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THE NEW POWER OF THE PVOD WINDOW
WEEK #36 ∙ SEPTEMBER 2020
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THE NEW POWER OF THE PVOD WINDOW #WEEK 36 ∙ SEPTEMBER 2020
MOVIES WINDOWING MODEL CHANGE OVER THE YEARS
NOT EXHAUSTIVE ESTIMATES
Average Major Studio Movie Release Window 1997-2019 (Number of days from theatrical release to video release)
x.x%
DVD Era 1997-2007
Average Release Window
Streaming Era 2007-Present
New Universal / AMC Release Window
‘97-’07 CAGR
-2.1%
172
‘07-’19 CA
Growth / Decline Rate (CAGR)
GR
Based on the impact of Covid-19, AMC and Universal reached an agreement to reduce the theatrical window to only 17 days before allowing premium VOD rental ($20).
139 -4.4%
81
17 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
New Market Entrants
Other Notable Events
Launches Video on Demand
PVOD POWER The PVOD window, like the deal Universal and AMC have recently agreed, is the most stable for exhibitors and studio groups, offering comparable returns for cinemas and increased revenue for the studio on mid- and lower- tier releases. Top-tier titles are likely to be better monetized via traditional windowing models.
THE VALUE OF THE FIRST THREE WEEKS Movies, regardless of size, tend to make their money in theaters in the first three weeks that they’re released. Week:
1
2
3
4
5+
Launches Video on Demand
Files for Chapter 11 bankruptcy
Sources: Red Chalk Group Analysis; National Association of Theater Owners; Company’s stats. Major studios include Disney, Fox, Lionsgate, Paramount, Sony, Universal, and Warner Bros.
A NEW BUSINESS MODEL, THE UNIVERSAL AND AMC DEAL UNIVERSAL HAS SIGNED A DEAL WITH AMC TO SHORTEN THEIR EXCLUSIVE THEATRICAL WINDOW TO 17 DAYS
First 17 Days
Day 18+
$200 $175.1 $160.8
$174.0
13%
23%
$158.9
26%
$159.2 36%
26%
87%
77% $111.0 $100
74%
74%
20%
64% $83.1
80%
$73.3
32%
34%
Source: BoxOfficeMojo; EMC Analysis. Note: Domestic Box Office is U.S. and Canada; Chart represents Top 10 total DBO for films released in 2019; There were 7 additional films released in 2019, which on average generated 82% of domestic box office in its first 17 days.
$45.9 12% 88%
$60.7 68%
66%
21% 79%
$0 Jan 18
Feb 22
Mar 22
May 31
Jun 7
Jun 28
Aug 2
Aug 16
Sep 27
Dec 25
100%
50%
THE MOVIE BUSINESS MODEL, UP TO 2020 ($ millions)
> $100 million film
$50-100 million
< $50 million
0%
Source: MoffettNathanson
PVOD BIG NAME COVID-19’s negative impact on cinema box office revenue will likely accelerate a move towards new movie windowing models. Disney´s “Mulan” will not be released theatrically but will be available to watch as a premium release on streaming service Disney+.
Global Box Office Film Rentals (Studio Share) Film Marketing Gross Film Profits (Pre-Negative/Participations)
$1 Bn Film $1,000 $500 ($110) $440
$1.5 Bn Film $1,500 $825 ($150) $675
$2.0 Bn Film $2,000 $1,100 ($175) $925
Home Entertainment (EST, DVD, Blu-ray, VOD, physical rental) Home Entertainment Marketing Gross HE Profits (Pre-Negative/Participations)
$175
$250
$300
($40) $135
($50) $200
($75) $225
Global Television Film Profit (Pre-Negative/Partcipations)
$150 $725
$200 $1,075
$250 $1,400
($250) ($100)
($300) ($175)
($325) ($250)
$375
$600
$825
Negative Cost Participations Film Profits to Studio Source: LightShed Partners
THE POTENTIAL OF THE PVOD BUSINESS ARE CONSUMERS WILLING TO PAY?
50.23% YES 49.77% NO HOW MUCH WILL CONSUMERS PAY?
21%
of consumers said that they wold pay a monthly subscription to access all new movie releases. Source: Streamlytics