Netflix to buy Warner/Discovery

[Ed Gordon]

I caught a headline that Netflix just upped it's offer to "all cash" 72 million. We'll see what Paramount does I guess?

Correction: "...Netflix just upped it's offer to "all cash" 72 billion. We'll see what Skydance does I guess?"

I think this "merger" will not help exhibitors at all. I hope the regulators deny this merger.

It is ironic that MGM was created by a theater owner:

Metro Pictures was bought by Marcus Loew in 1920 as a supplier for his theater chain. Later, in 1924, it merged with Goldwyn Pictures and Louis B. Mayer Productions to form Metro-Goldwyn-Mayer (MGM).

-Wikpedia

Would it be a good thing if AMC bought Warner? Was it a good thing for Disney to buy Fox?

I think the lack of new features to show is a major factor in the closing of so many theaters.

Jeff Brein, managing partner of Far Away Entertainment, a Bainbridge Island-based company that operates a handful of cinemas around the state including the Varsity, said Tuesday the venue would close Thursday. After that, there will be no more movie theaters in the U District.

“Declining revenues over the years, increasing operating costs and less studio releases with much shorter theatrical windows — the time between theatrical release and movies available on streaming and pay-per-view” — all contributed to the closure, Brein said in an email Tuesday afternoon.

“We have never fully recovered from the pandemic when we were forced to close for almost a year,” Brein said in a Tuesday news release in which he cited additional reasons for the closure, including a series of Hollywood labor disputes, complying with the city of Seattle’s minimum wage, increased utility and food and beverage costs, shared revenue with studios and greater competition from streaming services. All of that has “made it increasingly difficult to operate the Varsity as a viable business,” he said.

Credit: Seattle Times

The short window for theatrical release does not help, but movie theater attendance has been declining for decades now. If streaming is preferred by the audience there is not much a theater owner can do. Now that movie theaters can be owned by movie producers, we might see a change in the attitude of movie producers towards theatrical exhibition. The audience for theatrical exhibition know that theaters make there money from high concession prices and advertising, which has a negative impact on theater attendance. It is a no-win situation...

Even Jeff Brein thinks there is still some hope...

Though the Varsity will close its doors, Brein said in the news release they will leave all their operating equipment behind “in the hope that the theater remains available to show digital movies with digital sound. We are anxious to identify any interested parties who may want to exhibit film, live entertainment or special events.”

[Ryan Gallagher]

Correction: "...Netflix just upped it's offer to "all cash" 72 billion. We'll see what Skydance does I guess?"

Haha, yeah good catch. B as in Billion:

Trying a youtube link with a timestamp, may not work, time 7:14 intended link.

[Mike Blakesley]

The short window for theatrical release does not help, but movie theater attendance has been declining for decades now.

You explained the second part of that sentence in the first part.

When did it start declining? Well, there was a major drop in the '80s when home video became a big deal, but we clawed our way back from that. Starting in the '90s, as the window has gotten shorter, attendance has declined. It's just simple math.

But look at Disney: They are STILL advertising "see it in theaters" for Zootopia 2, and look what's happened. It's a massive success, with no video release date being announced yet. It's been out over 2 months and still selling tickets.

Paramount held Top Gun 2 off of video for several months, with the reward being one of the highest grossing movies in history.

At the same moment, Universal chopped Wicked 2 off at the knees by putting it in on-demand home video only a month after its release.

[Marcel Birgelen]

When did it start declining? Well, there was a major drop in the '80s when home video became a big deal, but we clawed our way back from that. Starting in the '90s, as the window has gotten shorter, attendance has declined. It's just simple math.

Back in the 80s, the advent of home video opened up an entire new market for the studios. It allowed many movies to recoup their initial cost by opening up a second market. For the movie industry, the rental and retail releases were often just as important as the initial release.

The fact that movies didn't always need to make their money back during their initial theatrical release, allowed for more creativity. Studios were far more willing to put their money into unproven, new stories, ideas and concepts. The idea of the mega-franchise was still a very rare concept. Star Wars might have been one of those exceptions, although it probably was the financial success of the prequels that really got this train going.

This relative symbiosis resulted in the revival of cinema back in the 1990s and into the early 2000s. It's still a mystery to me why this system, that worked pretty well for over a decade, suddenly got torn down by the movie industry. While there certainly were technical challenges, stuff like rampant piracy, much of that was caused by incompetence inside the studios own release channels. It's not because we nowadays have the technology to stream the same movie around the globe day and date, that this practice suddenly has become a profit maximizing strategy...

[Ed Gordon]

Arguably the biggest fear among industry insiders is the possibility that the pandemic only accelerated a downward trend that has in fact been going on for years, merely concealed by ever-rising ticket prices. Ticket sales data from industry tracking site The Numbers reveals a slow but steady downward trend in theater admissions since 2002, when 1.58 billion movie tickets were sold across the U.S. and Canada. By 2019, that number had dropped to 1.23 billion, all while box office earnings rose from $9.16 billion in 2002 to $11.26 billion in 2019.

One thing putting a question mark behind the hoped-for mass return to movie theaters is the softening of the exclusive theatrical release windows during the pandemic. The widespread concern is that once consumers have gotten used to enjoying the latest blockbusters in the comfort of their own home, it won’t be easy to get that particular genie back into the bottle.

Source:: https://www.statista.com/chart/25234...north-america/

image.png


Number of movie tickets sold in the United States and Canada from 1980 to 2024 (in millions)
image.png

Ticket sales in the US and Canada have been on a decline since 2002

[Mike Blakesley]

When you consider the myriad of other entertainment options people have -- besides streaming movies, things like games, standard TV shows, concerts, and just plain scrolling....it's probably a wonder we get as big a piece of the pie as we do.

But the stupid window decline is for sure not helping.

[Steve Guttag]

It is two primary things:

• Movie quality (are studios making what people want to see).
• Theatrical windows. If the customer knows that it will be "free" in just a few weeks (if not days), why pay for the whole hassle of going to the theatre?

[Bobby Henderson]

Back in the 80s, the advent of home video opened up an entire new market for the studios. It allowed many movies to recoup their initial cost by opening up a second market. For the movie industry, the rental and retail releases were often just as important as the initial release.

The fact that movies didn't always need to make their money back during their initial theatrical release, allowed for more creativity. Studios were far more willing to put their money into unproven, new stories, ideas and concepts. The idea of the mega-franchise was still a very rare concept. Star Wars might have been one of those exceptions, although it probably was the financial success of the prequels that really got this train going.

I don't agree the home video boom of the 1980's gave the movie industry more creative freedom. At best it helped low budget trashy movies and high brow independent releases get more visibility. Those were movies that didn't get booked onto large numbers of cinema screens like a wide release from a major studio.

The major Hollywood studios were at their most creatively adventurous from the late 1960's to the early 1980's -just before video rental stores spread across the nation. I don't have to list al the great films and ground-breaking blockbuster hits released during that golden era. "Star Wars" was one of those greats. But the success and cultural phenomenon of "Star Wars" carried long term consequences. By the time the home video rental boom was taking place Hollywood studios were already obsessed with creating blockbuster franchises. We've been stuck in that mode ever since.

Ironically, the area where movie studios (or whatever you want to call them) are now most creative is series TV. They're able to take more chances with the story lines, including giving viewers unhappy endings. We used to see Hollywood movies have really unhappy endings. Remember how "Chinatown" ended? Damn.

It is two primary things:
• Movie quality (are studios making what people want to see).
• Theatrical windows. If the customer knows that it will be "free" in just a few weeks (if not days), why pay for the whole hassle of going to the theatre?

Exactly. I don't know why so many people find this hard to understand. It's especially obvious when looking at the history of these theatrical windows and how the experience of watching movies at home has changed.

These very short theatrical release windows are only a recent phenomenon, brought on in part by the covid pandemic. Movie studios had already been inching in that direction, but the pandemic gave them the excuse to chop what remained of the window down to nothing. I can still remember having to wait at least several months or even as long as a year for a movie to go from its theatrical debut to appearing on video store shelves. Theatrical releases used to spread across the globe in various stages. Now most new movies are released globally all at once. In America movies had their first run and then a second run in bargain locations. Then they would be gone for awhile before reappearing in video stores. And the video stores would have first crack on the home revenue end. Remember "rental pricing" for VHS tapes? The sell-thru retail VHS tapes wouldn't be available until weeks or months later. The DVD platform got rid of that model. But it still took a long time, often more than a year, for a movie to go from debuting in theaters to appearing on premium cable TV channels.

Today a movie can go from its theatrical debut to appearing on HBO Max in about a month.

The other problem is there is no longer a quality penalty to suffer for skipping a movie's theatrical release.

In the past it was a major quality downgrade to watch a movie on VHS tape. Low resolution 4:3 ratio image and 2-channel stereo audio, if not mono. Scope movies were often panned and scanned. DVD upped the quality a good bit, but it was still a 480p image. The proliferation of big HDTV monitors and newer playback formats like Blu-ray helped the home theater experience radically close the gap with theaters. I think the quality gap shrank a lot more as theaters were forced to adopt digital projection. Today there is little if any noticeable quality difference at all between the cinema and a good home setup. I can skip a movie's theatrical release, watch it at home instead and not feel like I missed anything. The letterboxed image at home looks just like the letterboxed image in the cinema.

Theaters are getting hit with a double-whammy of sorts. The short release window is one factor. Negligible quality difference between cinema and home platforms is the other factor. Very simple.

[Ed Gordon]

It is two primary things:

• Movie quality (are studios making what people want to see).
• Theatrical windows. If the customer knows that it will be "free" in just a few weeks (if not days), why pay for the whole hassle of going to the theatre?

Theaters need studios to provide content. The studios hold all the cards; they don't need theaters. They can go straight to streaming and still make money. Theaters need to organize and demand that studios recognize the value theaters add to the studio's product. Movies in theaters loose value as soon as they go the streaming where the content can be copied and made available to all on the "dark web", free of charge.

It seems to me that the desire to move content from theaters to streaming is based more on short term greed, rather than being a business decision to maximize profit.

[Bobby Henderson]

The movie studio bosses apparently don't realize this, but the commercial cinemas give their movie product a certain kind of legitimacy. To me, a movie that does not play in movie theaters is a TV show. Not a movie. There are plenty of TV shows getting dressed up to look like movies. They're shot with anamorphic lenses and letterboxed in 'scope ratio. But they're still TV shows despite the cinematic window dressing.

If these guys are so stuck-up to think no one cares about theaters anymore -well here's a news flash for them. No one really cares all that much about these various streaming services either. The younger consumers these executives are chasing after are quite the fickle bunch. Too many of those younger consumers have barely any attention span at all. They subscribe and then cancel various streaming services frequently. Most of them feel alright with scrolling through short videos on YouTube and TikTok. They can't pull their gaze from their smart phone screens to focus on a TV screen for any sustained amount of time at all. The viewership on regular YouTube dwarfs that of any movie/TV streaming platform. So if the movie studio bosses want to let cinemas die and put all their eggs into the TV viewing basket they may end up with a customer base even smaller than what they have now. I guarantee they lost a LOT of money letting the retail movie disc platform wither like they did.

[Steve Guttag]

Theaters need studios to provide content. The studios hold all the cards; they don't need theaters. They can go straight to streaming and still make money. ...

You have ZERO evidence that they make any money streaming movies. Even Netflix would have a hard time showing a cost/return to their feature films on streaming. How many people sign up for a streaming service to see a particular feature film? Zero. How many people keep their streaming subscription due to a particular feature film? Zero again. How many streaming services are profitable, at all? 2.5 (Netflix and Disney...sort of and I classify HBO a bit differently as they really stemmed as a paid service from the get-go nearly 50-years ago...their model has been somewhat similar just about the entire time). Serialized content is what gets people to sign up. They want to see a collection of things. NOBODY enjoys doom scrolling hoping to find a movie that they happen to have and that they want to see.

Streaming is where movies lose all of their value . You can spend $200M on a feature film and it instantly become no more valuable than It's a Wonderful Life the moment you set it right beside that title on your streaming platform. Feature film are just "filler" on a streaming platform.

Netflix better watch itself. I believe YouTube will suck its subscribers away. More and more stuff is becoming available on YouTube and its stuff doesn't just disappear like it does on the streamers. Plus, there are millions, if not billions of content creators out there. They already are winning on the "number of hours watched." Advertisers are only going to pay if you have people seeing the ads. The eyeballs are moving to YouTube.

[Bobby Henderson]

Yeah, no one signs up to a streaming service to watch a specific Hollywood movie. Streaming platforms are where new movie releases from studios go to be quickly forgotten. They get dumped in the pile with all the other stuff. Good luck with all the scrolling thru the user interface to find it -if you even remember it!

I can easily remember lots of movies from the 1970's, 1980's, 1990's and on into the 2000's. That's because those movies had a fairly long shelf life. They stayed available on movie screens for months, if not years in the case of 1970's films. Then they had high visibility on video store rental shelves and retail store shelves. There were different ad campaigns for all their different platform runs, even when they moved to premium cable channels.

Today a movie can be released early this year in 2026 and be completely forgotten well before 2027 arrives. New movies have little if any retail presence after their very brief run in commercial cinemas.

Every streaming platform (be it Netflix, Hulu, Prime Video, HBO Max, Disney+, etc.) puts most of their promotional muscle behind series TV shows. You can watch "Sinners" or "One Battle After Another" on HBO Max. But it seems like more people are tuning into that service to watch "Heated Rivalry." I don't understand how HBO seems to have such good luck with its series TV content.

[Ryan Gallagher]

Do people still "rent" movies on the various digital platforms? I do, but I might be a weirdo. If I'm with friends and we get an itch, or there is something specific I'm introducing to others... I'll pay the rental if it's not on the one or two stream locations I have access to. I've tended to favor apple for rentals, but amazon and youtube work too. If I think i'll watch it again I buy it (the price difference is usually pretty minimal for older films).... I'm not a physical media person for film (at home), even though I believe in it being the best option. I have enough contemporary vinyl to offset that mis-calculation.

[Marcel Birgelen]

I'm not paying to rent or even buy a movie on a digital platform, I still buy Blu Rays so, maybe I'm the real weirdo... especially since I did my little part to create some of those early platforms... I also RIP all the content directly, in case the last device that holds a master key that can play this stuff goes the way of the dodo and the dinosaur. And yeah, I still buy CDs... If it's on someone else's computer, you don't own it!

I don't agree the home video boom of the 1980's gave the movie industry more creative freedom. At best it helped low budget trashy movies and high brow independent releases get more visibility. Those were movies that didn't get booked onto large numbers of cinema screens like a wide release from a major studio.

The major Hollywood studios were at their most creatively adventurous from the late 1960's to the early 1980's -just before video rental stores spread across the nation. I don't have to list al the great films and ground-breaking blockbuster hits released during that golden era. "Star Wars" was one of those greats. But the success and cultural phenomenon of "Star Wars" carried long term consequences. By the time the home video rental boom was taking place Hollywood studios were already obsessed with creating blockbuster franchises. We've been stuck in that mode ever since.

There were quite a few movies that never went anywhere during their initial theatrical release and only became classics after they were released on rental and home video. If they weren't released on those mediums, they probably were entirely forgotten. This even includes some movies from before the 1980s, that only became popular after they became more widely accessible on home media.

Was there a lot of trash in the 1980s and 1990s? Certainly, but so there was in the 1960s and the 1970s, we just tend to forget about those. While the 1970s are considered by some to be the golden era of film, it's the same era that gave birth to the exploitation film, the grindhouses, the twinning. tripling and quadrupling of many great movie houses... In Germany, they even have a name for those kind of cinemas, which were typical for the 1970s and 1980s, Schachtelkino (translates roughly to Shoe-box cinema):

A4ABCD3A7D0B4498B85D0EF94BB24A98_kino_4.jpg

Anyways... while movies used to have legs in the cinema in the bygone past of the 1960s and 1970s, they still could have legs on home media in the 1980s, 1990s and 2000s... Also, if you look at the statistics, the 1990s and early 2000s were the golden years of the exhibition industry (with the exception of the pre-TV era, but back then cinema fulfilled also other purposes.). All of that went away. A movie has one single shot to make some money in the cinema and then gets shoved off to the big all-you-can-eat buffet called streaming.

[Steve Guttag]

... I don't understand how HBO seems to have such good luck with its series TV content.

It isn't "luck." HBO makes a good show. Those that they buy are good shows. I've done premiers for HBO for over 30-years and they consistently put out a quality product. That is what they sell. That is what they've sold for a long time. If HBO makes something, it is at least worthy of a look. Mind you, I'm not into all of the genres. I didn't watch Game of Thrones nor have any desire to see it now. I did do premiers for it, including the last episode, for which I had more security than most any "Hollywood" premiere.

But this is why I don't classify HBO with the other streamers. They predate streaming with their brand of content. It was just at the very beginning of HBO where they were the place one could watch Hollywood movies, in one's home but that was just the early years before they made their own stuff. Their docs are top notch, their series are top notch. They're just a class act all of the way around. Even WB learned that HBO was the brand of choice...not "Max." I hope, whomever gets WB that they leave HBO alone and just let its group of phenomenal people to keep doing what they do.

As to renting content via Amazon/Apple...very rarely for me. If I want to see something, I get it on physical media and then it is "mine" to watch whenever I want and wherever I want. I love documentaries. This is an area where streaming wins. Docs are, by their nature, for a limited audience that are interested in the subject matter. A streaming platform can "find its audience" in a way that they couldn't in a cinema, unless the subject matter had very broad appeal. Even then, it would likely be up to your local "art house" to book the movie.