10 most watched films for the week that followed. Additionally, the star-studded political satire DON’T LOOK UP, which earned four Oscar nominations, remained in the Netflix Top 10 for the eighth straight week since debuting in late December. It now ranks as the 2^nd most watched film in the streamer’s history for most hours watched, surpassed only by the Dwayne Johnson, Gal Gadot and Ryan Reynolds led action movie RED NOTICE.

To understand the full picture of streaming performance of all the Best Picture nominees, we used our proprietary OTT Demand Data to analyze the 10 films campaigning for Best Picture: BELFAST, CODA, DON’T LOOK UP, DRIVE MY CAR, DUNE, KING RICHARD, LICORICE PIZZA, NIGHTMARE ALLEY, THE POWER OF THE DOG, WESTSIDE STORY. This data captures 125m daily P2P transactions for a yearly total of 35b transactions, and the best metric pulled from this information is the representative market share a title holds against all titles in release.

In our first set of analyses, we took the month following the announcement of the nominations and ranked how these particular films competed against all films in release and found that LICORICE PIZZA, DUNE, NIGHTMARE ALLEY and WESTSIDE STORY set themselves apart from the remaining six Oscar hopefuls as the only Best Picture nominees to break into the Top 20.

Furthermore, when compared against the 10 Best Picture nominees, these same four titles generated a median market share percentage of 15.3% for the chosen date range.  The same metric for the balance of the six titles was materially lower at 6.5%.

To fully understand the demand landscape for these titles, not only have we looked at how nominations impacted demand, but also reviewed the 1^st seven days of P2P consumption for each title from their first day of OTT release.

The graph above allows us to view four distinct groups. Denis Villeneuve’s long-awaited adaptation of DUNE is expectedly in a league of its own as a mass appealing blockbuster in the truest sense of the word, flaunting a US$165m budget, star studded cast, and source IP with an already established fanbase.

In the next grouping, we see NIGHTMARE ALLEY, WESTSIDE STORY, LICORICE PIZZA, DON’T LOOK UP, and KING RICHARD. All five of these titles similarly boast a mix of offerings that appeal to mass audiences, whether it be cast (Will Smith, Leonardo DiCaprio, Jennifer Lawrence, Meryl Streep, Bradley Cooper), director (Steven Spielberg, Guillermo Del Toro, Paul Thomas Anderson, Adam McKay), and in the case of WESTSIDE STORY, the added boost of renowned source IP.

Next, we have THE POWER OF THE DOG and CODA, both of which were released with almost a complete focus on streaming. These prestige dramas are more subtle, moving, and intellectual in comparison to their more commercial peers, and it’s no surprise that they haven’t garnered the same home viewing attention that many of the other nominees have. Finally, we have DRIVE MY CAR and BELFAST. Both titles feature foreign casts and highlight stories unique to the countries from which they hail (Japan and Ireland), and thus will find more success in home viewing overseas.

What does this all mean?

As stated above, box office success does not necessarily translate to a golden statuette on Oscar night.  What we do see is that marketing attention surrounding Oscar titles does impact home viewership.  This year, nomination announcements aided at least four of the films vying for Best Picture increase their home viewing reach.  Additionally, by reviewing the 1st seven days consumption performance of each nominee we can understand how budget, IP, cast and platform all contribute to a title’s streaming success.  In this case, a top IP title with a material budget and cast that is released on a sophisticated platform truly reached its intended target.  We can also see how middle tier budget titles performed to middle tier consumption.  Looking at the smaller indie fare with compelling stories and execution, it’s evident that both releases played similarly on important streaming platforms.  Lastly, those with smaller recognition and a focus on foreign stories had more limited exposure and could have benefited from a release on larger platforms. Most importantly, we have a way to bring all this data together to you the user with an API.  Connect via the link below to learn more about you can benefit and stay ahead of the game.       

Of the 50 highest grossing films in cinema history as it relates to the domestic box office (not adjusted for inflation), only 10 are based on original IP. This is not so much suggestive of what original films can accomplish, but serves as a telling reminder that the road to success is one fraught with global juggernauts boasting established and loyal fanbases, cinematic universes, and proven concepts.

Filmmakers who attach themselves to these universes are rewarded with an enhanced reputation due to their work on such a recognizable brand, but their creativity can also be limited as a result. For writers or directors who are not accustomed to servicing someone else’s vision, this may be challenging, as the pursuit of truly original work often results in less confidence and support from studios and financiers.

As the table below shows, 2021 displayed a pattern that resembled historical figures, with only two truly original films breaking into the Top 20 in the form of Walt Disney Studios’ FREE GUY and ENCANTO:

Domestic box office revenue rose to US$4.5b in 2021 as the theatrical business struggled to recover from the COVID-19 crisis. While that was up more than 101% in comparison to 2020, it still significantly trails pre-pandemic levels and was 60% behind 2019.

While 2021 certainly appeared to lack strong original content released theatrically, that pattern may seemingly change upon analysis of the 2022 release calendar. We at Cinelytic picked some of the most anticipated original titles and forecasted them on our platform, highlighting Focus Features’ upcoming April 22^nd release of THE NORTHMAN to showcase what original IP has in in store for 2022.  Utilizing the reported budget of US$60m, global P&A costs totaling an additional US$50m, and 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$44.2m and IBO of US$32.5m in the base case median scenario. In addition, the Cinelytic platform is capable of predicting Home Video and TV revenue ultimately based on real data:

Based on the anticipated global net revenues (including BO, HE, TV net of distribution fees and expenses), the film is projected to result in a small loss for the studio, which may be justifiable given the polarizing subject matter, arthouse style approach and historical performance of director Robert Eggers. However, to make sense of THE NORTHMAN’S projected ROI, one needs to understand the same analyses for other original titles soon to appear in the market.  Is the ROI indicative of what to expect for original IP, or do these titles have a chance to reach the vaunted returns of sequels, prequels and the like? Using the Cinelytic platform, we also ran projections for BULLET TRAIN, NOPE, THE MAN FROM TORONTO, CANTERBURY GLASS, and BABYLON. The table below outlines the results output by the Cinelytic platform:

As shown above, these five additional titles that were analyzed are all projected to result in respectable returns, and all six titles showcase an average ROI of 69.3%. Unlike THE NORTHMAN, four of these remaining films all boast star studded casts with established and bankable movie stars. BULLET TRAIN, which features Brad Pitt and Sandra Bullock, is forecasted to achieve the highest revenues, resulting in a total ROI of 59.8% that takes into account the US$90m production budget and global P&A expenses of US$100m. Meanwhile, Jordan Peele’s upcoming science-fiction horror endeavor NOPE, which has a relatively lower budget and the highest expected ROI of 205.5%, will likely cater to the largest overall audience due to title’s genre and Peele’s “must see” status as a director.

Do Originals Have Hope?

Younger audience members (namely males) between the ages of 18 and 34 deserve most of the credit for any theatrical resurgence, while those above the age of 35 have been more reluctant to return to cinemas. 2021’s continued focus on theatrical franchise releases was seemingly justified as the films that have youth appeal are indeed those that helped theaters weather the post-COVID storm.

Franchise titles are not going anywhere, and 2022 has over 20 titles with planned releases through December with characters and stories that will be all too familiar to moviegoers around the world. Some of these upcoming titles of course include THE BATMAN, MORBIUS, DOCTOR STRANGE IN THE MULTIVERSE OF MADNESS, TOP GUN: MAVERICK, JURASSIC WORLD: DOMINION, THOR: LOVE AND THUNDER, BLACK PANTHER 2, AQUAMAN AND THE LOST KINGDOM, and AVATAR 2.

However, there is a high probability that the more mature demographic will return to cinemas as COVID continues to retreat. In order for that to happen, the films targeting them as audience members must once again begin receiving attention amongst exhibitors, as opposed to being marked solely for straight to streaming releases. The projections summarized above, coupled with continuously declining COVID cases, seem to indicate that this resurgence of originality is possible and probable, but both filmmakers and the companies that back them will have to wait and see.

2021 – The Year of OTT

2021 was a turbulent year for feature films.  Studios/Distributors all took different approaches to varying degrees of success with their releases.  Some titles truly outperformed and won, others lost but many had varying degrees of success depending on which media a title was in release.  Domestic Box Office for the year reached US$4.4b while Digital Home Entertainment (including TV series) is estimated to reach US$28b for 2021.  Thus, while the theatrical business continues to recover, audiences overwhelmingly prefer screening product at home.

We took a deep dive into 2021 OTT viewing by using our proprietary P2P data platform.  The system captures 125m transactions per day across the world to agglomerate to an annual tally of 35b.  From this we are able to parse out consumption by territory, time period and title for any feature film or TV series.  In this case, we took the strongest week of playability in 2021 by title to see how titles performed by Studio/Distributor.  Evaluating top five title market share allows one to compare all titles by eliminating seasonality bias as well as the effect of theater closures. 

As the above graphic illustrates, known IP, franchises and sequels drove performance for the top titles of any Distributor.  Some Distributors took hybrid approaches to their release while others released exclusively in theaters before releasing on OTT.  In the end, both release types played well for OTT viewing.  However, as we seen throughout 2021, the same cannot be said for Box Office.

Oscar Race Kicks Off in November: HOUSE OF GUCCI’s theatrical release places it in direct competition with five competing fact-based dramas with OTT releases in the same month.

Oscar season is the time between late-fall and early-winter in which Hollywood studios release or promote the films they consider most likely to be critically acclaimed in the hopes of winning big at the Academy Awards. When it comes to genres that usually fare well, the Academy voters’ love of biopics extends to Hollywood’s early days. In keeping with this theme, early indications point to this year’s Oscar race being heavy with biopics and films based on true stories.

On November 24^th, possibly the most high-profile and consistently hyped biopic of 2021 was finally released: Ridley Scott’s outrageous real-life story of crime and passion surrounding an Italian fashion dynasty – HOUSE OF GUCCI. Throughout the same month, five other well reviewed titles hoping to stake their own claims for a gold statue were also all made available to viewers via OTT services: SPENCER, THE EYES OF TAMMY FAYE, KING RICHARD, TICK, TICK…BOOM! and THE LAST DUEL. We took a deep dive into all these releases using both our Cinelytic intelligence platform to forecast a traditional release model and our proprietary P2P data to understand consumer demand at home throughout the month of November.

A CLASSIC THEATRICAL WINDOW: HOUSE OF GUCCI

Boasting a budget of US$75m and a talent pool that encompasses both established and new age Hollywood royalty, this glamorous assessment of the Florentine house’s disturbing history made its way to theaters around the world just before the Thanksgiving holiday.  The film will remain exclusively available in theaters until its release on Paramount+ on a yet to be disclosed date. Opening weekend numbers were highly impressive in the post-pandemic environment for MGM. The film took US$14.2m over three days and US$21.8m over five days, equating to the best opening weekend for a drama for two years and achieving a feat not realized at the box office by a drama movie since the success of LITTLE WOMEN in December of 2019. To date, the film has grossed DBO of over US$41.0m and IBO of roughly US$52.0m, with 45% of viewers being between the ages of 18 and 34, and 34% over the age of 45, a higher-than-average result for a drama film targeting an older audience during the COVID-19 pandemic.

We ran the film through our pre-pandemic predictive module utilizing a budget of US$75m, global P&A costs totaling an additional US$70m, and 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc. The resulting projections from the platform include DBO of US$56.2m and IBO of US$53.6m.  The film has yet to open in several international markets, with debuts in Australia, Japan and Korea occurring in 2022.  There is also the potential for upcoming and added domestic playability over the coming holidays.

What we see from the financial results is that depending on performance in other media, the film will suffer a loss or break-even. But is this the only possibility of performance. Looking at other media would help to see if the title can generate a profit.

COMPETITION FROM THE COUCH: STREAMING RELEASES GOING HEAD-TO-HEAD

To understand the full picture of how the title will do, we normally would look at its OTT performance to date.  Since HOUSE OF GUCCI’s streaming performance will not be measured until early in 2022, we decided to use our proprietary OTT Demand Data to analyze five  fact-based dramas that all competed with HOUSE OF GUCCI for November viewership and will be campaigning for many of the same Oscar categories. This data captures 125m daily P2P transactions for a yearly total of 35b transactions, and the best metric pulled from this information is the representative market share a title holds against all titles in release. 

In this case, we took the 1^st seven days of P2P consumption for SPENCER, THE EYES OF TAMMY FAYE, KING RICHARD, TICK, TICK…BOOM! and THE LAST DUEL:

SPENCER, THE EYES OF TAMMY FAYE and THE LAST DUEL were exclusively released in theaters with differing windows. KING RICHARD’s HBOMax release followed a day-and-date format, while TICK, TICK…BOOM! was directly released on Netflix. THE EYES OF TAMMY FAYE was the first of these titles to receive a digital release and was made available to “at home” viewers on November 2^nd. The remaining four titles were all released on OTT between November 19-29.

As shown in the graphic above, THE LAST DUEL is in a league of its own with a median market share percentage (7.5%) that nearly doubles the closest competition. Coming in 2^nd place with a median market share percentage of 3.9% is KING RICHARD, which follows a similar pattern to THE LAST DUEL in that it pops on Day 2 of its release and steadily declines afterwards. However, unlike KING RICHARD, THE LAST DUEL does see an additional rise on its 6^th day of streaming.

The remaining three titles all failed to reach even 4.0% of market share on any of their respective 1^st seven days. Both SPENCER and THE EYES OF TAMMY FAYE seemed to slow their declines beginning with Day 4, while TICK, TICK…BOOM! saw a consistent and more rapid descent after a slight Day 2 boost.

WHAT DID WE LEARN FROM NOVEMBER?

As it pertains to movies that took a chance on movie theaters, HOUSE OF GUCCI is far and away the highest performing drama film released since the COVID-19 pandemic. This comes less than tw0 months after Ridley Scott’s other theatrical endeavor of 2021, THE LAST DUEL. Boasting a US$100m budget, the film has grossed DBO of just under US$10.9m and IBO of roughly US$19.4m and was quickly labeled a box-office bomb for 20^th Century Studios. However, the analysis above makes it clear that the film has completely outshined any other November drama when it comes to streaming. Furthermore, while KING RICHARD’s performance was never on par with THE LAST DUEL, it was still able to similarly separate from the other three3 films and garner more impressive home viewing stats. Why?

With the advent of big concept blockbusters like “The Fast and the Furious” franchise or the Marvel Cinematic Universe, merely having a movie star has become less and less of a necessity for high viewership. However, there is an argument to be made that in the world of fact-based dramas, there is still merit in pursuing household names to headline a film. HOUSE OF GUCCI’s roster includes global music icon Lady Gaga in a potentially Oscar winning performance, perennial leading man Adam Driver, and award-winning veterans like Jared Leto and Al Pacino. While THE LAST DUEL has proven to be a failure in theaters, its similar inclusion of Adam Driver, this time going toe to toe with the likes of Matt Damon and Ben Affleck, has clearly been a driving force in its 2^nd life on streaming services. KING RICHARD also features what many publications are predicting as the current favorite pick for a “Best Actor” award and first career Oscar for blockbuster titan Will Smith.

Meanwhile, SPENCER, THE EYES OF TAMMY FAYE and TICK, TICK…BOOM! showcase highly regarded performances by Kristen Stewart, Jessica Chastain and Andrew Garfield. While all three of these names represent well respected artists who have received critical acclaim in everything ranging from indie dramas to summer blockbusters, none can be considered to be as well-known as the aforementioned cast members. The December 13^th announcement of potential winners at the 79^th Golden Globe Awards to be held early in 2022 saw all three of these lead performances garner nominations. Unfortunately, and unlike those in THE LAST DUEL and KING RICHARD, these stars did not shine bright enough to pull home viewers away from more popcorn friendly offerings in November.

CONCLUSION: GUCCI – TO BE OR NOT TO BE

In considering the platform P&L and ROI analysis we see a film that may generate a loss.  Yet having seen what other top talent can garner in strong OTT fare bodes well for HOUSE OF GUCCI in being able to hopefully outshine the “at home” results of THE LAST DUEL and KING RICHARD and break-even or generate a profit for the distributor and its investors.

Audiences win in November: Five Major Titles Release on OTT with a cumulative budget of almost $1b.  Which ones win?

The COVID-19 pandemic led to lockdowns and theater shutdowns that have forced film studios around the world to test different strategies as it relates to film releases. No longer will major blockbusters enjoy 90-day exclusive theatrical release windows prior to being made available at home, and what the industry has been seeing as an expected and unavoidable transition to a streaming-first mindset was significantly accelerated with the events that began taking place in 2020.

Three such methodologies that we’ve seen utilized include exclusive but shrunken theatrical release windows (followed by a streaming release), day-and-date releases, and straight to streaming releases.  Over the summer we saw this play out with BLACK WIDOW, JUNGLE CRUISE, F9, THE TOMORROW WAR and many others.  We wanted to see how these strategies would play out in November for varied release strategy titles including SHANG-CHI and NO TIME TO DIE (theatrical with subsequent OTT release) DUNE (D/D release) and FINCH and RED NOTICE (straight to streaming).  To best understand performance, we focused on a green light/P&L analysis of SHANG-CHI generated through the Cinelytic cloud based, predictive analytics platform.  To understand the full spectrum of performance, we used our proprietary OTT audience data for all five titles to see how they have done since release.

Theatrical to start…streaming to follow: The Shrunken Window

In November of 2019, Walt Disney Studios took a major gamble in the world of streaming with the unveiling of Disney+, which now has over 118 million subscribers worldwide as of fourth quarter of 2021. In addition, by making three of its top recent movies exclusively available on the streaming service (MULAN, SOUL, LUCA), followed by four day-and-date releases (RAYA, CRUELLA, BLACK WIDOW, JUNGLE CRUISE), the studio made it known that quick access to home viewing would be a key aspect of its release schedule for the foreseeable future.

However, with moviegoers slowly but surely returning to cinemas as we entered the 2^nd half of 2021, Disney has also been dabbling in shrunken 45-day theatrical release windows followed by availability on Disney+ for blockbusters like FREE GUY, SHANG-CHI and ETERNALS.

Using SHANG-CHI as an example given its recent debut on Disney+ on November 12^th (prior theatrical release on September 3^rd), we ran the film through our predictive module. The film’s opening weekend grossed over $75m million in the three-day weekend and $90m over the four-day holiday in the US, setting a new Labor Day holiday weekend record. To date, the film has grossed DBO of over US$224m and IBO of over US$206m.

Utilizing a budget of US$150m, global P&A costs totaling an additional US$200m, and 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc., the platform projects DBO of US$238.9m and IBO of US$280m.  The film has yet to open in China and domestically there is some playability over the coming holidays.

Based on the projected global net revenues against a budget of US$150m, the film is projected to generate a gross net profit to the studio of 159%.  This is before taking into consideration any talent deals and/or financiers.  From an overall P&L standpoint it appears to be profitable to the studio, from a box office perspective the same.  For comparison purposes, looking at DUNE, using the same metrics as above, on a budget of US$165m, the film is projected to gross net profit to the studio of 63%.

How does this translate to other windows, will these performances hold up?

Theaters v. Couch: Is one release better than the other

To understand the full picture of how the title will do in the current environment, we also need to look at its OTT performance to date as well as other comparable titles.  We took our proprietary OTT Demand Data which captures 125m P2P transactions daily for a yearly total of 35b transactions.  The best metric for the demand data is the representative market share a title holds against all titles in release.  By this measure, Cinelytic is able to compare films like for like without the issue of seasonality.

In this case, we took the first 7 days of P2P consumption for each of SHANG-CHI, NO TIME TO DIE, DUNE, FINCH and RED NOTICE.

Four titles released within one week of each other: NO TIME TO DIE, FINCH, SHANG-CHI and RED NOTICE.  DUNE had a bit of space with an earlier October release.  Without tough competition, DUNE maintained a high level of OTT performance all the while also being available in theaters.  The late week pop is unlike other HBO Max D/D releases this year and bodes well for the title.  Between SHANG-CHI and NO TIME TO DIE, SHANG-CHI captured more market share which may have been driven by the price point during those first seven days of release.  RED NOTICE came into a crowded market and fared well amongst this level of competition, popping on Day 2 of its release.  RED NOTICE ranks as the strongest release to date on the platform.  Normalizing for platform bias and taking a cross platform view shows that traditional studio blockbusters like DUNE, NO TIME TO DIE and SHANG CHI ultimately outperformed RED NOTICE by a material margin.

SHANG-CHI in terms of market share performed similar to the opening weeks of JUNGLE CRUISE and F9 this summer.  While not to the opening week OTT numbers of BLACK WIDOW or SUICIDE SQUAD, none of these titles walked into as much strong competition as SHANG-CHI.  The same can be said of these other October/November releases, all are fantastic results in light of the company they keep.

Yes, So What?

But what does this all mean.  We know SHANG CHI shows a strong profit and ROI.  We know from an OTT standpoint it has done well against other films.  Ultimately the conclusion is that windows matter.  We have seen time and time again that a theatrical release with a shortened 45-day window allows for a feature to win both at the box office and at home.  D/D strategies allow for some box office wins but bigger successes for viewing at home.  This is/was a viable strategy for incentivizing streaming subscribers in 2021.  Straight to streaming shows a great deal of promise for the pure plays such as Netflix and will continue to do so, both for the film P&L and the streamer hosting the title on their platform.  Last, film release strategies continue to be tactical in their execution with decisions being taken on a case-by-case basis in light of the current environment.  After an experimental 2020, it seems that most larger films will settle on the 45 day theatrical window in 2021 before going Home Video. D/D as well as straight to streaming will be viable alternatives for medium to smaller titles. We will be watching closely.

Stream or Screen: MGM held off on potential sales to Netflix and Apple and released NO TIME TO DIE theatrically – Was this the right call?

Ever since Amazon’s announcement on May 26^th highlighting its intention to acquire MGM Studios for US$8.45b, questions have lingered regarding what that would mean for the future of the studio’s crown jewel and marquee James Bond franchise. With the recent October 8^th release of the latest and much delayed installment in the series, NO TIME TO DIE, we decided to provide some insight on how the pre-COVID-19 vs. present day projections for the film differ, along with our conclusions regarding the decision to fore-go a sale to a streaming giant and uphold a purely theatrical release.

How’s it going so far?

As of October 25^th, 2021, NO TIME TO DIE has grossed DBO of over US$120m and IBO of US$405m. The film is scheduled to open in China on October 29^th, where it will compete with Warner Bro’s. 2^nd weekend of the much-anticipated HBO Max day and date release of the sci-fi epic, DUNE, which just surpassed US$41m in DBO during its weekend debut. NO TIME TO DIE is currently and understandably tracking to be a far cry of its two predecessors, SPECTRE and SKYFALL, which boasted worldwide cumulative figures of $881m and with $1.1b respectively.  In neither case, did James Bond have COVID-19 and closed theaters to combat. 

Green-Light Pre-Pandemic vs. Today

As Cinelytic has showcased in past insights, the most effective way to understand the relative value is to make sense of the underlying economics of the title in a pre vs. pandemic environment and then compare both to the actual value of the deal during these two drastically different time periods. Early reports from 2020 indicated that MGM had attempted to sell NO TIME TO DIE to both Netflix and Apple for around US$600m, a price that would come with a one-year license to stream the film. Apple seemed to be the only streaming service interested enough to counter with any actual figure, reportedly making an offer in the range of US$350m – US$400m for a 12-month agreement.

Looking at NO TIME TO DIE with an assumed budget of US$300m and additional global P&A costs of US$220m, we ran the title through our predictive module considering the 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc. The resulting pre-pandemic domestic and international box office projections were respectively US$219.2m and US$476.3m. Considering all other media revenues inclusive of home video, television and ancillaries, along with all associated costs, the platform projected a global net revenue of US$583m and ROI of 94%.

Similarly, the film was then run through the platform with the same budget and similar key attributes, albeit this time with US$340m in assumed global P&A costs due to the extensive delays associated with the film’s release. The projected post-pandemic domestic and international box office figures were now respectively US$162.2m and US$449.3m. Once again considering all other media revenues and associated costs, the platform now projected a global net revenue of US$360m and ROI of 20%.

So…who was right?

The Cinelytic pre-pandemic projection indicate that MGM’s price tag of US$600m was a fair ask against a budget of US$300m.  In this scenario, the film would have returned an ROI of 100%.   However, given the Cinelytic post-pandemic global net revenue projection of US$360.4m, Apple was also justified in offering a discounted purchase price during the pandemic of US$350m – US$400m. That being said, the conclusion can be made that MGM’s ultimate decision to forego a sale and release the film theatrically was in the best interests of potentially not only MGM and Eon Productions, but the cinema industry as a whole.

If the film is to generate global revenues via theatrical distribution through United Artists and Universal that would be comparable to the price a streaming giant like Apple was willing to pay, the production companies had little incentive to move forward with a sale. As noted earlier, the James Bond franchise is the crown jewel in the MGM catalogue, and for Eon Productions, the franchise is a standalone business with a six-decade history. According to longtime James Bond producer Barbara Broccoli, Amazon will continue to ensure that future films in the franchise receive a theatrical release. As such, the success of NO TIME TO DIE means more than just breaking even from a financial standpoint; it needs to help ensure that James Bond remains as a character that consumers will make a point to go see on the big screen. While the box office numbers will likely continue to be viewed as “underperforming” as we near the end of year, it may still prove to be an effective enough plan to simply outperform other 2021 releases and help breathe life into the theatrical distribution industry.

With Summer wrapping up, this month we decided to take a look at Indie fare to see how the Fall season is sizing up for film audiences in theater and at home.  We took a deep dive into the releases of STILLWATER, CODA, JOE BELL, and THE GREEN KNIGHT using both our Cinelytic intelligence platform to forecast a traditional release model and our proprietary P2P data to understand consumer demand at home.

Are There Winners?

From this group of films, both THE GREEN KNIGHT and STILLWATER have performed in both theaters and at home under the current circumstances.  They both released on July 30^th and split the audience earning $14m of DBO for STILLWATER and $17m for the THE GREEN KNIGHT.  JOE BELL generated $1m of DBO while CODA released directly on AppleTV+.

Using the platform, we reviewed the four titles focusing on both pre-COVID and pandemic release strategies.  For THE GREEN KNIGHT we found that from a domestic box office perspective, the DBO cume of $17m was in line with our COVID forecast (see below) but $10m lower than what the film would have generated in a non-pandemic environment. Pre-pandemic the system projected approximately $27m of DBO.  This nearly 40% reduction in DBO is in-line with what we see with other films pre-pandemic vs. today.  Focusing on the current environment one sees that the film will break even from an investor point of view so long as the P&A spent is limited and the title performs to the similar level internationally as it generated domestically.  International performance will be challenging in the current release environment.

Running the same analysis for STILLWATER as we did for THE GREEN KNIGHT yields similar results albeit with the film showing a loss due to the higher budget and weaker performance relative to its pre-pandemic forecast ($14m vs $30m). The film will need to perform well in Home Video and internationally to break-even.

Box Office Only Tells Part of the Story

Layering in our digital OTT consumption analysis amplifies the points we made above.  We took our proprietary OTT Demand Data which captures 125m daily P2P transactions for a yearly total of 35b transactions.  The best metric for the demand data is the representative market share a title holds against all titles in release.  By this measure, Cinelytic is able to compare films like for like without the issue of seasonality.

In this case, we took the first 7 days of P2P consumption for each of STILLWATER, THE GREEN KNIGHT, CODA and JOE BELL.

Both THE GREEN KNIGHT and STILLWATER released on OTT on the same day and had similar performance over their first week of release. THE GREEN KNIGHT like in its box office performance had slightly better domestic OTT consumption starting Day 1 with 12% and finishing the week at approximately 5%.  STILLWATER debuted at approximately 9% and gradually dropped over the week to finish at 4%.  This should translate into strong HV revenues for both titles, especially THE GREEN KNIGHT. The question is whether the premium VOD window captures enough consumptions as the initial price tag can cause digital consumption to be below potential.

JOE BELL and CODA were not able to capture audience share in their first week of the digital release.  Both sat just under 3% for their first day with JOE BELL holding during the week and finishing with a slight bump to 2% at the end of the week.  CODA failed to capture audience share sitting at 2% for most of its first week before dropping to around 1% on Day 7.

What Does This All Mean in the End?

What we are slowly understanding over the pandemic after several months of analysis is that windows matter.  As we move through the pandemic, we find that every three months a new distribution window emerges.  What we are starting to see though is that there is a pattern where theatrical releases followed by an OTT window makes sense for the right product.  In September, we see that Indie fare if well executed at the right budget will have a life in both theaters and OTT.  We see that consumers will find the content and watch it in the media they desire.  Other product can have a harder time gaining traction whether released in theaters or at home.  Which parallels the old adage that the more things change, the more they stay the same.

Join us next month as we dissect the OTT release of SHANG-CHI AND THE LEGEND OF THE TEN RINGS along with the theatrical releases of NO TIME TO DIE and VENOM and the hybrid release of DUNE.

As we roll into the end of Summer, three powerhouse films were still set to release to make noise in August.  The focus in this month’s blog is to see if OTT playability continues with the similar trends we have seen since the start of Summer with the release of BLACK WIDOW by reviewing F9, JUNGLE CRUISE and THE SUICIDE SQUAD.

Audiences Like OTT

We took our proprietary OTT Demand Data which captures 125m daily P2P transactions for a yearly total of 35b transactions.  The best metric for the demand data is the representative market share a title holds against all titles in release.  By this measure, Cinelytic is able to compare films like for like without the issue of seasonality.

In this case we took the first 7 days of P2P consumption for each of F9, JUNGLE CRUISE and THE SUICIDE SQUAD.

The data shows that both F9 and JUNGLE CRUISE dominated the marketplace in their respective first 7 days.  As the graph above shows, JUNGLE CRUISE edged out ahead of F9 for the top spot and has continued to do so up and until the release of THE SUICIDE SQAUD.  Together on most days they average a 26% market share, roughly in line with BLACK WIDOW performance.  Even apart they dominate the space with the nearest competitor performance at 25%-45% the level of either film.

THE SUICIDE SQUAD released on August 6^th, devoid of opening weekend competition.  Both JUNGLE CRUISE and F9 had opened 8 days earlier.  The film opened well and continues to lead in the #1 spot.  Understanding the success on OTT begs the question of how does it fare against BLACK WIDOW, the leader so far this summer and how does it compare against everything else released to date.

Looking at comparable titles really adds clarity to the discussion.  One now understands that THE SUICIDE SQUAD is basically playing out on OTT similarly to BLACK WIDOW.  From an OTT standpoint it will be the 2^nd highest film of the Summer behind BLACK WIDOW.

Yet when compared against Q4 2020 and Q1 2021 titles, the same pattern emerges that we discussed last month.  THE SUICIDE SQUAD does not capture the same level of viewership as GODZILLA V. KONG, WONDER WOMAN 1984 and MORTAL KOMBAT.  This again points to the argument that Q42020 and Q1 2021 look to be a moment in time in terms of OTT performance that we may not see again unless theaters are either limited or closed and the bulk of consumption is pushed to OTT.

Yes But What About the Numbers…

When combining the OTT consumption we have outlined with Box Office performance and by media revenues what does it ultimately mean to these US$200m budgeted behemoths.

All three films had varied release strategies with F9 releasing theatrically on June 25^th and its OTT release over a month later on July 30^th.  THE SUICIDE SQUAD and JUNGLE CRUISE both released D/D.

Running a pre-pandemic revenue forecast for all three titles in the Cinelytic system it becomes clear that F9 appears to get closet to its pre-pandemic projection whereas the other two fall short.  Thus, from a Box Office perspective, a five-week window to OTT release feels appropriate.

The issue though is that releasing on OTT with JUNGLE CRUISE hurt F9’s ultimate performance on OTT and had it released D/D on June 25^th could F9 have captured a larger market share on OTT thereby securing a more robust return.

JUNGLE CRUISE approached the market with a mixed release strategy that appears to have achieved a goldilocks type result, not too hot, not too cold but something that feels just right.  It will capture decent box office but will also capture good OTT viewership.  Together it translates to a fair result in theaters and a big win for subscribers of Disney+.

THE SUICIDE SQUAD is continuing the strategy they have applied all year.  From an OTT standpoint, the film seems to be performing well for HBOMax.  We will see how DUNE performs when it releases D/D in October.  Additionally, the release script will now change for 2022 with AMC announcing last week that it will have a 45 day window for all WarnerBros. titles before releasing on HBOMax.

Join us in the coming months as we see how SHANG-CHI AND THE LEGEND OF THE TEN RINGS and NO TIME TO DIE perform.

With Summer well under way, this month we wanted to focus on how Summer tentpoles are playing and what does it mean for consumers going to theaters and watching films release via OTT.  Cinelytic is here to help provide transparency to the issue by using our proprietary AI powered film analysis platform along with our OTT consumer demand data to give you insight.

BLACK WIDOW Delivers

The industry has collectively been waiting for the release of BLACK WIDOW and it has not disappointed.  The film opened with a bang to a pandemic high of US$80.4m.  The film at the same time also released on Disney+ Premiere Access and judging from our P2P consumption data has also had spectacular results.

BLACK WIDOW in its first seven days of release on OTT has captured the #1 spot with an opening day of 22.6% of the top 100 market share and has averaged 18% over the course of that week.  In terms of its peers, one can see that it has truly eclipsed the competition whether the films released D/D like SPACE JAM: A NEW LEGACY or THE BOSS BABY: FAMILY BUSINESS, released in theaters with a later OTT window like THE QUIET PLACE 2 or released directly to OTT as in the case of THE TOMORROW WAR. 

The reality is that four of these films released theatrically and on OTT within two weeks of each other and competition was bound to impact performance.  Results are mixed in this environment as to whether one release strategy over another made the difference for any title. 

Taking a look at our platform results, BLACK WIDOW is projected to gross Domestic Box Office of US$200m, $150m below our projected pre-pandemic gross of $350m.  Having said that though as one sees below the mixed release strategy will pay dividends for the film.  Reviewing the Top 2021 OTT releases that also had a theatrical release, what we see is that good content with lackluster theatrical opening weekends tend to perform well on OTT and vice versa.  With BLACK WIDOW though we see that great content performs well in both media, capturing both strong opening weekend by theater performance as well as OTT Top 10 Market Share.

We also though have to look to how BLACK WIDOW plays out amongst peer titles from 2020 and 2021 who had D/D releases along with straight to OTT exclusives to get the full picture.  Below we outline the OTT results for the 1^st seven days of release for various tentpole performers.

When looking at this peer group, one sees that although strong, other titles such as GODZILLA V. KONG, WONDER WOMAN 1984, MORTAL KOMBAT and MULAN performed better than BLACK WIDOW in its OTT release.  Those films that generated limited DBO due to COVID restrictions and/or direct to OTT releases had an explosion of demand in OTT.  MORTAL KOMBAT, WONDER WOMAN 1984 and MULAN all fit this description.  The outlier of GODZILLA V. KONG shows that great product can transcend and perform in both theaters and OTT.  This is the case with BLACK WIDOW.  It has been anticipated all year long as the title to break through and bring audiences back to theaters while also pushing viewership on OTT. 

On the flipside, a stellar product like QUIET PLACE 2 really did need to live in theaters and it has succeeded with a DBO cume of US$156m and IBO of US$131m, a short distance from its predecessor that grossed DBO of $188m and IBO of $162m.  The film needed theaters to live and has had less than stellar results on OTT.

Conclusion: The Times They Are A Changing

BLACK WIDOW will finish with great box office as it ends its run, it will also finish with a stellar result on OTT.  It may not eclipse the big titles on OTT from late 2020 and early 2021 but that is likely the point.  Those four films; GODZILLA V. KONG, WONDER WOMAN 1984, MORTAL KOMBAT and MULAN may end up being a moment in time in terms of theatrical and OTT performance.  Mixed release strategies will be the norm as we see now in July.  The one key point, great product will always rise to the top no matter its media.  But will we see similar OTT results that we had for GODZILLA V. KONG and others in an environment where theaters are open and there is access to films outside the home?

We expect to see more evolution in the Box Office and the OTT space this Summer and will look to F9, JUNGLE CRUISE, THE SUICIDE SQUAD and SNAKE EYES: G.I. JOE ORIGINS for answers. 

For our June Cinelytic Insights we reviewed the year to date for OTT consumption to understand if there was any correlation between performance at the Box Office and performance on OTT.  Is there anything that can indicate the types of films that should be released in one medium versus another.  Cinelytic is here to help provide transparency to the issue by using our proprietary AI powered film analysis platform along with our OTT consumer demand data to give you insight.

In this case, we used our proprietary OTT consumer demand data which captures 125m daily P2P transactions for a yearly total of 35b transactions globally.  The best metric for the demand data is the representative market share a title holds against all titles in release.  By this measure, Cinelytic is able to compare films like for like without the issue of seasonality.  Furthermore, we focused on the strongest week of performance (initial release on OTT) and compared against the top 10 for the January 1 – June 15 (2021) time period, rather than cume to date as otherwise giant titles from 2020 like WW84 and TENET would eclipse the top ten and then later in the year films like DUNE, TOP GUN and NO TIME TO DIE would not have opportunity to shine in their respective release weeks.

The top 10 market share as outlined below is for feature films that had theatrical as well as D/D and/or subsequent OTT releases:

What the OTT consumption data shows is that quality feature film product of a high range will perform in both theaters and OTT.  GODZILLA V. KONG and WONDER WOMAN 1984 sit in these positions.  Upcoming releases of BLACK WIDOW, THE SUICIDE SQUAD, SHANG-CHI, VENOM, NO TIME TO DIE, TOP GUN, etc. should play out in both box office and OTT.  CRUELLA in this group failed to capture box office and sits 6^th in terms of the top 10 OTT strongest weeks.  Whether it stays in the top 10 is questionable in light of the caliber and quantity of upcoming releases.  

Mid-tier and lower budget product if well executed and of value may not have explosive box office performance but will capture strong market share in OTT.  We see that in the case of MORTAL KOMBAT and in particular CONJURING: THE DEVIL MADE ME DO IT which has some of the strongest OTT performance to date and the film has only been in release for 12 days.  It will be intriguing to see where it places at the end of the year.  Furthermore, lower budgeted films, as we see from the results above, sit in a precarious position as if they are of quality, they could forgo a theatrical release and have a strong and healthy life on OTT.  Titles like WRATH OF MAN, NOBODY and MARKSMAN will be interesting to follow to see cumulatively how they perform at the end of year against everything else in release.  By forgoing theaters, P&A could be spared, and net profit could be accelerated.  The outlier here is MONSTER HUNTER, a mid-budget adaptation of a video game that got trapped by COVID to release at the end of 2020.  It is having great OTT performance to date and begs the question of whether it should have gone straight to OTT.  Looking at a title like ARMY OF THE DEAD that is performing well on Netflix, one would think that MONSTER HUNTER could have released in a similar fashion. 

For comparison purposes, we also looked at features that strictly premiered on OTT and bypassed theatrical.  Below is the top 10 market share for the January 1 – June 15 (2021) time period:

The data further proves the point made above that certain films have a greater opportunity releasing in OTT rather than risking a traditional theatrical release and expending P&A.  Films like COMING 2 AMERICA, ARMY OF THE DEAD, WITHOUT REMORSE and STOWAWAY are performing well in this media and garnering audience. (Take a look at our March Cinelytic Insights wherein we review how COMING 2 AMERICA was a win for both Paramount and Amazon.)  INFINITE appears to be a big budget title that bypassed theatrical to appear on Paramount+ and may have made the right choice to forgo P&A and capture audience share on the streamer.  It released June 10^th and it will be interesting to compare OTT consumption against bigger budget thrillers later this Summer in particular TOMORROW WAR on July 2^nd. 

These films do have range to perform, looking at the straight to OTT titles, three titles captured 50% of the top 10 market share.  For titles that also released theatrically, the top three titles held just 44% of the top 10 share.  JUSTICE LEAGUE proves a bit of an anomaly being a 2017 release with a $300m budget that came out as a four-hour extravaganza.  The film captured strong market share, more than both the 2^nd and 3^rd title combined.  It is a testament to the quality of the content and like we said above bigger budget quality content will have room to perform on both OTT and the Box Office.

All to say that as theaters open and films release, we hope to see box office and attendance improve while providing a foundation for OTT.  The mid-year data shows that quality product with bigger budgets will have strength in both Box Office and OTT.  The question going forward will be for mid-tier and lower budgeted projects.  Cinelytic P2P consumer demand data along with full P&L and ROI analyses from the platform will provide a detailed understanding of whether one should risk P&A and release theatrically or preserve cost and launch on OTT. Stay tuned for more data and analysis as 2021 plays out. 

With THE MITCHELLS VS. THE MACHINES releasing on April 30^th on Netflix much has been made about how well the film is performing for the streamer and whether the price paid makes sense for both parties.  No one outside of the respective companies really knows what that means, how it compares to other titles and ultimately how does it impact the bottom line to the distributor, financier, and producer.  Cinelytic is here to help provide transparency to the issue by using our proprietary AI powered film analysis platform along with our OTT consumer demand data to give you insight. 

Green-Light Pre-Pandemic vs. Today

The best way to understand the relative value is to make sense of the underlying economics of the title in a pre vs. pandemic environment comparing both to ultimate deal value.  The film was purchased by Netflix for “more than $100m.”  Looking at THE MITCHELLS VS. THE MACHINES with an assumed budget of US$75m, we ran the title through our predictive module considering the 19 key attributes to run the AI output including budget, genre, rating, talent, IP value, etc. and projected a pre-pandemic domestic box office tally in the median scenario of US$127.5m.  Coupled with all other media revenues, the platform projected domestic gross revenues of US$252.5m.  

Considering the costs associated with distributing the title on worldwide basis yielded Gross Net Revenue of US$168.5m before considering the budget of $75m.  With a Production Tax Credit of 20%, the film in the end would net US106.2m to the Studio (before any equity or profit participation).  When compared against a price tag of “more than $100m” the math seems spot on regarding the price tag paid.  But was there value left on the table for Sony?

To make sense of deal value one has to look at similar animated titles released theatrically during the pandemic and compare the actual results against pre-pandemic green lights.  Using the Cinelytic platform we compared the green light to actuals forecasts for each of RAYA AND THE LAST DRAGON, TOM & JERRY and THE CROODS: A NEW AGE. 

Using the same methodology as for THE MITCHELLS VS. THE MACHINES, the platform predicted a pre-pandemic vs. pandemic release Gross Net Revenue Differential of between US$100m-US$150m for the three films.  This is prior to taking into consideration the budget.  The table below outlines the results output by the Cinelytic platform.

From this animation all-media revenue comparison, we now understand that the difference between a pre-pandemic theatrical release and a pandemic release with limited access to theaters and moviegoers is US$100m to the bottom line.  Had THE MITCHELLS VS. THE MACHINES released theatrically during the pandemic, it would have performed to the same level as its peers, generating approximately US$70m of Gross Net Revenue, US$100m less than a pre-pandemic model and unable to pay back its US$75m production cost and generate upside profit.  Thus, from a comparison perspective alone, Sony made a great decision in selling the film to a strong streaming company.

OTT Consumer Demand:

Next, we need to look at this animation comparison group in terms of OTT consumer demand to see whether the various release strategies (theatrical vs. straight to OTT) made a difference. 

In terms of the analysis, we took our proprietary OTT Demand Data which captures 125m daily P2P transactions for a yearly total of 35b transactions.  The best metric for the demand data is the representative market share a title holds against all titles in release.  By this measure, Cinelytic is able to compare films like for like without the issue of seasonality.

Outlined below is the Market Share by day detail for the 1^st seven days of release for each of the five comparison titles.

What clearly stands out is that RAYA AND THE LAST DRAGON truly captured its place in the market upon OTT release.  It had strong competition from COMING 2 AMERICA throughout its run.  CROODS: A NEW AGE also performed well but was relatively without competition when it released in November.  SOUL released at the same time as WONDER WOMAN 1984, the strongest OTT of 2020 along with its impressive box office run.  TOM & JERRY had the market to itself and failed to really pop and capture market share in its 1^st seven days of release. 

THE MITCHELLS VS. THE MACHINES and WITHOUT REMORSE released on OTT on the same day while MORTAL KOMBAT premiered D/D a week earlier.  Both titles early in their releases captured market share and limited THE MITCHELLS reach. 

When one then looks to see how THE MITCHELLS plays out in terms of market share against the top original film titles to release on Netflix, one can see that THE MITCHELLS is holding its own amongst this celebrated group. It sits right in the middle of where the top ten played out over the course of their 1^st seven days and actually feels to be capturing as much market share by day as 6 UNDERGROUND (US$150m budget) captured during its 1^st seven days, ultimately tying for 4^th place with 83m views to date.  All to say that the film is achieving great attention on the platform and should be considered a win for Netflix.

In The End It’s All About The Subs:

Now having looked at what the impact is to a film’s P&L and what one needs to do for an effective OTT release, what then does this all mean to subscribers.

For Disney+ who now sits at 100m subscribers (March 2021) vs. 33.5m just a year ago, the releases of HAMILTON, MULAN, SOUL and RAYA seem to have greatly impacted subscriber growth.  In terms of absolute numbers, December 2020 (SOUL) seems to have gained 8.1m subscribers for the month while September 2020 (MULAN) seems to have increased by 6.6m.  April 2020 was a strong month for Disney+ growth but much is attributed to 8m new subscribers from India.

HBO Max and HBO domestic subscribers ended March 2021 with 44.2m vs. 41.5m at the end of 2020.  This represents an almost 3m subscriber bump due to the 30-day windows for WONDER WOMAN 1984, THE LITTLE THINGS, JUDAS AND THE BLACK MESSIAH, TOM & JERRY, MORTAL KOMBAT and GODZILLA V. KONG (check out our April Insights for that analysis).  This only takes domestic subscribers into account and does not include the international subscriber bumps.

Netflix today sits at around 208 subscribers worldwide.  The impact of any one Film or TV show is difficult to quantify.  What we do know is that 7 of the top 10 English language Films on the platform hail from 2020 (two from 2019 and a title from 2018).  Understanding that a big push for the year, 40m additions, came during COVID, the reality is that something has to keep consumers on the service.  Subscriber growth may have slowed for Q1 2021, but the streamer has a significant strategy for animated family fare going forward.  THE MITCHELLS playing as well as 6 UNDERGROUND in terms of market share, only helps the company succeed in that venture.  

Conclusion:

Overall, Disney+’s RAYA comes out on top, CROODS 2 comes in second followed by a close race for third between SOUL, MITCHELLS and TOM & JERRY in terms of digital audience attention.  We can also establish that MITCHELLLS was among the strongest releases for NETFLIX over the last two years.  The sale of THE MITCHELLS VS. THE MACHINES can be seen as a win-win for both Sony who developed the title and then had a distribution decision to make and Netflix with 208m avid viewers always ready for good new content.  The Studio was able to avoid a US$100m loss to the film if it opened theatrically during the pandemic and Netflix was able to get a quality project that fits with its upcoming push into animation.

As soon as the dust settled on the monster opening weekend of Godzilla vs. Kong an explosion of articles appeared proclaiming that audiences are back in theaters!!! As no universally accepted metric exists for streaming releases the focus fell entirely on the traditional theatrical model with a nostalgic feeling that the “good old days are back again”. But to fully appreciate the business impact of the dueling monsters this past weekend, one must take the SVOD/OTT side of the D/D release into account.

Cinelytic is able to provide these critical insights into the economics of a traditional theatrical release and direct to SVOD/OTT release. We utilized our AI driven intelligence platform to forecast the traditional window revenues of Godzilla vs. Kong (“GvK”) complimented with our OTT demand data to detail how well the title did digitally to understand the economics of the  picture.  After all, it’s not about attention grabbing headlines, it’s about the interpreting the relevant data.

Is theatrical back!?:

We took into account the 19 attributes that the Cinelytic platform requires to run a full revenue waterfall including  budget, genre, key talent, release strategy and IP value.  The system predicted domestic box office of US$86m in the median revenue forecast – the outcome with the highest probability. See our forecast summary below:

Based on the US$32m opening weekend GvK is on track to achieve our base case forecast, which is very impressive under the current restrained theatre environment.

We iterated on the model and ran the film as a pre COVID release scenario and the system predicted a median domestic box office forecast of US$220m – of course these revenues are unachievable in the current Covid environment. More importantly, our summary below shows a projected ROI of 76.2% for producer/financier Legendary Entertainment in this pre-Covid scenario.

Yet in this current release environment, the ROI impact is significantly less. To make up that difference, we look to the impact of the D/D release via OTT.

Streaming even stronger!?:

HBO Max announced their 2021 Day and Date strategy at the end of last year and was criticized by the theatre operators and parts of the creative industry.  Traditionally there is a belief that film distribution is a zero sum game: if a film gets released on OTT  the theatrical revenues will suffer and vice versa.  This view means that the pie has a certain size and participants need to fight for their share. There is an alternate view that centers around enlarging the pie by offering the consumer the choice of how to watch a film. As GvK signals the possible change in consuming environment with Covid cases dropping and vaccines become more prevalent, now is a great time to address which viewpoint is correct:  zero sum gain or growing the audience pie?

As a first step to understanding how films can enlarge the pie, we looked at OTT consumption for the first seven days of release for titles released over the past twelve months.  Cinelytic’s exclusive OTT data tracks 100 million global transaction daily to assess content demand for titles across all streaming platforms. The chart above shows GvK opening week as a clear and strong #1 digital release over the last 12 months.  What one notices as well are four other WB titles that eschewed traditional releases and attempted hybrid release strategies.  With a 15.7% top ten market share along with a strong theatrical opening weekend, one can see that there is room and appetite for the consumer in both theaters and at home via SVOD.  WW84 followed the same strategy albeit with fewer theaters during the recent surge.  MULAN was exclusive on OTT, while BAD BOYS FOR LIFE released theatrically in January 2020 and has lived in a strong position on VOD ever since.  All to say that one can see that there is room in this environment for various release windowing strategies. 

As a second step, we analyzed how GvK performed in comparison to the first seven release days of relevant comps including TENET, MULAN, WW84 and COMING 2 AMERICA.

In order to track and compare like for like performance in the cleanest way, we measured the daily market share per title / per territory for the initial seven days of release. Market share for any listed title represents the transactions that the title generated on a specific day against the total number of transactions for the day for all daily film transactions in that territory.  This way we are able to establish overall strength/popularity of a title at launch and track how well demand keeps up during the first days of release.

Looking at the chart below, GvK dominated its peers with 32.9% overall market share on Day 1 and continued to do so through the first seven days, culminating with a 17.8% market share on Day 7.   Based on our data GvK became HBO Max’s strongest release to date.  Recall that this is in a release universe of 3,100 theaters, the largest release in COVID times, as well as theatrically in approximately 38 international territories.

Our OTT data shows that GvK drove audiences to the film and HBOMax.  We will have to see over following months if this translates to new subscribers and whether they stay with the service.  WW84 is estimated to have increased HBO Max activated subscribers by 4.6m with its SVOD release.  Cinelytic predicts that the impact of the GvK SVOD release to  increase activated subscribers to the service by 6.0m.  With a price of US$14.99/month, even retaining 60% of those subscribers through the balance of the year would net the studio US$486m. This revenue stream can more than make up for the lost revenue in the reduced COVID theatrical release. With all 2021 releases following this D/D strategy (including THE SUICIDE SQUAD, SPACE JAM and DUNE) hopefully the subscriber impact is both positive and accretive. 

Not a zero sum game:

Putting the various pieces together provides a more complete picture and understanding as to why Warner Media’s day and date strategy is actually increasing the total audience by providing consumers different choices of how to watch the content.  What the strategy allows the studio to do is capture viewers in their preferred viewing environment whether in theaters or at home on SVOD  It allows studios, financiers and producers to capture all of your consumers in all of their viewing windows as early and quickly as possible.  An additional benefit is that it also allows for a reduction of advertising spend for later windows as the promotional effort compresses to fit this new normal of distribution reality.

Our analysis also showed that the studio’s D/D strategy might generate similar or even higher revenues through the combined theatrical, SVOD subscribers and international VOD revenues compared to the classic pre-Covid release model.

None of this presumes a permanent change because of what one film can generate during this phase of the pandemic. What the data does indicate is that Warner Media maximized GvK’s potential by generating revenues in traditional windows complimented by an HBO Max release which helped propel their service. While the studio might shift back to a shortened theatrical window strategy post pandemic  a Day and Date release strategy is working well in the current environment and might also continue to do so in the future.

With our OTT demand data and AI-driven intelligence platform, Cinelytic is here to support this type of critical thinking and out of the box decision making.

Get in touch today to learn how Cinelytic can future proof your decisions.

Sony’s Monster Hunter beats Disney+ Raya And The Last Dragon in top streamed films last week. WandaVision makes the 6th week as #1 in TV.

In 3rd position Zack Snyder’s Justice League gathers a 9.3% of the market share.

Fueled by his restored faith in humanity and inspired by Superman’s selfless act, Bruce Wayne enlists newfound ally Diana Prince to face an even greater threat. Together, Batman and Wonder Woman work quickly to recruit a team to stand against this newly awakened enemy. Despite the formation of an unprecedented league of heroes — Batman, Wonder Woman, Aquaman, Cyborg and the Flash — it may be too late to save the planet from an assault of catastrophic proportions.

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Cinelytic provides critical insights into the economics of a traditional theatrical vs. direct to OTT release by using our OTT demand data and our AI-driven content intelligence platform.  We utilized the platform to establish what value COMING 2 AMERICA has to different sectors of the film business and as well as  what that says about the current state of the film industry.

Paramount’s Pay Off:

We ran COMING 2 AMERICA on our AI-driven platform as a classic theatrical release in a post-Covid environment. By taking into account key project variables including budget, genre, key talent, release strategy and IP value, the system predicted global net revenues of US$106m in the median revenue forecast – the outcome with the highest probability. See our forecast summary below:

Global net revenues are defined as global theatrical (3,500 theatres in the US), home video and TV revenues net of exhibitor shares, P&A, distribution and marketing expenses. These net revenues are comparable to what Paramount would receive when selling the worldwide rights to a film. We use the median as our base case but if the title were to catch on with  audiences, the revenue figures can increase as shown in our probability weighted Predictive Forecast scenarios. Overall, Cinelytic’s median forecast is 85%+ accurate.

The forecast analysis clearly illustrates that the value of COMING 2 AMERICA to a traditional studio is US$106m.

The US$125m that Amazon reportedly paid for the title in October 2020 handed Paramount a US$19m premium to our global net revenues forecast of US$106m. With the studio’s net investment of US$50m, the deal further increased the studios profits from the film during a pandemic year that saw theatrical revenues drop 75%. Pocketing all film profits at a time when most theatres were closed with not clear path to reopening seems to make very good sense from Paramount’s perspective.

Amazon’s Gamble:

Streaming platform competition is heating up. With Netflix being the industry leader and Disney+ going strong, further competitors such as Apple+, HBOMax and Hulu are all increasing investments into exclusive content to compete for audiences. Under these circumstances Amazon was looking for strong tittles that can drive audiences, brand image while being a creative fit.  

COMING 2 AMERICA seems to fit that profile from first glance as the prequel is a much loved classic all over the world. The title was released on Amazon Prime on March 5 2021 – we took a deep dive on its performance to understand whether the acquisition paid off. Cinelytic’s exclusive OTT data tracks 100 million global transaction daily to assess content demand for titles across all streaming platforms.

As a first step, we ran our OTT data for the domestic opening week to understand how the title performed with US audiences.

COMING 2 AMERICA had to compete with Disney’s RAYA AND THE LAST DRAGON another highly anticipated title at the beginning of March. Disney+’s title came out on top but COMING 2 AMERICA was a strong second with 18.4% Top 10 market share.

As a second step, we analyzed how COMING 2 AMERICA performed in comparison to the first seven release days of relevant comps including Amazon’s BORAT, Apple+’s GREYHOUND, MGM’s BILL AND TED and HBOMax’s TOM & JERRY. In order to track and compare like for like performance in the cleanest way, we measured the daily market share per title / per territory for the initial seven days of release. Market share for any listed title represents the transactions that the title generated on a specific day against the total number of transactions for the day for all daily film transactions in that territory.  This way we are able to establish overall strength/popularity of a title at launch and track how well demand keeps up during the first days of release.

Looking at the Chart below, COMING 2 AMERICA came out on top of its peers with 15.3% overall market share on Day 1 and a strong 8.3% market share on Day 7. Based on our data COMING 2 AMERICA became Amazon Prime’s strongest release to date.

Conclusion:

Putting the various pieces together provides a more complete picture and understanding as to why Amazon Prime’s acquisition of COMING 2 AMERICA made sense for Paramount as well as  Amazon during 2020. There is a real benefit to a studio to refinance/monetize a title like COMING 2 AMERICA during a year when theatres are closed. On the same note, streamers like Amazon Prime benefit from studio level content that would normally be difficult to acquire for one exclusive window. 

Viacom with its release of Paramount+ earlier this year appears to focus on releasing feature films 30-45 days after the theatrical release.  Understanding this new approach, it appears that COMING 2 AMERICA sale may have been a one off as we move further into 2021.

With our OTT demand data and AI-driven intelligence platform, Cinelytic is here to support this type of critical thinking and out of the box decision making. Click here to learn more about our OTT data tracking tool.

Get in touch today to learn how Cinelytic can future proof your decisions.

Disney+’s Raya And The Last Dragon was the most streamed film last week, beating PrimeVideo’s Coming To America 2. In TV, WandaVision holds #1 spot for the fifth consecutive week.

Set in the lush and royal country of Zamunda, newly-crowned King Akeem (Eddie Murphy) and his trusted confidante Semmi (Arsenio Hall) embark on an all-new hilarious adventure that has them traversing the globe from their great African nation to the borough of Queens, New York – where it all began

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Disney’s Raya And The Last Dragon leads over PrimeVideo’s Coming To America 2 in last week’s Top20 Films streamed.

Raya is set in the fantasy world of Kumandra, where humans and dragons lived together in harmony. However, when sinister monsters known as the Druun threatened the land, the dragons sacrificed themselves to save humanity. Now, 500 years later, those same monsters have returned, and it’s up to a lone warrior to track down the last dragon and stop the Druun for good.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

HBOMax’s Tom & Jerry over-performed in last week’s streaming Top20. Original content nominated at the GoldenGlobes also fared strongly.

A legendary rivalry reemerges when Jerry moves into New York City’s finest hotel on the eve of the wedding of the century, forcing the desperate event planner to hire Tom to get rid of him. As mayhem ensues, the escalating cat-and-mouse battle soon threatens to destroy her career, the wedding, and possibly the hotel itself.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Top 20 US in Film & TV streaming was dominated by Disney’s WandaVision and Sony’s Monster Hunter.

HBOMax and PrimeVideo content fared strongly throughout the two charts.

Monster Hunter tells the story of a world– a world of dangerous and powerful monsters that rule their domain with deadly ferocity. When Lt. Artemis and her loyal soldiers are transported from our world to the new one, the unflappable lieutenant receives the shock of her life. In a desperate battle for survival against enormous enemies with incredible powers and unstoppable, terrifying attacks, Artemis teams up with a mysterious hunter who has found a way to fight back.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Judas And The Black Messiah, The Little Things and WandaVision performed strongly for HBOMax and Disney+ on the Film and TV Shows Top 20 US streaming chart last week.

The Wrong Turn also performed strongly, in third position in the film category. The Mike P. Nelson directed thriller tells the story of a group of hikers that stray off course and cross into land inhabited by a hidden community of mountain dwellers who use deadly means to protect their way of life. Suddenly under siege, the friends seem headed to the point of no return — unless one man can reach them in time.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Last week’s Top US 20 films streamed in the US sees HBOMax leading and 4 Netflix films. In TV, Disney+’s WandaVision keeps the top for the fourth consecutive week.

Judas and The Black Messiah, tells the story of William O’Neal, who is offered a plea deal by the FBI, infiltrates the Illinois chapter of the Black Panther Party to gather intelligence on Chairman Fred Hampton.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Cinelytic provides critical insights into the economics of a traditional theatrical vs. direct to OTT release by using our OTT demand data and our AI-driven content intelligence platform.  We used our platform to shed some light on CODA’s value to different sides of the market and what that says about the current state of the independent film industry.

The Classic Film Distribution Analysis:

We ran Sundance hit CODA on our data-driven platform as a classic theatrical release in a post-Covid environment. By taking into account key project variables and a $4m investment the system predicted a ROI of 12.8% in the median revenue forecast – the outcome with the highest probability. See our forecast summary below:

If audiences catch on, these figures can increase as shown in our probability weighted forecast scenarios. Overall, Cinelytic’s median forecast is 85%+ accurate.  The forecast analysis clearly illustrates that the value of CODA to a traditional distributor without streaming platform support is between US$3-5m globally.

Therefore, it was a surprise to many that AppleTV+ paid US$25m, the highest fee ever for a Sundance title.  Looking at this disconnect we took a deeper dive to see if one can make a case for the price paid. 

Worldwide Revenues

First we ran Cinelytic’s predictive revenue module to assess global gross revenues which exclude exhibition and distribution expenses in. Based on the 19 input assumptions, the platform predicts that CODA could generate worldwide revenues of US$21.6m in the median base case (the most likely outcome).

The worldwide revenue forecast indicates that the US$25m purchase price is close to the base case and right on target at the 40% confidence level.  As AppleTV+ self distributes globally, the worldwide revenue forecast at the 40% confidence interval is a true indication of total value to a streaming platform. 

Creative Fit:

From a creative standpoint, the film clearly fits into Tim Cook’s creative vision for AppleTV+, uplifting messaging with a distinct programming sensibility to compete with the likes of Disney+. The film’s charm, creative fit and online/critical response set off a bidding war among several potential acquirers before AppleTV+, with its deep pockets, emerged victorious over the weekend.

Streaming Model

Traditional revenue forecasts and creative fit only partly explain CODA attracted a US$25m price tag.  To fully appreciate the business case for CODA, one needs to analyze the streaming model for comparable films.  By doing so one can understand the true value of such a title to a streaming platform. PALM SPRINGS sold to HULU last year at Sundance for US$22.5m (including bonus).  We ran the title in January of 2020 and found that on a 1,000 theater release, the film would generate US$28m of overall revenue.

Comparing the two titles, the CODA price tag feels aggressive.  But this does paint the full picture.  

When looking at our OTT demand data, one notices that Hulu struck gold with PALM SPRINGS as it became Hulu’s most watched original movie of 2020.  Releasing in July, it launched a strong #3 behind GREYHOUND (AppleTV+) and THE OLD GUARD (Netflix) and continued to play well through the summer.  Both titles had budgets that towered in comparison.

In Q3 2020, the quarter during which PALMS SPRINGS was released, Hulu Subscriber numbers increased by 3.4 million or 11% to 35.5 million  – its strongest quarterly subscriber growth of the year. If one assumes a US$10 value per new subscriber the monetary benefit is US$34m. It seems as though AppleTV+ is taking a page out of the Hulu playbook and possibly also motivated by the strong results generated by their  GREYHOUND acquisition (Sony title that we analyzed last year: GREYHOUND ANALYSIS). All to say, our data shows single picture acquisitions can drive a great deal of value for streaming platforms with the acquisition costs ascribed to customer acquisition / marketing expenses.

Conclusion:

Putting the various pieces together provides a more complete picture and understanding as to why streaming platforms are motivated to spend large sums on specific content in order to drive brand value and subscribers. In addition, this analysis highlights how widely this model differs to a traditional theatrical release that often limits film distributors in offers today. Other Sundance titles that did not attract streaming platform interest sold for much less than CODA and more in line with the analysis outlined at the beginning of this article.  

As top dollar streaming platform sales are few and far between, it is crucial to base a film’s financing structure on a realistic business models and release strategy. The traditional release potential should still be the base case as outlined above but one needs to include OTT demand data to better understand if and when a streaming platform could be motivated to pay a high premium for a film that fits their profile and content strategy. 

With our OTT demand data and AI-driven intelligence platform, Cinelytic is here to support this type of critical thinking and out of the box decision making.

Get in touch today to learn how Cinelytic can future proof your decisions. 

WarnerMedia’s leads in this weeks’ US top20 #Streaming films with 2 out of 3 titles in the top 3.

On the TV side, The Walt Disney Company’s WandaVision keeps #1, three weeks in a row.

The Little Things tells the story of Deputy Sheriff Joe “Deke” Deacon, who joins forces with Sgt. Jim Baxter to search for a serial killer who’s terrorizing Los Angeles. As they track the culprit, Baxter is unaware that the investigation is dredging up echoes of Deke’s past, uncovering disturbing secrets that could threaten more than his case.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Universal Pictures’ News Of The World consolidates #1 in its’ second week of release. Netflix’s Outside The Wire is #3 in this week Top 20 films streamed in the US.

Outside The Wire tells the story of a drone pilot, whom in the near future, is sent into a war zone finds himself paired up with a top-secret android officer on a mission to stop a nuclear attack.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

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Universal Pictures’ News of the World takes WarnerMedias’ Wonder Woman 1984s’ #1 spot in this weeks’ US Top 20 Films streamed. In TV, Disney Streaming Services’ consolidates its strength with Wanda Vision and The Mandalorian in the top 2 positions.

News of the World tells the story of Capt. Jefferson Kyle Kidd, whom five years after the end of the Civil War, crosses paths with a 10-year-old girl taken by the Kiowa people. Forced to return to her aunt and uncle, Kidd agrees to escort the child across the harsh and unforgiving plains of Texas. However, the long journey soon turns into a fight for survival as the traveling companions encounter danger at every turn — both human and natural.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

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WarnerBros. ‘Wonder Woman 1984′ takes 2021 by storm and continues its’ domination over other titles in our weekly analysis of SVoD and PVoD viewing data. Disney+’s ‘Soul’ gains a #3 position, while ‘Star Trek: Discovery’ takes over the #1 spot in TV from ‘The Mandalorian’.

‘Soul’ follows a middle school music teacher named Joe Gardner, who seeks to reunite his soul and his body after they are accidentally separated, just before his big break as a jazz musician. Soul is the first Pixar film to feature an African-American protagonist.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep SVoD viewing insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

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According to our data, WarnerBros’. ‘Wonder Woman 1984’ was 2020’s most successful release on SVoD and PVoD (Premium Video on Demand) releases since Cinemas closed in April.

‘Wonder Woman 1984’ tells the story of Diana Prince who lives quietly among mortals in the vibrant, sleek 1980s — an era of excess driven by the pursuit of having it all. Though she’s come into her full powers, she maintains a low profile by curating ancient artifacts and only performing heroic acts incognito. But soon, Diana will have to muster all of her strength, wisdom and courage as she finds herself squaring off against Maxwell Lord and the Cheetah, a villainess who possesses superhuman strength and agility.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Warner Bros. ‘Tenet’ consolidates its’ position, with a second consecutive week in the #1 spot. Universal’s PVOD release ‘The Croods: A New Age” takes a large portion of the market share equally.

‘The Croods: A New Age’ tells the story of a prehistoric Crood family, which searching for a safer habitat, discovers an idyllic, walled-in paradise that meets all of its needs. Unfortunately, they must also learn to live with the Bettermans — a family that’s a couple of steps above the Croods on the evolutionary ladder. As tensions between the new neighbors start to rise, a new threat soon propels both clans on an epic adventure that forces them to embrace their differences, draw strength from one another, and survive together.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

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Warner Bros.’ ‘Tenet’ takes leadership in this weeks’ SVOD analysis Top 20 for Film and TV. Open Road’s ‘Honest Thief’ starring Liam Neeson, consolidates its position in the top 3 for the second consecutive week.

In TV, ‘The Mandalorian’ continues its’ dominance well ahead of ‘Star Trek: Discovery’.

‘Honest Thief’ tells the story of a professional bank robber who, hoping to cut a deal, agrees to return all the money he stole in exchange for a reduced sentence. But when two FBI agents set him up for murder, he must now go on the run to clear his name and bring them to justice.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better SVoD viewing understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

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Universal’s ‘Freaky’ and Open Road’s ‘Honest Thief’ overtakes Disney’s ‘The New Mutants’ in this weeks’ SVOD analysis and Electronic Sales Through Top 20 for Film and TV. On the TV front, ‘The Mandalorian’ still holds strong, showing audiences’ appeal for Star Wars content.

‘Freaky’ tells the story of seventeen-year-old Millie Kessler, who spends her days trying to survive high school and the cruel actions of the popular crowd. But when she becomes the latest target of the Butcher, the town’s infamous serial killer, her senior year becomes the least of her worries. When the Butcher’s mystical dagger causes him and Millie to magically switch bodies, the frightened teen learns she has just 24 hours to get her identity back before she looks like a middle-aged maniac forever.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

WarnerBros.’ ‘Tenet’ takes the top spot in this weeks’ SVOD analysis and Electronic Sales Through Top 20 for Film and TV.

‘Tenet’ tells the story of a secret agent who is given a single word as his weapon and is sent to prevent the onset of World War III. He must travel through time and bend the laws of nature in order to be successful in his mission.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

STX’s ‘Greenland’ overtakes Disney’s ‘The New Mutants’ in this weeks’ SVOD analysis and Electronic Sales Through Top 20 for Film and TV.

‘Greenland’ tells the story of John Garrity, his estranged wife, and their young son, which embark on a perilous journey to find sanctuary as a planet-killing comet hurtles toward Earth. Amid terrifying accounts of cities getting levelled, the Garrity’s experience the best and worst in humanity. As the countdown to the global apocalypse approaches zero, their incredible trek culminates in a desperate and last-minute flight to a possible safe haven.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s SVoD film and TV content consumption below!

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Disney+ continues to lead both on the film and TV show fronts with ‘The New Mutants’ and ‘The Mandalorian’ for this week’s SVOD and Electronic Sales Through Top 20.

‘Greenland’ tells the story of John Garrity, his estranged wife and their young son who embark on a perilous journey to find sanctuary as a planet-killing comet hurtles toward Earth. Amid terrifying accounts of cities getting levelled, the Garrity’s experience the best and worst in humanity. As the countdown to the global apocalypse approaches zero, their incredible trek culminates in a desperate and last-minute flight to a possible safe haven.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s illegal P2P film and TV content consumption below!

Click here to learn more about Cinelytic’s Global Audience Intelligence tool.

Disney+ leads both on the film and TV show fronts with ‘The New Mutants’ and ‘The Mandalorian’ for this week’s SVOD and Electronic Sales Through Top 20.

The New Mutants introduces five teenage mutants — Mirage, Wolfsbane, Cannonball, Sunspot and Magik — who undergo treatments at a secret institution that will cure them of their dangerous powers. Invited by Dr. Cecilia Reyes to share their stories, their memories soon turn into terrifying realities as they start to question why they’re being held and who’s trying to destroy them.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s illegal P2P film and TV content consumption below!

‘Roald Dahl’s The Witches’ takes the first position in this week’s SVOD & Electronic Sales Through film consumption, with ‘Borat 2’ close behind.

On the TV front, the second season of ‘The Mandalorian’ pushes Disney+ ahead from the competition.

‘The Mandalorian’ has been tasked with returning his charge, a child, to its people, the Jedi. He begins searching for other Mandalorians who he believes can help him find the Jedi, and is directed to a rumored Mandalorian operating out of the Tatooine town Mos Pelgo.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s illegal P2P film and TV content consumption below!

‘Borat: Subsequent MovieFilm’ lands in the Top3 of the week, having been released during the weekend, behind of ‘Roald Dahl’s The Witches’ and ‘Love and Monsters’, which keeps #1 in the VOD and “electronic-sell-through” chart.

Released from prison for bringing shame to his country, Kazakh funnyman Borat risks life and limb when he returns to America with his 15-year-old daughter.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s illegal P2P film and TV content consumption below!

‘Love and Monsters’ interrupts ‘Mulan’s’ domination in the VOD and “electronic-sell-through” chart.

‘Love and Monsters’ is set in a monster-infested world, where Joel learns his girlfriend is just 80 miles away. To make the dangerous journey, Joel discovers his inner hero to be with the girl of his dreams.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

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‘Hubie Halloween’ tries to interrupt ‘Mulan’s’ domination in the VOD and “electronic-sell-through” chart.

‘Hubie Halloween’ is set in Salem, Massachusetts on October 31st, where a town’s eccentric, devoted community volunteer (and the good-natured object of his fellow citizen’s derision and meanest pranks), finds himself in the midst of a real investigation, for a real murderer.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

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‘Mulan’ is still at the top on VOD and “electronic-sell-through” charts in the US and second in China, behind the local blockbuster hit ‘The Eight Hundred’.

‘The Eight Hundred’ tells the story of a group of Chinese soldiers and draft dodgers in 1937, who put up a four-day defense of a Shanghai warehouse complex just as Japanese forces are overwhelming China.

Cinelytic tracks global, illegal P2P based file-sharing data for film content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

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‘The Boys’ holds the top position on SVOD, but also piracy, from last week.

The TV show primarily focuses on two groups: the Seven, Vought’s premier superhero team, and the eponymous Boys, vigilantes looking to bring down Vought and its corrupt superheroes. 

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s illegal P2P film and TV content consumption below!

‘Mulan’ is dominating VOD and “electronic-sell-through” charts, but also film piracy.

The film follows Mulan, who to save her ailing father from serving in the Imperial Army, disguises herself as a man to battle northern invaders in China.

Cinelytic tracks global, illegal P2P based file-sharing data for film and TV content. By correlating our data with consumer data we are able to provide deep audience insights for better audience understanding, targeting, and activation.

Check out last week’s illegal P2P film and TV content consumption below!

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Cras arcu enim, auctor eget placerat vitae, pulvinar eu lectus. Nam molestie eros ut enim consequat, nec consequat metus vehicula. Pellentesque venenatis sed metus at accumsan. Nunc hendrerit arcu sed sapien efficitur, a pellentesque sapien tristique. Aenean quis nibh euismod, molestie elit quis, tincidunt velit. Integer vel urna quis nibh cursus pretium. Sed iaculis rhoncus neque sed suscipit. Integer aliquam nisi arcu, nec tincidunt ipsum posuere non. Proin mollis velit eu lobortis ullamcorper. Quisque ultricies, ex non accumsan blandit, eros dolor sodales purus, non pharetra nunc lectus in sapien. Suspendisse ac tortor ullamcorper, rutrum lacus non, accumsan mi. Donec ultrices convallis neque, dictum bibendum felis ullamcorper ut. Vestibulum rhoncus urna nisi, id elementum nisi laoreet nec. Sed at enim ut nunc ultricies tincidunt. Aliquam sagittis purus est.

Aenean porttitor tortor faucibus sapien ornare consectetur. Etiam at tellus ipsum. Donec posuere dui ac ante sollicitudin, eget sodales massa eleifend. Nulla dui arcu, placerat et nunc vel, tempor tincidunt ipsum. Morbi aliquet pharetra lorem, sit amet egestas erat aliquam eget. Ut tristique metus ut lectus fermentum, id semper nunc vulputate. Integer feugiat elementum tellus, a posuere ex dictum a.

Integer a justo sed nunc imperdiet tempus. Proin ac venenatis diam. Cras neque arcu, viverra a dui eu, sollicitudin porttitor sem. Fusce sit amet nisl ut tellus efficitur vulputate at in tortor. Integer porta elit lectus, sed egestas urna gravida ut. Sed vitae ipsum at orci sodales dictum. Curabitur vulputate, orci non pellentesque tempor, odio sapien bibendum massa, ut gravida nulla urna vel nunc. Duis ac turpis tempus, tincidunt eros non, porta diam. Aenean porta varius ipsum, ut dignissim leo lacinia quis. Morbi pharetra, ante id aliquam maximus, elit massa auctor libero, ut auctor velit nunc eget nisl. Etiam vestibulum hendrerit porttitor.

Sed non rhoncus sem. Proin quis ullamcorper nibh. Nam ac vestibulum libero, vel ultricies purus. Ut ut pretium augue, eu mattis augue. Nam sit amet tempor sapien. Duis sodales augue ut purus tristique fermentum. Nulla bibendum mollis eleifend. In tincidunt ut elit quis sagittis. Phasellus id ultricies mauris, sit amet sollicitudin mauris. Phasellus sodales nibh aliquam, dictum diam et, egestas eros.

Nulla at libero ut eros luctus sollicitudin pharetra non enim. Sed quis velit at ex congue semper quis pellentesque ante. Fusce iaculis, tortor eget fermentum vulputate, ipsum augue finibus ex, eu ullamcorper dui orci eget sem. Nam sed lectus iaculis, tempor nulla in, ultrices ex. Curabitur at ex fringilla lacus sollicitudin semper. Cras bibendum dui ornare tellus maximus, ac facilisis dolor interdum. Ut iaculis sollicitudin felis quis ultrices. In porta maximus finibus. Nullam non accumsan lectus. In hac habitasse platea dictumst. Quisque ac ante sed leo fermentum convallis convallis ac elit. Pellentesque nulla dolor, viverra ac urna quis, maximus lobortis arcu. Donec suscipit arcu in scelerisque efficitur. Donec eu pharetra nisl. Phasellus a mauris orci. Nunc nec pulvinar massa.

Wishing you had access to talent ideas/insights without spending a lot of time searching websites, calling sales agents, or digging through old files?

Cinelytic’s new TalentScore™ uses the power of big data to generate economic performance scores that pinpoint talent value by profession, genre, country, and even release window for 550,000 global actors, directors, writers, and producers in real-time!

Below is the talent profile for Oscar Isaac who is part of market title ARMAGEDDON TIME:

A Film Industry Analysis

When entertainment industry insiders and outsiders comment on the use of data in the sector, I often hear a fear expressed that it will lead to more sequels, remakes / IP based content versus original content and therefore will have a negative effect on creativity.

This view could not be further from the truth. It is often based on a limited understanding of how to use data correctly. I will discuss the film industry from a business perspective and how the right combination of advanced data analytics combined with creativity will benefit original content and create a more sustainable industry.

The industry’s struggle with changes in consumer behavior

The film industry can be classified as a high-risk industry as any new project needs to be financed upfront, then produced, marketed and distributed. It can take two years from the financing stage to the initial release plus another two/three years of ancillary release windows such as home video and TV to generate the bulk of revenues. Thus, studios and production companies/financiers need to prepare for the majority of film revenue to be generated over a five year period.

This prolonged revenue/return time frame creates an industry risk profile that requires studios and independent content financiers to understand and diversify risks in order to continue as a going concern. At times when revenues were plentiful, such as during the days of strong high margin DVD sales, Studios were able to create healthy bottom lines and placed more “bets” on original ideas.

In the past ten years, DVD revenues or “physical home video” have evaporated from $16.2bn in 2010 to $4.7bn in 2019 and have yet to be replaced by its digital counterpart (See Graph 1).

IP based content as the solution?

The loss of these high margin revenues has made it more difficult for film investments to be recouped and increased financial risks for all companies involved. Large parts of streaming revenues were consumed by new entrants such as Netflix and Amazon. Studios have resorted to focusing on content based on known IP such as comic books, remakes and sequels to be able to tap into built-in audiences and marketing appeal. This strategy worked well for many studios and was embraced by audiences — expressed in the enduring success of a variety of franchises to date. These strategies did not rely on sophisticated data strategies but on the simple need to mitigate risk (See Graph 2).

With the risk of rising franchise/remake fatigue and increased competition for younger audiences from new technologies whether video games, apps and social media, Studios will have to find new frameworks to assess the economic viability of original content.

While the disappearance of DVD revenues was negative, the digitalization of data collection can be seen as a positive. Data availability has broadened substantially allowing for better than ever insight into what content works and why. The famous phrase “nobody knows anything” is no longer valid. The key is knowing what to do with the gigantic amount of data generated every day. The good news is that recent developments in new analytics technologies allow for new and more refined ways to use data when assessing the business case around Film and TV content.

This has already occurred successfully in other creative industries such as marketing and fashion. What made studios and financiers resort to “safe IP” strategies is the fact that they often do not have a sufficient framework to assess new and original ideas. This problem can be solved by combining the vast amounts of data available with modern analytics technologies such as ML/AI that help with the number crunching for content prototyping. Embedded in software, these technologies can provide decision-makers with real-time tools and inspire confidence to assess all types of content from the idea stage.

And let’s be clear: The key part that needs to work in order for content to be successful is the story and creative execution — data analysis can only be additive for creative decisions but can make a huge difference for more successful business decisions. It is crucial to know how to use and integrate data into work processes — especially in creative industries.

Independent Film in dire straits

An additional benefit of using data is an increased level of transparency. Certain segments of the Film industry are broken and solutions can only be found by looking at the data. For example, the truly independent Film sector is in dire straits. Today only 3–4% of independently produced films in the US break-even i.e. pay back their investment. Every year the Sundance Festival receives submissions that total $3bn in production value. These titles want to participate in the festival to secure distribution in the US theatrical market. The issue is that the independent space in 2019 only garnered $100m in net theatrical revenues (Box Office net of exhibitor share and distribution fees & expenses).

Meaning that of the $3bn in production value that applied to Sundance, there existed only $100m of net revenues to contribute back to the investment. Ancillary revenues including Home Video and TV might double these net revenues to a total of $200m, but not nearly enough to recoup the $3bn production value spent upfront (See Graph 3).

The independent sector largely ignores data for various reasons. It requires 5–8 different companies (producer, financier, sales agent, distributor, exhibitor…) with completely different business models to bring a story to the screen, which makes it nearly impossible to share data and create a film business case that can be recouped successfully. Some companies even benefit from the lack of transparency — I often heard the phrase “sell it, don’t smell it”. Most companies simply do not have the knowledge of how to use data in the right way. In addition, ignorance and stubbornness to hold onto traditional/legacy processes have created an industry in which creative potential is killed as many stories never reach their audiences and investors lose billions every year. This situation leads to numerous failed/troubled film businesses such as Broad Green, Open Road, Aviron, Worldview, Annapurna to name a few.

A brighter future

Incorporating data insights in the right way will provide new and better frameworks that allow studios and independent companies to maximize success— especially with original content. I think that the current crisis provides an opportunity to reflect on our values but also on the state of the industry and how business is done. I strongly believe that having an open mind towards new data-driven technology solutions combined with industry experience and creative instinct will create a more sustainable industry that will benefit all.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Cras arcu enim, auctor eget placerat vitae, pulvinar eu lectus. Nam molestie eros ut enim consequat, nec consequat metus vehicula. Pellentesque venenatis sed metus at accumsan. Nunc hendrerit arcu sed sapien efficitur, a pellentesque sapien tristique. Aenean quis nibh euismod, molestie elit quis, tincidunt velit. Integer vel urna quis nibh cursus pretium. Sed iaculis rhoncus neque sed suscipit. Integer aliquam nisi arcu, nec tincidunt ipsum posuere non. Proin mollis velit eu lobortis ullamcorper. Quisque ultricies, ex non accumsan blandit, eros dolor sodales purus, non pharetra nunc lectus in sapien. Suspendisse ac tortor ullamcorper, rutrum lacus non, accumsan mi. Donec ultrices convallis neque, dictum bibendum felis ullamcorper ut. Vestibulum rhoncus urna nisi, id elementum nisi laoreet nec. Sed at enim ut nunc ultricies tincidunt. Aliquam sagittis purus est.

Aenean porttitor tortor faucibus sapien ornare consectetur. Etiam at tellus ipsum. Donec posuere dui ac ante sollicitudin, eget sodales massa eleifend. Nulla dui arcu, placerat et nunc vel, tempor tincidunt ipsum. Morbi aliquet pharetra lorem, sit amet egestas erat aliquam eget. Ut tristique metus ut lectus fermentum, id semper nunc vulputate. Integer feugiat elementum tellus, a posuere ex dictum a.

Integer a justo sed nunc imperdiet tempus. Proin ac venenatis diam. Cras neque arcu, viverra a dui eu, sollicitudin porttitor sem. Fusce sit amet nisl ut tellus efficitur vulputate at in tortor. Integer porta elit lectus, sed egestas urna gravida ut. Sed vitae ipsum at orci sodales dictum. Curabitur vulputate, orci non pellentesque tempor, odio sapien bibendum massa, ut gravida nulla urna vel nunc. Duis ac turpis tempus, tincidunt eros non, porta diam. Aenean porta varius ipsum, ut dignissim leo lacinia quis. Morbi pharetra, ante id aliquam maximus, elit massa auctor libero, ut auctor velit nunc eget nisl. Etiam vestibulum hendrerit porttitor.

Sed non rhoncus sem. Proin quis ullamcorper nibh. Nam ac vestibulum libero, vel ultricies purus. Ut ut pretium augue, eu mattis augue. Nam sit amet tempor sapien. Duis sodales augue ut purus tristique fermentum. Nulla bibendum mollis eleifend. In tincidunt ut elit quis sagittis. Phasellus id ultricies mauris, sit amet sollicitudin mauris. Phasellus sodales nibh aliquam, dictum diam et, egestas eros.

Nulla at libero ut eros luctus sollicitudin pharetra non enim. Sed quis velit at ex congue semper quis pellentesque ante. Fusce iaculis, tortor eget fermentum vulputate, ipsum augue finibus ex, eu ullamcorper dui orci eget sem. Nam sed lectus iaculis, tempor nulla in, ultrices ex. Curabitur at ex fringilla lacus sollicitudin semper. Cras bibendum dui ornare tellus maximus, ac facilisis dolor interdum. Ut iaculis sollicitudin felis quis ultrices. In porta maximus finibus. Nullam non accumsan lectus. In hac habitasse platea dictumst. Quisque ac ante sed leo fermentum convallis convallis ac elit. Pellentesque nulla dolor, viverra ac urna quis, maximus lobortis arcu. Donec suscipit arcu in scelerisque efficitur. Donec eu pharetra nisl. Phasellus a mauris orci. Nunc nec pulvinar massa.

Competition in the entertainment landscape has rapidly amplified leading some studios and independent content companies to face an existential moment. But with the emergence of new tools, technologies, and data sources, there is now a chance to hold the key to success. This advancement of accessible resources is the fuel to a data-driven culture that has the potential to be the genesis of innovation by offering insights into understanding the entertainment sector’s audiences on a micro-level.

Being data-driven does not mean that data is meant to be blindly followed or challenge existing decisions, but rather stimulate an informed intuition. A data-driven culture creates an environment where your creative instinct is strengthened from the support of information-driven decision making and fact-based innovation. Data can be thought of as a roadmap to efficiently identifying your content-customer fit to meet real-time consumer demands. Companies that choose not to adopt a data-driven culture are failing to realize their full potential in transforming into industry leaders with an optimized content pipeline.

But, why is it so hard to adopt a data-driven culture for some?

The greatest hurdle is not technical, but rather cultural.

Here are 5 steps to jumpstart the journey of creating a data-driven culture:

1. SEEK OUT A CATALYST LEADER

Culture change is a key role of catalyst leadership. Catalyst leaders are forward thinkers, that can ignite action and change. Creating a data-driven culture is a gradual process that requires commitment from employees company-wide, which calls for an internal catalyst leader who can help sponsor the change so others may follow. The goal for the catalyst leader should be to create a cultural framework of adopting a new mindset and behaviors to advance the company’s data maturity to enhance the consumer experience overall.

2. SET A DATA GOAL

Data is an asset that can show relevant trends, predictions, and projections. Ask yourself, “What is the data goal of the project?” It is imperative to clearly outline your data goal to help keep you strategically guided and productive or else the data will prove to be ineffective. Having a clear understanding of your purpose is the beginning of opening up a new world that enables you to connect with consumers in new and innovative ways.

3. USE THE RIGHT TOOLS, TECHNOLOGIES, AND DATA SOURCES

There are a plethora of available tools, technologies, and data sources that can be used to help reach your data goal. Research and discover what accessible resources are right for you. The accessible resource you select should help you achieve your data goal whilst being a tool for strengthening and building more engaged relationships with your audience. For example, at Cinelytic we offer multiple data sources and analytic/decision-support tools, including a proprietary, global, P2P based file-sharing data set of film and TV content.

This data set contains 150 million P2P transactions per day and is a strong proxy for digital OTT consumption across all platforms. We correlate our P2P data with consumer demographics data to provide deep audience insights to help our clients better understand, target, and activate their audience.

4. INCREASE DATA LITERACY

Data is useless if your team is unable to successfully access, analyze, and interpret applicable insights.Empower your team with training, courses, and visualizations of the data. From a creative standpoint visualizing the data may be a valuable asset for your team to see, digest, and understand how to use the data to inform their decisions. It may also help to humanize the data. Data is not intangible, it is from real, breathing individuals who have acted in a particular way that produced detailed, actionable insights into consumer demands.

5. INCLUDE DATA INSIGHTS INTO THE DECISION-MAKING PROCESS

An insight that drives action can be very valuable and advantageous to a company, but not every company has taken a path to ensure that decision-making appropriately reflects data insights. To effectively utilize actionable insights, create decision-making processes that integrate your data-driven objectives with creative instincts. When you start to request that all decisions be supported by data you are choosing to follow a path towards less risk and greater success.

Be willing to do things differently. Companies that leverage a data-driven culture by using an informed intuition have the opportunity to create creative and smart strategies to scale and evolve. So, if you are looking to gain a competitive edge, the next time you have to make a decision about your content, base it on your creative instincts supported by data insights.

OTT consumption has become more relevant than ever with major releases such as TROLLS going straight to VOD in these unprecedented times.

Cinelytic tracks global P2P based file-sharing data of film and TV content, which is a strong proxy for digital OTT consumption across all platforms – demand was up 30% during the quarantine period.