Do Hybrid Movie Releases Hurt or Help Blockbusters?

"It's not necessarily a binary question," one analyst explains.

Box Office Disney+ HBO Max Godzilla vs. Kong Mulan
How have hybrid theatrical-streaming releases affected the box office? Courtesy of Warner Bros. Pictures and Legendary Pictures

Thanks to the pandemic and the resulting extended theatrical downturn, movie studios have been forced to get more creative with the release of big films. Couple that with the strategic pivot to prioritize streaming and it’s easy to see how the industry has become enamored with day-and-date hybrid releases. In recent months, several big name films have debuted simultaneously in both available theaters and on streaming services. While this has undoubtedly benefitted SVOD platforms such as HBO Max and Disney+, it’s likely taking a toll on box office performance.

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Without any transparent data from individual streamers, it’s virtually impossible to reach a definitive conclusion on how significantly hybrid releases may be impacting the theatrical equation. Instead, the curious public has been left to chew on vague comments that provide little-to-no actual insight. Disney CEO Bob Chapek said in November that his studio was “very pleased” with the results of Mulan on Disney+ Premier Access. Andy Forssell, executive vice president and general manager of direct-to-consumer at WarnerMedia, said last month Godzilla vs. Kong garnered a larger viewing audience than any other film or show on HBO Max over the first four days of its availability since the service’s launch. Neither comment means much of anything without hard data to back it up.

“One might even argue the silence on streaming data speaks volumes about how studios feel about the results so far,” Shawn Robbins, chief analyst at Box Office Pro, told Observer. To be fair, he does note that studios are “understandably wary to discuss a data point in a vacuum as the industry tries to figure out left from right in this new universe.”

The pandemic has forced a backlog of major Hollywood product and streaming has provided a temporary pressure release, though at great economic expense to films with $1 billion box office ambitions. There’s a reason why the biggest of tentpole features such as No Time to Die (October 8) and F9 (June 25) have been reserved for exclusive theatrical distribution. No release over the last year has been standard or equal thanks to shifting theater availability and vaccination dissemination. But here are the worldwide box office receipts for some of the major hybrid releases thus far:

Mulan ($66.8 million)
Soul ($117.3 million)
Wonder Woman 1984 ($166.2 million)
The Little Things ($29.7 million)
Judas and the Black Messiah ($5.9 million)
Raya and the Last Dragon ($93 million)
Godzilla vs. Kong ($358 million)

Robbins points out that we don’t know exactly how many people who streamed Godzilla vs. Kong or Wonder Woman 1984 would have instead seen either film in a theater had it been the only option upon release, or if they never would have seen those movies at all. Therefore, we have no context to how significantly the needle moves and in which direction it tilts. According to our box office expert, we can reasonably and anecdotally assume that some did make that at-home choice due to the pandemic, and by extension come to the hypothesis that both films are still far below optimal box office levels.

Will those same people make the same decision two, four, six, twelve months from now as recovery progresses and the world slowly approaches a new normal?” Robbins said.

Under normal theatrical circumstances, Godzilla vs. Kong was never expected to outperform Wonder Woman 1984 by such a significant margin on opening weekend. The former was coming off a disappointing flop in 2019’s Godzilla: King of the Monsters and the latter was expected to be a $1 billion grosser. Yet thanks to a confluence of pandemic-related factors and beyond, GvK squashed 1984 from a ticket sales perspective. At the very least, Robbins argues, this signifies that the hybrid release of the DC sequel cannibalized its greater potential as a strong theatrical earner, and that demand for returning to movie theaters has risen substantially since December thanks to vaccine rollouts.

“The studio’s parent company [WarnerMedia] was and is chasing an experiment to boost subscriptions [HBO Max], but their decision to revert back to exclusive theatrical windows for key movies in 2022 is also telling on some level,” he said.

The economics of releasing blockbuster films via at-home platforms such as PVOD and SVOD has never made much sense from a studio perspective. Traditional theatrical releases are generally able to enjoy multiple windows of potential profitability—theatrical release, electronic sell-through (EST), DVD/VOD rental, Pay One, Network, Pay Two. Hybrid releases can eliminate many of those windows, reducing downstream revenue potential and long-term earnings upside of these movies. At the same time, however, it’s unlikely that Disney would continue deploying its Disney+ Premier Access option, particularly for Marvel blockbuster Black Widow (July 9), if the internal results were disastrous.

But even as we investigate every nook and cranny of hybrid releases, we’d be remiss if we failed to mention that they are the direct result of an unforeseen global pandemic. We are living in a “temporary reality” with new strategies and innovations arriving at each phase of the ordeal. What is commonplace now may not necessarily be the rule of thumb in a post-COVID world.

“I’m not sure how hybrid releases don’t have an impact on box office to some degree,” Robbins said. “It’s not necessarily a binary question of ‘Did it or not?’ but rather ‘By how much?’ And the answer to that is going to fluctuate over time and on a case-by-case basis, made more opaque by the lack of consistent, baseline streaming metrics.”

Do Hybrid Movie Releases Hurt or Help Blockbusters?