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What Does Streaming Mean for the Movie Studio That Altered Box Office Expectations Forever?

At one point, a movie release didn’t have to make a billion dollars to matter. You didn’t need a roster of A-listers, NDAs, post-credit stingers, release events and a “cinematic universe” to make your movie work.

Franchises have long been a staple of the movie-going experience, of course, but not in the manner Marvel Studios seemed to redefine things over the last decade and change. A 23-movie arc culminated in the highest-grossing film of all-time, Avengers: Endgame. That’s not the lasting legacy, necessarily, though. The lasting legacy is the fact that Marvel helped (largely unintentionally) drive movies to an all-or-nothing approach that also further fueled streaming as a less lucrative but nonetheless viable alternative to theater-going movie experiences. As everyone’s witnessed in 2020, that dynamic has only been supercharged.

Coupling that streaming push with the blurred lines between between “prestige” TV and movies, it was inevitable that Marvel would try again on the small screen after its earlier (hardly, if at all connected to the films) TV forays landed with a shrug. With thousands of characters to pick from, top-tier talent lining up to tell stories with Marvel and Studios head Kevin Feige now in charge of the TV properties too, there’s a cohesion this time around that didn’t exist with ABC’s “Agents of S.H.I.E.L.D.” or Netflix’s various shows like “Daredevil” or “Luke Cage.”

There’s also a distinct home for it now — the Marvel corner of growing entertainment catch-all Disney+. The new shows, starting with “WandaVision,” which launches in January 2021, are going to be cinematic events in and onto themselves. There are actors and themes and characters from the movies. The budgets are more indicative films than a typical TV show. And the scope and feel will attempt to replicate a cinematic adventure, just over a mini-series type arc; much in the way various limited series have found success on both TV and streaming in recent years, and parent company Disney’s found its own winning formula with while expanding the Star Wars universe with “The Mandalorian.”

That sounds great… but does it start to erode what you can do with the overall franchise when consumers pay $13-20 at the box office with less frequency?

The question comes up after Feige noted that “streaming is 100 percent the future and where consumers want to watch things,”  in an Emmys.com interview around “WandaVision” and Disney+. That’s not news for anyone following the entertainment industry. Yet, it’s interesting hearing Feige say as much given how much his studio relies on billion-dollar box office returns to keep cranking out more billion-dollar box office returns. Feige noted in the same interview that the studio is also still committed to the theatrical release model (TV[R]EV note: at least for now, anyway).

The “event’ aspect of Marvel releases are part of what drives up the interest and receipts. People want to be part of that excitement. You can’t necessarily replicate that with a streaming release.

Box office questions aren’t as straightforward, though. With 86.8 million subscribers reported during Disney’s recent investor day, that equates to $693.5 million (and all goes straight into Disney’s pockets). Extrapolated out across 12 months, that’s a lot of money and far beyond what Marvel makes from two or three theater releases per year. But would those subscribers pay whether they were getting Marvel movies (or movie-like shows) or not? If yes, Disney’s basically walking away from a $2-3 billion per year in box office receipts should Marvel’s theater model give way to Disney+ and Disney’s overall streaming push.

At some dollar amount just north of $7.99 per month, there’s probably a breakeven point, and if Disney+ makes good on its ambitious slate of upcoming releases, you can eventually charge a bit more. Then at that point, the budgets for the Marvel movies (and shows) are baked in, as are what used to be the box office revenues. The “event” aspects may be diminished and perhaps that has long-term consequences. Disney can figure out the economics behind making the money work, though even if buzz gets diminished compared to what we’ve seen in recent years and recent movies.

The bigger question actually comes for the rest of the movie industry, and if a Marvel focus on streaming down the road is the final nail in the coffin, assuming COVID wasn’t. Disney drove the global box office in 2019, releasing seven of the top 10 films by worldwide gross and was also involved in another (Spider-Man: Homecoming was a Sony film that Marvel largely controlled the creative direction around). If those receipts decrease significantly in favor of Disney+ releases and increasing subscriber numbers, it’s hard to see how theaters and the movie release model that’s left can survive.

That’s not Disney’s problem, of course. And it’s not Marvel’s either. Feige’s made an unprecedented run of smart and savvy decisions around Marvel’s IP and ways to make money off of it. The fact that the rest of the movie industry either tried (poorly) to mimic it or just let the entire enterprise be carried by one conglomerate’s holdings isn’t Disney or Marvel’s fault. Its effects could be pretty far-reaching, however.

So what does streaming mean to Marvel? Likely everything, for better or worse.

With Disney all-in on Disney+ as the future of the company, that push comes for every piece of the business sooner or later. Having Marvel potentially caving this early — or at least admitting it will need to — this early may be surprising, but also expected given its standing in the Disney family and 2020’s unique chaos. The future of its story-telling seems likely to change as a result, and maybe even becomes a serialized approach reminiscent of the comic books that inspire the movies to begin with. We’ll see pretty quickly (January 15, when “WandaVision” arrives on Disney+) how well equipped they are for this new reality, and whether or not the old theater model will need to be part of Marvel’s future or not.