23/01/2023 - RAHUL PATEL
How are studios balancing theatrical exclusivity with early SVoD premieres?

Between January and November 2022, Disney, Paramount, Universal and Warner Bros. between them distributed 36 US-produced movies* with an exclusive theatrical premiere. When the exhibition industry was recovering from the COVID-19 pandemic in 2021, several studios negotiated with exhibitors a minimum 45-day window of theatrical exclusivity before their movies arrive on SVoD platforms. As a result, approximately seven weeks between theatrical and SVoD premieres is now common, regardless of how well the movie is performing in cinemas.

This window was greater than seven weeks for only a third of the observed titles. Of these 12, Universal accounted for five – the largest share among the four major distributors. With 209 days, Paramount’s Top Gun: Maverick had the longest period between theatrical and SVoD premieres, and earned $719m at the North American box office. Warner Bros.’s The Batman debuted on HBO Max just 45 days after its theatrical premiere, sooner than Jurassic World: Dominion and Black Panther: Wakanda Forever, despite earning more at the box office in its fourth week of release than both of those movies. This is not a product of Warner Bros.’s inflexibility around the 45-day window; Elvis premiered on HBO Max 70 days after its initial release in cinemas, and DC League of Super-Pets 59 days.

Studios’ strategies differ between movies because of the role they can play in subscriber attraction and retention for direct-to-consumer services. Early SVoD debuts are also a way to compete with Netflix’s dense release slate – hence the popularity of the minimum window of theatrical exclusivity. 

In the cases of The Batman on HBO Max and Doctor Strange in the Multiverse of Madness on Disney+, there is the additional factor of consumers’ anticipation for titles that fall within these platforms’ core content brands. If DC and Marvel are key to fanbases continuing to subscribe to a service, there is further pressure for Warner Bros. Discovery and Disney to rebalance their strategies in favour of earlier SVoD arrivals. On the other hand, an adult-targeted Drama such as Elvis is less vital to the HBO Max brand, allowing for greater flexibility to extend the theatrical exclusivity significantly beyond 45 days, especially if the title is performing well in theatres.

Disney has shown a willingness to wait more than 45 days before bringing a title to SVoD – the Black Panther sequel will arrive on Disney+ 80 days after its theatrical premiere – but not to the same extents Paramount did with Top Gun: Maverick or Universal with Jurassic World: Dominion and Nope (119 days each). However, a longer span akin to these releases may be considered for Avatar: The Way of Water. The title exists outside of Disney+’s core content brands (Classic Disney, Marvel, Star Wars, Pixar and National Geographic) and is expected to continue to earn significant revenue at the box office far beyond its initial release; takings for the Avatar sequel dropped just 19% in its second week of release relative to the first, compared to Black Panther: Wakanda Forever’s 54%, Thor: Love and Thunder’s 64% and Top Gun: Maverick’s 33%. Additionally, Avatar: The Way of Water grossed $67m in its fourth week of release.

*Includes only those releases that were in theatres for more than 30 days, opened with a wide release and had an SVoD debut date announced at the time of writing.

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