News Disney announces strategic restructuring of media and entertainment divisions.

[doctornick]

If major studios took over theater chains, that would be another direct-to-consumer strategy. The problem is that there is no money in movie theaters.

There's a reason rural areas without movie theaters don't have movie theaters. They aren't viable. Theaters are totally at the mercy of whatever the studios are cranking out. The innovations they've tried in order to bring people in (conversion to digital, surround audio, MoviePass-like programs, 3D, dining services, pre-purchase and seat selection apps, etc.) may have enticed people to come out, but at much higher costs. Outrageously overpriced popcorn and soda don't cut it anymore.

And then, of course, there's the recent attention to theater security and safety (shootings, infectious disease) and the expenses of addressing these.

It's just not possible to make money in the movie theater business anymore.

This seems like an incredible cynical view that doesn't correspond to the sheer number of billion dollar films in recent years. Certainly ticket sales aren't what they were like in the heyday when there were fewer entertainment options, but many people of all ages go to movies. You don't have events like Infinity War/Endgame that are all the rage without tons of people going to theaters.

 

[Ldno]

I mean at the end of the day, utility providers will fight back on streaming, al they have to do is raise the internet prices and add a data cap on your service if you don’t bundle with cable.

Utility providers are the worst and they play super dirty. We can Try to cord cut all day long but when you add 80-100 just 100mb internet or 1tb internet depending on where you live, when you start adding up services like Netflix, HBO max, Hulu, ESPN and all the extra ala carte tv services people start cutting left and right. Those internet contracts are like 1-2years and att and comcast have a huge dominance Then sell you cable for a double play 1 tb internet with unlimited cap for 70 bucks all day.

 

[_caleb]

This seems like an incredible cynical view that doesn't correspond to the sheer number of billion dollar films in recent years. Certainly ticket sales aren't what they were like in the heyday when there were fewer entertainment options, but many people of all ages go to movies. You don't have events like Infinity War/Endgame that are all the rage without tons of people going to theaters.

You think it’s cynical to say that movie theaters struggle to make money? Those mega-blockbusters have indeed made lots of money, but for the studios, not for the theaters.

 

[Ldno]

You think it’s cynical to say that movie theaters struggle to make money? Those mega-blockbusters have indeed made lots of money, but for the studios, not for the theaters.

Correct, theaters make money off of Concessions, it’s a well known fact. Just like the Alamo survives on old school festivals and films, I am starting to see Theater/Bowling alley with arcade combos the ones that are more popular than your regular smaller franchises that just serve popcorn and soft drinks.

 

[doctornick]

You think it’s cynical to say that movie theaters struggle to make money? Those mega-blockbusters have indeed made lots of money, but for the studios, not for the theaters.

Fair enough, I interpreted your post wrong. I took it as there was no money to be made in theatrical releases - but you are correct that the bulk of the money is made by studios, not the theaters themselves.

I guess I responding more to a general theme in this thread that theatrical films are a dying art. I don't see that at all - just that they will continue to be dominated by action tentpoles (and animation and horror to a lesser extent). The smaller art house/Oscar bait type films are probably going to shift to more digital with limited release going forward. I think we'll see more trending towards Roma and The Irishman type setups.

But stuff like Star Wars and the MCU being released in theaters should continue and do fine when we return to "normal". I don't really understand the "people will never return to seeing movies" sentiment.

 

[_caleb]

Fair enough, I interpreted your post wrong. I took it as there was no money to be made in theatrical releases - but you are correct that the bulk of the money is made by studios, not the theaters themselves.

I guess I responding more to a general theme in this thread that theatrical films are a dying art. I don't see that at all - just that they will continue to be dominated by action tentpoles (and animation and horror to a lesser extent). The smaller art house/Oscar bait type films are probably going to shift to more digital with limited release going forward. I think we'll see more trending towards Roma and The Irishman type setups.

But stuff like Star Wars and the MCU being released in theaters should continue and do fine when we return to "normal". I don't really understand the "people will never return to seeing movies" sentiment.

Oh, I can see how I could have been more clear. Sorry about that.

I think the numbers show that Disney can make a lot of money from big theatrical releases, but this restructuring is an indication that Disney is investing more in streaming and sees that as a big opportunity for growth.

 

[TrainsOfDisney]

So when does Pixar see mass layoffs like the parks?

 

[MagicHappens1971]

So when does Pixar see mass layoffs like the parks?

Maybe I'm missing something, but I'm a little lost at the origins of this question. While the financial burden is applied to all parts of the company, why target Pixar? I'm sure as the new "restructure" progresses, they will lay off half of Pixar and half of WDAS, consolidate, and market the movies separately even though they will eventually come out of the same studio.

 

[DisneyCane]

Might go away fromAMC/Regal and back to the small, 1-screen local theaters.

Im happy we still have one of those close by in Tryon NC. I love that place.

Single screens don't work well because studios require minimum hold times for the big movies if opened "on the break." This means that if a single screen wants to play Avengers 27 on opening day, they will be busy one week and then 1/2 empty by the third week while Disney won't let them open something else.

That's how the multiplex trend got started once movies stopped drawing steady crowds over months and started doing higher and higher percentages of the total early in the run. Theatres wanted to be able to play new titles more frequently so they started doing terrible twin theatres by ruining movie palaces and splitting them.

The megaplex that AMC pioneered was to be able to have a ton of show times by playing tent pole movies on multiple screens. This was more of a payroll efficiency move so the crowds would be spread out. You need less staff to serve 250 customers at 2 show times offset by 30 minutes than to serve 500 customers in a huge auditorium at one time.

While I definitely foresee the movie theater complex getting smaller and having less screens, a return to single screen theatres outside of rural areas (where they exist now) is highly unlikely. As the trend has been, there will be a higher percentage of specialty screens like IMAX and Dolby Cinema to have more differentiation from home viewing (and higher ticket prices).

 

[doctornick]

Single screens don't work well because studios require minimum hold times for the big movies if opened "on the break." This means that if a single screen wants to play Avengers 27 on opening day, they will be busy one week and then 1/2 empty by the third week while Disney won't let them open something else.

That's how the multiplex trend got started once movies stopped drawing steady crowds over months and started doing higher and higher percentages of the total early in the run. Theatres wanted to be able to play new titles more frequently so they started doing terrible twin theatres by ruining movie palaces and splitting them.

The megaplex that AMC pioneered was to be able to have a ton of show times by playing tent pole movies on multiple screens. This was more of a payroll efficiency move so the crowds would be spread out. You need less staff to serve 250 customers at 2 show times offset by 30 minutes than to serve 500 customers in a huge auditorium at one time.

While I definitely foresee the movie theater complex getting smaller and having less screens, a return to single screen theatres outside of rural areas (where they exist now) is highly unlikely. As the trend has been, there will be a higher percentage of specialty screens like IMAX and Dolby Cinema to have more differentiation from home viewing (and higher ticket prices).

I know people have mentioned about how movie studios are now allowed to own theaters, which does seem like a plausible way for them to continue to exist. I'm wondering if the "solution" is for 2 or 3 of the major studios buying out one of the big theater chains is going to be he outcome. Say if Disney/Universal/Warner buy AMC or Regal and then each use the existing multiplexes and share the screens. They could have some system where a studio releasing a tentpole gets the lion's share in a given week, but each would return a certain number every week so they can always have some presence.

It wouldn't really make sense for (say) Disney to own 14 screen theaters for just its own movies as there will be periods where it wouldn't need that many screens for many weeks of the year. I think this type of setup would also placate those worried about vertical monopolies by preventing any one company from dominating the exhibition field.

(All this is assuming we return to mostly normal theater going at some point in the future)

 

[DisneyCane]

I know people have mentioned about how movie studios are now allowed to own theaters, which does seem like a plausible way for them to continue to exist. I'm wondering if the "solution" is for 2 or 3 of the major studios buying out one of the big theater chains is going to be he outcome. Say if Disney/Universal/Warner buy AMC or Regal and then each use the existing multiplexes and share the screens. They could have some system where a studio releasing a tentpole gets the lion's share in a given week, but each would return a certain number every week so they can always have some presence.

It wouldn't really make sense for (say) Disney to own 14 screen theaters for just its own movies as there will be periods where it wouldn't need that many screens for many weeks of the year. I think this type of setup would also placate those worried about vertical monopolies by preventing any one company from dominating the exhibition field.

(All this is assuming we return to mostly normal theater going at some point in the future)

I don't know why a studio would want to own theatres. On the big budget releases they already take a huge percentage of the box office gross. Why would they want to take on the liabilities of the leases and other overhead involved or need to deal with employing thousands of high school kids?

The movie theatre business is basically a concession (and in more cases recently restaurant/bar) business that uses movies to attract customers.

It would make more sense for the studios to provide a "bail out" by allowing the theatres to keep a higher percentage of the box office gross for a few years to cover the COVID losses. This way they aren't taking on liabilities and risk since the money they are "giving away" is still based on a percentage of what is coming in.

If the studios want to continue with the business model of big budget movies, they will need to make sure a significant number of movie theatres are still in business. The revenue stream to support those budgets doesn't exist for streaming services. Disney+ subscribers (and other streaming service subscribers) want to pay a flat monthly fee for unlimited content. They aren't going to pay a $30 add on to watch a new release "now" instead of a couple of months from now on the same device or TV.

Disney as a content producer can certainly go on without movie theatres, just not producing content with budgets in the hundreds of millions. For that type of content, theatres are needed both for the revenue from the much higher per viewing cost and the marketing power of box office grosses that enables the PPV and physical sales revenue stream.

 

[WondersOfLife]

Single screens don't work well because studios require minimum hold times for the big movies if opened "on the break." This means that if a single screen wants to play Avengers 27 on opening day, they will be busy one week and then 1/2 empty by the third week while Disney won't let them open something else.

While I definitely foresee the movie theater complex getting smaller and having less screens, a return to single screen theatres outside of rural areas (where they exist now) is highly unlikely. As the trend has been, there will be a higher percentage of specialty screens like IMAX and Dolby Cinema to have more differentiation from home viewing (and higher ticket prices).

I almost disagreed with your first paragraph until I got to the ending paragraph. I'm speaking mostly for the one-auditorium theatres in rural areas.

For instance, I'm from Inman SC. A simple 15 minute drive to Spartanburg which has 3 different movie theatres to choose from (reruns at the regal theatre at the mall, regal spartan 16, and NCG cinemas.) Also relatively close to other theatre areas like Greenville.

However, there's the Tryon Theatre in NC, a few minutes away, as well... I also tour across the whole state for a living. These little family run theatres seem to actually thrive on their localism, and I haven't ever seen any of them playing a big named movie like Avengers for more than a day or two. So I'm not sure how much truth is behind that. I'll know for certain when my family is able to experiment around with movie nights at our Inman Theatre location.

 

[tirian]

Fair enough, I interpreted your post wrong. I took it as there was no money to be made in theatrical releases - but you are correct that the bulk of the money is made by studios, not the theaters themselves.

I guess I responding more to a general theme in this thread that theatrical films are a dying art. I don't see that at all - just that they will continue to be dominated by action tentpoles (and animation and horror to a lesser extent). The smaller art house/Oscar bait type films are probably going to shift to more digital with limited release going forward. I think we'll see more trending towards Roma and The Irishman type setups.

But stuff like Star Wars and the MCU being released in theaters should continue and do fine when we return to "normal". I don't really understand the "people will never return to seeing movies" sentiment.

It’s just a popular thing to say right now. Professional analysts (as opposed to bloggers/vloggers) expect all brick-and-mortar businesses to rebound as people are sick and tired of being at home.

The big question is whether the studios will support the massive chains.

 

[DisneyCane]

These little family run theatres seem to actually thrive on their localism, and I haven't ever seen any of them playing a big named movie like Avengers for more than a day or two. So I'm not sure how much truth is behind that. I'll know for certain when my family is able to experiment around with movie nights at our Inman Theatre location.

When they play big titles for only a day or two it is because they don't open "on the break," which is the national opening day. If they wait to open the movie for two or three weeks (depending on title and studio) then you can play one show if you want and get rid of it.

 

[WondersOfLife]

When they play big titles for only a day or two it is because they don't open "on the break," which is the national opening day. If they wait to open the movie for two or three weeks (depending on title and studio) then you can play one show if you want and get rid of it.

Ah, well. With the way things are going these days, looks like that's how it'll have to be.

 

[_caleb]

I almost disagreed with your first paragraph until I got to the ending paragraph. I'm speaking mostly for the one-auditorium theatres in rural areas.

For instance, I'm from Inman SC. A simple 15 minute drive to Spartanburg which has 3 different movie theatres to choose from (reruns at the regal theatre at the mall, regal spartan 16, and NCG cinemas.) Also relatively close to other theatre areas like Greenville.

However, there's the Tryon Theatre in NC, a few minutes away, as well... I also tour across the whole state for a living. These little family run theatres seem to actually thrive on their localism, and I haven't ever seen any of them playing a big named movie like Avengers for more than a day or two. So I'm not sure how much truth is behind that. I'll know for certain when my family is able to experiment around with movie nights at our Inman Theatre location.

It reminds me of the mom-and-pop video rental stores in the VHS/DVD era trying to stay in business during the rise of the big chains like Blockbuster. Anyone still have one of these where they live?

I think the smaller, independently-owned, and local theaters that have survived the rise of the megaplex chains have done so by catering to their local communities. Many do things like rent their spaces out to churches, do singalong-type events, show sports, and sponsor indie/local film festivals. Good for them, I say. But it makes sense to me that Disney would bet big on streaming right now and moving into the future.

 

[WondersOfLife]

It reminds me of the mom-and-pop video rental stores in the VHS/DVD era trying to stay in business during the rise of the big chains like Blockbuster. Anyone still have one of these where they live?

We do have a few, yes. One did just go under, though. After many, many years.

I think the smaller, independently-owned, and local theaters that have survived the rise of the megaplex chains have done so by catering to their local communities.

Yes.

I can't speak for bigger cities.

 

[_caleb]

When they play big titles for only a day or two it is because they don't open "on the break," which is the national opening day. If they wait to open the movie for two or three weeks (depending on title and studio) then you can play one show if you want and get rid of it.

"The break" is another thing that's going to become more and more fuzzy with these changes.

It's not just the big screen and social aspects that keep audiences paying for theatrical releases, it's the window of exclusivity (people don't want to wait until a movie is available for streaming). Disney is challenging both of these.

You all may have noticed the new Group Watch feature on Disney+. This is to add the social element of movie watching to streaming.

Movie theaters are fighting hard to keep the traditional (exclusive) approach to movie releases, but the streaming platforms need content, too. With Disney's experiment with Mulan (and Universal's with "Trolls World Tour"), I think they're doing 2 things: testing the waters for a simultaneous release (in theaters AND uncharge streaming) and also reminding theater chains that they aren't indispensable.

 

[DisneyCane]

"The break" is another thing that's going to become more and more fuzzy with these changes.

It's not just the big screen and social aspects that keep audiences paying for theatrical releases, it's the window of exclusivity (people don't want to wait until a movie is available for streaming). Disney is challenging both of these.

You all may have noticed the new Group Watch feature on Disney+. This is to add the social element of movie watching to streaming.

Movie theaters are fighting hard to keep the traditional (exclusive) approach to movie releases, but the streaming platforms need content, too. With Disney's experiment with Mulan (and Universal's with "Trolls World Tour"), I think they're doing 2 things: testing the waters for a simultaneous release (in theaters AND uncharge streaming) and also reminding theater chains that they aren't indispensable.

Without the theatres people won't pay (at least not enough of them) for early access. Yes, the exclusive window is a big part of why people are willing to pay the higher prices. There is some differentiation as well which isn't there with some kind of exclusive early access streaming. Some people will pay a big premium to view at home during a theatrical window. Very few would pay if it wasn't "in theatres" and it was just a matter of viewing a month or two earlier.

 

[brb1006]

I frankly hate all this streaming junk. While cable has been getting expensive at least I get live TV and live sports something that streaming services don't give you. To be honest I have yet to find any original series that any of the services have put out to be good. It feels like nobody likes live TV anymore.

The Mandalorian, Imagineering Story, and Howard didn't interest you?