Nick Cherrier is Zuora’s Sydney-based strategy expert. In this piece, he looks at the idea of what success looks like for movies, and explains why box office success might be a thing of the past.
In August this year, Warner Brothers released a movie called The Suicide Squad. It was based on characters from the DC Comics superhero universe, a quasi-sequel to a 2016 film (featuring our own Margot Robbie) with a confusingly similar name: Suicide Squad.
Unlike the earlier installment, the film was lauded by critics and enjoys a healthy 90 per cent rating with Rotten Tomatoes. It was, nevertheless, labelled a “failure” and a “disaster” by publications such as Variety, The Hollywood Reporter and Forbes.
In great part that criticism focused on one thing: box office numbers.
The film cost US$185 million to make. At the time of writing this, it’s still out in cinemas, but hasn’t broken even – in other words, its worldwide box office gross is well under what it cost to make.
But is box office still the best way of measuring whether a film can or should be considered successful? I think the answer is sometimes, but its relevance is declining fast.
In 2019, the global film industry (measured by annual box office revenue) was worth $42 billion. In the same year the streaming industry (measured by annual streaming video on demand revenue) reached $50 billion. In 2020, thanks in great part to COVID, the box office figure dropped to $12 billion. It will improve to one degree or another once the vaccines begin to prevent spread of the virus, but it may never fully recover.
Meanwhile, streaming is expected to become a $100 billion market by 2025.
On these figures alone, streaming success has to be considered a more important metric than box office. Well, mostly.
The Suicide Squad was released in cinemas at the same time as it was released to HBO Max (the streaming service owned by WarnerMedia Studios & Networks). Now, if you can watch a movie from the comfort of your own home during a pandemic at no extra cost (apart from your monthly subscription) and after the first film was panned by critics, why wouldn’t you?
That was certainly the sentiment of the American public. The film became the most-watched DC movie on HBO Max this year and the third-most-streamed film ever shown on the platform.
Now, before I go on, I need to explain why I’ve qualified all this with words like “mostly” and “sometimes”. And to do that I need to move away from Hollywood for a moment and look at a recent Australian release.
Going by production budget, The Dry is in a totally different league to The Suicide Squad. But the thriller, starring Eric Bana, which was released at the start of this year, just moved into the top 15 Australian films by local box office gross of all time.
Admittedly, it was released in the eye of the COVID storm, in January when national cases ranged between 6 and 20 (and far more cinemas were open than they are as I write this). But this can’t detract from its significance. Streaming is affecting cinema patronage in a way that competitors from the past, such as TV and VHS, never did. And despite this, a relatively modest Australian mystery film has made $17 million in ticket sales; we should celebrate that as an extraordinary achievement (Mad Max: Fury Road made $21.7 million only six years ago).
It may, however, be the exception that proves the rule.
Another Australian film that is now widely considered to be highly successful (and received extraordinary critical reviews) doesn’t figure in the top 100, let alone 20, box office hits of all time for local audiences. It’s The Babadook, which admittedly found a much better cinema audience overseas, but really came to prominence once it had gone to Netflix. There, it was famously categorised as an “LGBT film”, became an internet meme and gained a cult following.
What does The Babadook have in common with The Suicide Squad? Well, almost nothing, and that’s kind of the point. They are, thematically and budget-wise, chalk and cheese. They both, however, “bombed” with local cinema audiences, were loved by critics and should now both be considered successes thanks in great part due to streaming services.
Ultimately, movie-lovers’ expectations have shifted. They want access to memorable experiences delivered with great service and in total comfort. Cinemas used to tick these boxes without competition. Now streaming services cover each of these criteria as well or better.
That means streaming numbers now clearly need to be taken into account when determining whether a film is a “flop”, a “hit” or something in between. (Getting access to those numbers is notoriously difficult and the subject for another article entirely).
That doesn’t mean streaming, or consumers’ move to online video services, will bring about the death of the cinema. But perhaps in the near future, cinema-going will be a part of a subscription service, not an alternative to it.
