The theatrical window, in the words of one of its biggest recent champions, Warner Bros. Discovery CEO David Zaslav, "creates interest and demand, provides a great marketing tailwind, and generates word-of-mouth buzz as films transition to streaming and beyond."
When a movie is in theaters, Zaslav told investors late last summer, "the value of the content and the overall viewing experience is elevated.”
At least for some major theatrical releases in the post-pandemic era, the cost-benefit analysis for Zaslav's declaration is still being tested.
Take Air, the Ben Affleck-directed biopic, which reunited the filmmaker with Matt Damon in a movie about the up-and-coming era of Nike and the shoemakers fateful courting of young pro basketball phenom Michael Jordan.
Amazon, which co-produced Air through its Amazon Studios unit along with Skydance Sports and Mandalay Pictures, announced Tuesday that it will start streaming the movie on its Amazon Prime Video SVOD smorgasbord starting May 12.
That's just 38 days from when Air debuted domestically in 3,507 theaters in the U.S. and Canada on April 5. Since that time, the movie has generated just over $79.2 million in global box office receipts, according to BoxOffice Mojo.
Movie production costs are hard to come by. So are "prints and advertising" costs, which is essentially what it takes to promote a movie and run it in theaters. These costs generally exceed the production price tag in the modern era.
According to intermittently credible showbiz trade publication TheWrap, Amazon Studios and its production parters paid around $90 million to produce Air, and another $130 million in P&A. Sounds feasible enough for an adult drama.
So the question is, will Amazon recoup enough money in the primary and secondary portions of Air's value chain to justify spending $130 million releasing the movie theatrically?
Here's more math to consider: With studios recouping about 60% of box office receipts domestically, and 20-40% for international sales, we'll put Amazon's box office revenue share from Air at a conservative $40 million, or roughly half. So, by deciding for a global theatrical release of Air, Amazon and its partners are out $90 million -- which is the difference between the film's P&A cost and the producer's estimated share of box office receipts.
Did Amazon "elevate" Air sufficiently in secondary markets, including streaming, to justify spending the additional $90 million for a global theatrical run?
Amazon is probably not the best studio backer for this case study. For one, it's putting Air into subscription smorgasbord streaming before transactional rental and sale markets, so we can't gauge how much the theatrical awareness will boost traditional home video windows, like DVD kiosk rentals and VOD.
Secondly, Amazon -- which doesn't disclose Prime Video subscriber numbers and platform usage data -- has typically diffuse goals for projects like Air. Amazon is famously more concerned about its users being drawn to its platform to do things like, say, buy Nike basketball shoes.
Notably, a study published last month by talent agency UTA suggests moviegoers aren't discouraged from shelling out for a theater ticket just because the theatrical window is short.
And most of the 2,000 adults surveyed in the 55-page study couldn't correctly remember the name of the last streaming original or theatrical-first release they streamed at home, suggesting streaming alone doesn't create nearly as much brand awareness.
Certainly, Air isn't the only recent theatrical release with an exhibition window shorter than traditional standards.
M. Night Shyamalan's latest thriller, Knock at the Cabin, was released Feb. 3 and debuted on Peacock on March 24. It's grossed just $57.4 million in worldwide box office receipts to date.
And another Universal Pictures title, tongue-in-cheek horror-thriller Cocaine Bear, debuted on Peacock on April 14 following a Feb. 24 theatrical bow. It generated $87.1 million in global box office receipts.
Theatrical success seems to have some, er, bearing on the release strategy. MGM, which was purchased by Amazon last year for $8.35 billion, released Creed III in theaters on March 3.
The Rocky Cinematic Universe title has grossed over $272 million wordwide so far and is currently in the transactional window. No SVOD debut date for Creed III on Amazon Prime Video and MGM Plus has yet been announced.
