The media news cycle is in a frenzy today over a Bloomberg piece that Apple will shell out a $1 billion to produce big screen features annually. That’s great news for exhibition, yes. But, in reality, doing the math, the streamer was already bound to spend in the billions on a feature slate.
Apple’s deep wallet gives it the financial firepower to take any project off the table, and it has. Calculating some of the budgets out there now on big packages they’ve secured, and the financial commitment could be well over $1 billion. Martin Scorsese’s Killers of the Flower Moon carries a pricetag between $150M-$200M; the untitled Jon Watts-George Clooney-Brad Pitt movie is estimated at around $100M; Matthew Vaughn’s Argylle package is worth around $200M; Ridley Scott’s Napoleon at least $100M+; and the Joseph Kosinski-Brad Pitt Formula One movie, originally reported at between $130M-$140M, is now closer to $200M. So these five films alone already cost $800M. And features this size demand at least $100M global P&A spends apiece.
Still unclear: whether or not deals would need to be renegotiated if the pics go theatrical. Streamers typically buy out talent’s backend upfront. With talent and filmmakers this big, it only makes sense to give them a wide big screen push. Apple shelled out $120M for the Will Smith Emancipation movie which had no reported box office dollars to show for itself in its limited release, nor downstream revenues.
Killers of the Flower Moon, which is poised to world premiere at Cannes, already has a theatrical release set through Paramount for sometime this year. Apple would be in great need of a theatrical and distribution partner on future films, and Paramount could be a contender. This is similar to the way that Amazon Studios used to distribute and market their movies. Before building an internal infrastructure, the streamer would release through other studios including Lionsgate or STX.
Outside of Killers of the Flower Moon, Apple hasn’t made commitments yet to any studio theatrical partners.
If Apple is going full-on theatrical, why not build its own internal marketing and theatrical divisions? Especially if it’s going to commit billions and money is no object. That way, says one distribution insider, “They can control their own fate” and wouldn’t have to negotiate with a distribution partner over release dates, or haggle over distribution fees.
At Amazon, the biggest hit before its $8.5 billion acquisition of MGM was the multi-Oscar-winning Manchester by the Sea ($79M WW) released via Roadside Attractions in 2016. By this year, Amazon controlled its own destiny with internal distribution/marketing on Creed III, which opened to $100M WW. That’s their biggest opening ever, with the threequel also easily their highest grossing film ever at $226.7M. There’s more big screen theatrical on its way from Amazon, which pivoted the Ben Affleck and Matt Damon Artists Equity movie, Air, from Prime Video to an Easter weekend theatrical debut.
It’s all part of a broad rethink of streaming strategy and a recognition of the punched up awareness that’s possible with a big theatrical release for these streamers. Apple’s CODA was barely in theaters before going on to win the Oscar for best picture last year, along with with the feeling that Apple left quite some cash on the table with that.
Apple doesn’t break out its streaming TV subscribers, which are part of the services division including music and other platforms that all contribute to driving the massive Apple ecosystem. It has fewer subs than streaming leaders Netflix and Disney. Natch, the thinking is that a movie’s big screen splash is a bigger advertisement for the streaming service itself in its quest to spike subs.
Amazon is similar, in that Prime Video is a perk, and a very valuable one according to CEO Andy Jassy, in driving members to Amazon Prime, the world’s biggest loyalty program.
Major studios from Warner Bros. to Disney are also pushing theatrical now more than they have since Covid and streaming.
It’s good news for theater chains which were floored by Covid and as recently as the last fourth quarter suffered – from AMC to Cinemark to Imax — from a lack of big wide releases. That’s picked up this year. Regal parent Cineworld filed for bankruptcy last fall.
Exhibition stocks outpaced a up market today with AMC Entertainment closing higher by 3% at about $4.50; Cinemark up by nearly 6% at $13.24, and Imax by 2% at $18.
Apple didn’t respond for request for comment, nor did they confirm the Bloomberg piece that the tech company would spend $1 billion annually on feature film production.