Proof that Studios (and Streamers) NEED to Release Films in Theaters
11 charts detail the financial illogic of the present model
Before 2022, the streamers’ movie boom existed in a model entirely of its own creation.
They could — and did — spend fortunes making movies or acquiring films from other studios. They could skip theaters entirely, put films out exclusively on their streaming services and tout gigantic viewership numbers. And whichever way they went, they’d claim victory!
Even before the pandemic, Netflix, Amazon and Apple decided to skip the theatrical window, and most analysts praised them for their boldness. Disney+ and HBO Max ended up following their path on some of their biggest titles. And Wall Street rewarded them to boot.
Even if analysts couldn’t explain how it worked, they all just knew that it did.
Well, the headlines from the last few weeks show that some streamers may have seen some wisdom in the other side of this argument:
Frankly, this has been a long time coming. Blowing up the theatrical and home entertainment business models never added up.
But as much as I railed, I didn’t have the data to back it up.
But I have it now! Over the last three years, I’ve collected every data point from Nielsen’s weekly Top 10 charts. I’ve collected the box office, IMDb, Wikipedia pageviews and Google Trends data from the top films of 2022.1
I can now answer a simple question:
Do films do better on streaming when they open in theaters, or go straight-to-streaming?
And the answer couldn’t be clearer. Theatrical releases do much, much, much better than films that go straight-to-streaming and, as a result, drive more value for streamers (and make more money in the traditional sense for studios). I knew this to be true, but when you lay out all the available data, the difference is so stark, so brutal, it’s not even a debate.
Still don’t believe me? Well, take a look: