Remember when Old Hollywood thumbed its nose at Netflix for skipping a wide theatrical release with in 2019? No one is scorning Netflix or any of the streaming services anymore. The COVID-19 pandemic has upended the Old Hollywood distribution system. Movie theaters around the world are teetering on the edge of collapse because of declining attendance and closures during lockdowns. As a result, studios are denied an essential revenue stream to recoup the cost of making films that they’d already teed up for release in 2020 – with and being two notable examples. The Irishman No Time to Die Wonder Woman 1984 Those studios face hard choices: Plan A: delay the theatrical release of their films, hoping for a rebound in theater attendance even as the pandemic worsens. Plan B: recoup some of their losses by selling the movie distribution rights to streaming platforms such as Amazon Prime and Netflix. are choosing Plan B. , Plan B might soon be the only choice for the foreseeable future, thus making the streaming services even more powerful than they are already. Many studios With movie theater chains such as AMC openly talking about going out of business New Hollywood Studios Unload Movies to Streaming Services . For instance: The list of films being sold to streaming services continues to grow Apple TV+ scooped up the worldwide rights to the Tom Hanks movie , a Playtone Production from Sony Pictures/Stage Six Films, following COVID-19 theater closures. Greyhound Universal Pictures is selling international distribution rights to the upcoming Tom Hanks and Paul Greengrass film to Netflix. Universal still plans to release the drama in U.S. theaters on Christmas Day. News of the World Netflix picked up distribution rights from Paramount for the Aaron Sorkin movie . The Trial of the Chicago 7 Paramount sold distribution rights for to Amazon Prime Video. Coming 2 America It’s easy to see why studios are unloading these films. . Disney+, launched in November 2019, . In the first nine months of 2020 . Meanwhile: Streaming services have reported massive increases in viewership during the pandemic now has 73 million paid subscribers , Netflix gained more paid subscribers than it did for all of 2019 Cinemark, one of the world’s largest movie chains, third-quarter 2020 attendance of 1.9 million patrons – compared to . Revenue for the same period fell from $821 million to $35 million. reported 73.3 million for the third quarter of 2019 Rival chain AMC Theatres that attendance had dropped from 87.1 million in the third quarter of 2019 to 6.5 million in the third quarter of 2020. Revenue fell from $1.3 billion to $119.5 million. reported Cineworld Group recently the suspension of U.K. and U.S. operations, which means the temporary closure of 536 Regal theatres in the United States and its 127 Cineworld and Picturehouse theaters in the United Kingdom. announced All told, . 96 percent of movie theaters have reported over 70 percent in losses in 2020 But peddling movie distribution rights to streaming services is no slam dunk decision, as the saga of shows. MGM had originally slated for a May 2020 release, and hopes were high for the final James Bond movie to star Daniel Craig. But as the pandemic worsened, MGM delayed the release of the movie to November 2020 – and then to April 2021. Meanwhile, , MGM shopped to streaming platforms such as Apple TV+ and Netflix. But the film has a staggering $301 million budget, and to recoup that cost, MGM offered a price between $600 million and $850 million, which was unacceptably high to Apple and Netflix. No Time to Die No Time to Die as reported in Variety No Time to Die Now MGM is like a homeowner who sinks a fortune into improving the house only to find no buyers on the market. And James Bond is left cooling his heels -- probably for months to come unless MGM lowers its price or some sort of miracle happens in 2021 to convince people to go to theaters again. It should be noted that the stock for AMC and Cinemark rose – a glimmer of hope. after Pfizer announced a vaccine breakthrough Warner Brothers faces a similar dilemma with , the sequel to the 2017 blockbuster . Warner Brothers originally planned to release as a summer tentpole movie in 2020, then moved the release date to Christmas Day. Its future remains uncertain. Deadline that Warner Brothers will postpone the movie release until 2021. , Warner Brothers is debating between a 2021 release in theaters versus a Christmas Day drop followed by a January 2021 release on the streaming service HBO Max (both Warner Brothers and HBO Max are part of WarnerMedia). Wonder Woman 1984 Wonder Woman Wonder Woman 1984 reports According to Variety Meanwhile, theater chains and studios are scrambling to find a new way forward. Universal has struck deals with both and to shorten the theatrical windows of Universal releases to 17 days, with Universal sharing video-on-demand sales with the theaters. These agreements are highly unusual. But desperate times call for new thinking. AMC Theatres Cinemark Disney Plays Its Ace in the Hole, Disney+ Disney is an Old Hollywood business that made the transition into New Hollywood by taking an ownership stake in streaming service Hulu before launching its own service, Disney+. Disney made both moves in 2019, and both might have saved the company. The pandemic has crushed Disney’s studios and parks/resorts division. But streaming is a different story. Disney recently reported that its Direct-to-Consumer and International division, which includes streaming, had generated $4.85 billion in revenue for fiscal 2020, up 41 percent year over year. Quite sensibly, Disney has now reorganized the company around its streaming content. In addition, Disney is skipping movie theaters and taking its new movies to streaming services, most notably in September and Pixar’s , which opens December 25 on Disney+. Skipping theaters with the release of shocked the movie industry. But as Kay McGuire of Screen Rant discussed , Disney+ was a lifeline for : Mulan Soul Mulan in an analysis of Mulan’s financial results Mulan was a success for Disney+, significantly increasing the number of subscribers and proving that almost 100,000 people would pay an additional $30 to access the film. While suffered from calls to boycott the film following , alienated Chinese audiences with its all-white production team, and dissuaded American audiences by cutting the songs and characters that made the animated so beloved, it still managed to bring in $35.5 million from streaming alone. If had premiered in theaters with the same opening weekend box office, it would have been a massive commercial failure and the lowest-performing live-action Disney remake, tying with . Because premiered only on Disney+, the total gross is a victory and a sign that future releases that premiere on streaming can still be successful. Mulan Mulan Liu Yifei's comments about the Hong Kong protests Mulan Mulan Maleficient: Mistress of Evil Mulan Especially if thrives on Disney+, more Hollywood studios may feel encouraged to adopt a streaming-first strategy. (For more insight into Disney’s content strategy, .) Soul check out my recently published Hacker Noon article The Talent Exodus New Hollywood claimed another victory recently when that Director David Fincher had signed an exclusive four-year deal with Netflix. Fincher, responsible for prestigious titles such as and , is releasing his latest movie, , on Netflix in December following a brief theatrical run. it was reported Fight Club Zodiac Mank Of course, Fincher is not the only major talent to turn to Netflix. , Netflix has become the home for filmmakers ranging from Alfonso Cuarón to Martin Scorsese. Notably, Cuarón partnered with Netflix to create his groundbreaking , which won three Academy Awards. When discussing at the Golden Globes, Cuarón , “My question to you is, how many theaters did you think that a Mexican film in black and white, in Spanish and Mixteco, that is a drama without stars — how big did you think it would be as a conventional theatrical release?” As I’ve written Roma Roma said Similarly, Scorsese released his epic on Netflix in 2019. Like Cuarón, he praised Netflix for giving him artistic freedom. : “People such as Netflix are taking risks. ‘The Irishman’ is a risky film. No one else wanted to fund the pic for five to seven years. And of course we’re all getting older. Netflix took the risk.” The Irishman As he said at the Marrakech International Film Festival Fincher is a risk taker who has directed bold and controversial movies. He’s collaborated with Netflix for years through his involvement as a director and executive producer for and , as well as executive producer for . A four-year deal frees him from the pressures of delivering a box-office champion in opening weekend because movies can gradually build an audience during their extended runs on Netflix. House of Cards Mindhunter Love, Death & Robots He is the ideal artist for Netflix – a visionary with a loyal audience, and someone who is disenchanted with Old Hollywood. As he Total Film magazine recently, “Unless you’re making a tentpole movie that has a Happy Meal component to it, no one’s interested.” In his remarks about the Netflix deal, he , “I signed this also because I'd like to work like Picasso painted, to try very different things, to try to break the shape or change the operating mode.” told noted Netflix deal Netflix also offers its powerful brand name, deep into audience preferences , and an uncanny ability to . All of those are the trademark of a New Hollywood operation. insight due to its data science capability create cultural relevance Artistic freedom continues to be Netflix’s drawing card. Now Netflix promises something else: survival. Where Do We Go from Here? The artistic exodus to Netflix reflects a reality that was already creeping up on Old Hollywood: the old ways of distributing movies were already changing. In 2019, ticket sales in North America totaled $11.4 billion, from 2018. As Brooks Barnes and Nicole Sperling of The New York Times in March, down 4 percent reported Looking at the last 20 years of attendance figures, the number of tickets sold in North America , when cinemas sold about 1.6 billion. In 2019, attendance totaled roughly 1.2 billion, a 25 percent drop — even as the population of the United States increased roughly 15 percent. Cinemas have kept ticket revenue high by raising prices, but studio executives say there is limited room for continued escalation. Offerings in theaters may also grow more constrained. Even before the pandemic, major studios were smaller dramas and comedies toward streaming services instead of theaters. peaked in 2002 starting to route The pandemic accelerated dramatically a trend that was happening already: the rise of New Hollywood. In fact, New Hollywood streaming companies were already in order to meet the distribution requirements for a movie to qualify for an Academy Award. Now the tables are turned. But streaming companies have little motivation to buy movie theaters at this point – it costs enough to create content let alone distribute it. One fascinating possibility is for Amazon to scoop up some cash-strapped theaters and hold on to them for when people return to movies, . I could see movie theaters becoming cash cows for Amazon to hustle its private label brands in the lobbies and offer special rewards for Amazon Prime members. The time might be right for Amazon to make a move. beginning to acquire brick-and-mortar movie theaters as has been speculated For now, we’re living in a streaming-first world that New Hollywood created. Note: I am an investor in Amazon, Apple, Disney, and Netflix.

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