Entertainment studios and distributors must rethink how they deliver premium content to consumers. The result is a shift that has the potential to move the entire industry in a single direction at an accelerated pace: streaming. Of course, streaming platforms have been around for a while, with 78% of households subscribing to at least one streaming service.
As COVID-19 resulted in global lockdowns and a fear of going out, studios couldn’t show their slated films in theaters. Streaming services like Amazon’s Prime Video, Netflix, and Hulu, all of which had solid subscriber bases pre-pandemic, saw a massive increase in volume as people stayed home. As COVID-19 developed and widespread panic unfolded, streaming services became the everyday norm. In 2020, streaming had doubled its 2019 pre-pandemic levels.
Historically, films have had high budgets, massive theatrical releases, and box office numbers ruled. First-weekend box office earnings could make or break a star’s career. However, streaming services have changed the game. Streaming releases films at lower costs, enables consumers to access those films on their time, and generates ad revenue along the way. Even more importantly, studios and distributors can collect information on viewing habits and preferences, develop valuable insights, and create content that hooks and engages long-term subscribers.
Consumers are becoming increasingly comfortable skipping in-theater releases and watching new films from the comfort of their own homes. In a survey of 1,100 people, 20% of participants stated they prefer to watch movies at home, while another 22% said they would probably prefer to watch them at home. With numbers like these, it makes sense for studios to release new films on streaming platforms.
Streaming services might offer consumers better content, but that benefit comes with a price. While streaming services with global reach continue succeeding, local television stations with limited budgets will suffer. Experiences will also be less than optimal. Specific film genres like action and horror are seen differently on the big screen than in the comfort of your own home. The theater’s space, screen size, and audio quality all lend themselves to enthrall viewers and elicit emotions. Home television sets cannot do the same.
Studios appear to believe streaming is the future. Whether theaters will once again rise to the occasion or simply become a novel outing is a question for once society is moving along again. In 2019 and 2020, we saw the release of Apple TV+, Disney+, Peacock, and HBO Max, all of which show studios’ belief that streaming will be the foreseeable future. With Disney+ having nearly 95 million subscribers and HBO Max having over 40 million subscribers, it is no surprise that Warner Bros. doubled down and committed to releasing its entire 2021 film slate on HBO Max on the date of each film’s in-theater release. These figures signal a seismic shift in the industry because most industry observers believe theaters will reopen with minimal restrictions in late 2021.
The future of the film industry remains uncertain. With new streaming services launching often and top actors and directors signing multi-project commitments for direct-to-consumer streaming services, it is difficult to see the rise of movie theaters once again. Instead, studios can release films more cost-effectively in a more environmentally friendly manner, replacing posters and cardboard displays with targeted social media advertising. Streaming also enables studios to develop valuable insights that can drive future projects. Although theaters will likely have a place in the industry once the COVID-19 pandemic is a distant memory, it is safe to say that the streams are stacked against them.