Is a movie only a “movie” if it is first released in a theater? Should some movies skip the theater and go directly to consumers via streaming and PVoD? Are there different forms of value that can be unlocked with direct-to-consumer services? These are questions studios should be asking at this unprecedented moment.

With more people opting for home entertainment experiences and more studios developing their own distribution channels, studios have a chance to reconsider movie windowing and revenue models. 6 Clearly, it is not as simple as just shifting to streaming. At the same time, if the pandemic were over, 68% of consumers want to watch at least some movies in theaters (figure 1). 5 Early experiments with premium video-on-demand (PVoD), where first-run movies are offered directly to consumers on streaming services, have had mixed results during the pandemic. Many have yet to show much profit, despite their expanding market valuations.

For those that do, deploying streaming services is very costly. 4 If theaters have a diminished role in the windowing system-the schedule of exclusive exhibition periods across theaters, home video, cable and TV, and streaming-it could force changes in how content deals are financed, what the terms for distribution look like, and how studios make money from their productions.Īlthough streaming may look like the obvious path forward, studios can’t fully monetize all their franchises and derivative content through streaming services, particularly if they don’t control their own distribution channels.

Although the average number of movie tickets purchased by Americans each year has declined from 4.2 in 2009 to 3.4 in 2019, 3 studio revenues are driven more by box office tickets now than they were 20 years ago. Studios derive almost half of their revenues from theatrical releases. Explore the Digital media trends survey, 14th edition

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