NATO’s Premature Attack On ‘Black Widow’ Might Backfire
NATO released a 12-paragraph statement yesterday decrying Walt Disney’s choice to release Marvel’s Black Widow both in theaters and via Disney+’s “Premier Access” platform. Unusually pointed and uncommonly specific, the National Association of Theater Owners declared that Black Widow’s lower-end-of-expectations debut ($80 million) and 67% second-weekend plunge (a record for an MCU flick) was proof of the supremacy of theatrical windows. Conversely, F9 will today pass A Quiet Place part II as the year’s biggest domestic grosser. Both sequels are over $155 million domestic with good-t0-great legs. This despite the Paramount flick became available on Paramount+ (for “free”) and via EST (for $20) 46 days after opening day and the Universal tentpole may arrive on PVOD as early as next week.
Look, I’m obviously on record in preferring theatrical windows and preferring the theatrical experience. I will argue that day-and-date releases like we’ve seen for “Premier Access” ($30 to lease for Disney+ subscribers) and HBO Max (free for top-tier subscribers) don’t just harm the overall theatrical revenues (if only by a nominal amount) but completely devastate the potentially lucrative post-theatrical revenue streams. As NATO correctly pointed out, the $60 million earned by Black Widow on Premier Access (which allows you to “own” the movie for as long as you subscribe to Disney+) isn’t new revenue but rather re-appropriated cash that may well have been accounted for either via theatrical viewings, repeat theatrical viewings and/or purchases on EST, DVD and the like.
Respective self-interest notwithstanding, Disney arguably sat back while Universal, Warner Bros. and Paramount kept theaters warm only to A) drop a Marvel movie that will merely perform on the low end of expectations and B) release the first weekend’s Disney+ revenue to skew the post-debut narrative. Disney’s “Marvel movies are coming back to theaters!” featurette (complete with out-of-context Stan Lee quotes) notwithstanding, the Disney+ reveal minimized the theatrical revenue in terms of media coverage and shareholder interest. Appreciated transparency aside, theater stocks dropped while Disney’s rose. That Disney didn’t release Disney+ second-weekend revenue showed that the first time was a calculated distraction mean to obscure that Black Widow’s $158 million global launch was lower than F9’s $161 million global launch.
However, going on the offense may have done more harm than good. Sure, the saber-rattling may have been potentially as much of a bluff as NATO promising dire consequences to Universal for releasing Trolls: World Tour on PVOD last year. However, NATO may have spoken too soon. First, yes Black Widow’s second-weekend drop of 67% was the worst ever for an MCU movie and closer to the likes of Man of Steel and Suicide Squad than Black Panther or The Avengers. However, the previous “worst second-weekend drops” for Marvel were for Spider-Man: Homecoming (-62% from a $117 million debut) and Ant-Man and the Wasp (-62% from a $76 million launch) on this very weekend in 2017 and 2018.
The difference for Black Widow’s second weekend between a 67% drop and a 62% drop was just $4 million, $2 million of which would have gone back to the theaters. While the Disney+ factor clearly didn’t help, it’s not like A) Space Jam: A New Legacy didn’t perform slightly better than anticipated and B) that Black Widow as a theatrical-only release would have otherwise magically notched a 55% drop in weekend two. Moreover, both Ant-Man and the Wasp and Spider-Man: Homecoming recovered after shocking second-weekend drops, ending up with rock-solid 2.85x weekend-to-final multipliers and respective final grosses of $216 million and $334 million. Legs like those will still get Black Widow to $214 million domestic (at the lower end of “as expected”).
While I cannot automatically presume that Black Widow will follow suit in terms of legs, NATO might have wanted to wait until that third weekend to see if the drops leveled off before drawing “correlation = causation” conclusions. Heck, even legs like Suicide Squad (which earned 1.46x its ten-day total after a 67% drop) still gets it to $193 million, which may qualify as slightly disappointing (about on par with Ant-Man in terms of “tickets sold”) but will still be higher than anything else this summer save for maybe Shang-Chi and the Legend of the Ten Rings on Labor Day. Speaking of which, as of this moment Shang-Chi will indeed get a 45-day theatrical window. And this is where NATO arguably screwed up.
One can optimistically argue that Warner Bros. and Disney see the whole “day and date” release strategy as a temporary fix for a temporary situation. Come what may, we’re still in a global pandemic where A) lots of markets aren’t as heavily vaccinated as America, B) lots of Americans aren’t vaccinated either and C) far fewer kids are vaccinated compared to adults. I have argued, by coincidence or design, that AT&T’s seemingly craven “release our 2021 slate in theaters and on HBO Max” plan was exactly the cushion/justification required to release a slew of big and small films into theaters as scheduled even during deeply uncertain times. Ditto Disney releasing $100-$200 million tentpoles like Cruella, Jungle Cruise and Black Widow amid the current circumstances.
You can argue The Conjuring: The Devil Made Me Do It, Space Jam: A New Legacy and Godzilla Vs. Kong might have grossed more theatrically without HBO Max. However, would those films have been released this year if they were entirely dependent on theatrical revenue? Disney is currently pledging to go “theaters only” with Shang-Chi, Free Guy and the rest of their 2021 slate (Encanto, Eternals, West Side Story, etc.). Warner Bros. pledging a 45-day window at least for the tentpoles in 2022 and beyond. Studios may see this as a “desperate measures in desperate times” gambit. However, NATO prematurely going on the offensive threatens to make Disney and Warner Bros.’ already-planned recommitment to theatrical exclusivity retroactively look like capitulation.
This could just be NATO blowing smoke as it suits them. They are admittedly dealing with a media and Wall Street selling the idea that theaters were already near-death before Covid and that streaming revenue is just sexier. However, by striking before we know whether Black Widow’s second-weekend drop is anything other than “business as usual” for a mid-summer MCU movie, NATO risks looking foolish if the Scarlett Johansson-led prequel recovers over the next six weeks. And by “demanding” that studios do the very thing they were likely already planning to do, they risk having Disney and Warner Bros. (among others) stick to their guns as a matter of saving face even as they see the same numbers we do.
That Black Widow opened with $80 million domestic even while it was available to lease for $30 shows the necessity of theatrical revenue for tentpoles. $60 million is still just two million households, or less than 2% of the 110 million global subscribers choosing to fork over the extra money. And that includes untold millions of dollars lost due to piracy and folks paying $30 once instead of multiple times for different prices via theaters, EST, PVOD and/or Blu-ray down the line. Again, Wall Street’s doomed love affair with streaming and tech companies pretending to be entertainment studios notwithstanding, Hollywood has to see the forest for the trees. All NATO did was threaten to make “the right thing” look like kowtowing to threats.