Mon. Dec 30th, 2024

The streaming era has no box office flops

News

‘Red One’ and ‘The Lord of the Rings’ were recent box office bombs. Or did they?

Within a week of their release, ‘Red One’, in which The Rock and Chris Evans rescue Santa Claus, and ‘The Lord of the Rings: The War of the Rohirrim’, an animated prequel to Peter Jackson’s trilogy, were already being referred to as the year’s biggest financial failures. But a few days later, both were talking about putting their failure in perspective.

They flopped, but. It should be noted that both films were box office flops without further explanation. ‘Red One’ cost 250 million dollars (much more than a film of that nature should) and grossed 176 million, with a possible nosedive in subsequent weeks due to its surprise Prime Video debut (motivated, perhaps, by that same box office flop). ‘The War of the Rohirrim’ had a $30 million budget, opened internationally, and grossed two million, plus 4.6 million in the US a week later.

Where’s nuance? The current box office success and failure metrics. Before streaming platforms, a film that failed in theaters was considered almost irredeemable, but ‘The Shawshank Redemption’, ‘Fight Club’, and ‘Austin Powers’ became cult classics and even spawned sequels. The streaming option is added.

Make Prime Video recordings. ‘Red One’ reached 50 million views worldwide in four days, breaking the record set by ‘Road House’, which took two weeks. Does that offset box office losses? Of course not. Prime Video receives less tangible compensation: more subscriptions and competition with Disney and Netflix on their own turf during the holidays.

Change in success metrics. In these hybrid times, film success is measured by metrics beyond money and viewers, such as views, playing time, and subscription growth. How long a film is “in the conversation” months after its release is also valued. ‘Red One’ is not a success for Amazon, but its reputation and a new audience may mitigate the initial “failure” feeling.

Franchise failures. Another relative failure is ‘The War of the Rohirrim’. On the verge of failing at the box office, “The War of the Rohirrim was accelerated to ensure that New Line Cinema would not lose the film adaptation rights to Tolkien’s novels while the LOTR trio (Peter Jackson, Fran Walsh and Philippa Boyens) worked on a creative vision for subsequent live-action films.” The final appearance has not been as satisfactory as expected, but the investment of 30 million is within controlled loss margins, awaiting a box office hit like expected for future productions. Save the franchise, ban the premiere.

Is “Red One,” Dwayne Johnson’s $250 million Christmas action film, a sign of the movie industry’s future or a relic of the free-spending, streaming wars?

After the film opened last weekend in the U.S. to $32 million (revised from $34 million on Sunday), Amazon, the e-commerce giant turned media giant, claimed success. No matter that “Red One” would need a Christmas miracle to break even during its theatrical run. Who cares that “Joker: Folie à Deux” opened to $38 million a few weeks earlier despite costing $50 million less than “Red One”? All the attention surrounding the movie’s big-screen release was meant to ensure that a large audience tunes in when “Red One” debuts on Prime Video, boosting subscribers or keeping them from switching services.

The Rock will also generate third-party licensing, movie rentals, and merchandising (who wants a “Red One” beer stein?). A new kind of movie math emphasizes downstream revenues over box office returns, which are reported and publicly verifiable. Downstream revenues are rarely disclosed and only made public in a scarce and aggressively spun manner.

“I think ‘Red One’ is the exception, not the rule going forward,” says Roth Capital Partners media and entertainment analyst Eric Handler. The economic model predates COVID-19. But everyone knows you can’t use a $250 million movie as a loss leader to drive subscribers because you can’t justify the return.

Amazon won a “highly competitive bidding war” for the package rights in 2021, so “Red One” may be everything it hoped for. However, that deal’s timing was instructive. It was signed when CAA, WME, and other talent agencies were being paid exorbitant fees for scripts with A-list stars and directors. (From “Argylle” to “White Noise” and “Wolfs.”) “Red One” was completed nine months before Amazon acquired MGM for $8.5 billion. With that deal, the company gained access to a vast library of classic films, from “Silence of the Lambs” to “The Thomas Crown Affair,” giving it new IP to reboot, reimagine, and occasionally run into the ground. It discouraged them from joining too many “highly competitive bidding wars.”

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