Following Universal and AMC’s agreement to allow digital title release after only 17 days in cinemas, and Disney’s move to release Mulan onto streaming service Disney+ for a US$30 fee in select markets, many have questioned the future of traditional theatrical distribution. But as the studios adapt to new models to distribute their titles, and as the sector seeks to rebuild after lockdown, what will be the impact on overall revenues?

Ampere has sought to model various scenarios around a mid-tier movie release across its lifespan, comparing the market in 2019 to the one we anticipate in 2021, looking both at total revenue generated across multiple platforms and the studio’s share of that. In our model, a mid-sized title that in 2019 would have generated $247m lifetime revenue for the studio is now likely to generate $216m, a drop of around 13%. These losses will make it imperative that studios continue to experiment with different release strategies to generate higher revenues for their upcoming releases.

Assumptions for 2019: $440m in revenue

1. From theatrical, the film would earn $100m domestically and $150m internationally 
2. The film would generate $80m from home entertainment sales domestically and $60m from international transactions
3. The film would generate $20m from SVoD and pay TV content deals domestically and the same internationally 
4. The film would generate $5m from free TV content deals domestically and the same internationally

Assumptions for 2021: $376m in revenue

1. As a consequence of screen closures and changes in consumer habits, Ampere expects the film to generate 80% of the theatrical income it would have made in 2019
2. We forecast that global home entertainment revenues will also be lower, so for 2021 the retail and rental revenues will be reduced by 10%
3. Global revenues from 1st pay services and free TV remain as per the 2019 scenario, thanks to longer-term licencing deals

Final studio revenue assumptions for both years

1. The studio will take 45% of the total theatrical income
2. The studio will take 60% of the total home entertainment income
3. The studio will take 100% of the total income from pay TV and SVoD deals 
4. The studio will take 100% of the total income from free TV deals