It is understandable that exhibitors are upset with decisions taken by Universal first, and now by Warner Bros. as well, to prioritize streaming at the expense of theatrical distribution. But it is equally understandable why studios might take such steps, during an extended period when theatres have been closed or operating at dramatically reduced capacity. The fact of the matter is that streaming is booming and in 2020 is where all the money is being made in the industry.
For studios that do not have an in-house streaming platform such as Paramount and Sony, the only way during the pandemic to generate income from their films has been to sell distribution rights to streamers. Several prominent examples of this phenomenon are Sony selling distribution rights in May for Tom Hanks’ Greyhound to Apple TV+ for $70M and Paramount selling right in October for Eddie Murphy’s Coming 2 America to Amazon for $125M.
Originally, both films had been planned as theatrical releases. These production studios are adapting to the pandemic economics by taking what they can get, and the streamers are only too happy to acquire original studio content to showcase for their subscribers. One studio lawyer explained, “my life now is selling films to Netflix, Amazon Prime and the streamers.” Studios such as Disney and Warner Bros. that have their own in-house streaming platform are using them to showcase their own films and attract new subscribers.