“Spider-Man: No Way Home” smashed box office expectations, but other recent theatrical releases, such as Steven Spielberg’s “West Side Story,” have been duds.
Which is the better read on the future of the movie theater experience in light of Covid and the greater migration to at-home viewing?
Bob Iger, former Disney CEO and outgoing chairman, recently told CNBC he has “very, very firm” beliefs about all of this. Put most simply, he doesn’t see the human need to experience things in the real world disappearing, but there will likely be less attendance overall at the movies, and fewer — and shorter-window — theatrical releases.
“This is real versus digital, versus virtual. I’m not suggesting that digital/virtual won’t grow,” Iger recently told CNBC’s David Faber in an interview before his chairmanship of Disney ends on Dec. 31. But he added, “People like to go out. That’s not going away. They love experiencing things in physical form.”
The question the industry has to grapple with, Iger contends, is not whether people will continue to value the experience of going to movie theaters, but rather, the size at which the market will settle.
HOLLYWOOD, CA – JUNE 03: General views of the El Capitan Theatre’s marquee promoting the new Pixar film ‘Luca’ for an exclusive theatrical run at the venue on June 03, 2021 in Hollywood, California. (Photo by AaronP/Bauer-Griffin/GC Images)
AaronP/Bauer-Griffin | GC Images | Getty Images
The volume and value of at-home streaming services is going to continue to exert pressure on the box office numbers. And the competition for entertainment in the home means more volume is coming, an issue Disney+ is dealing with now.
“There’s just more to watch at home,” Iger said.
And the pricing, whether it is a subscription to Netflix or Disney+ or Hulu, or some of the competitors, are all what Iger says continue to be good deals. “You’re getting a lotta quality, a lotta volume for a relatively inexpensive price,” he said.
This combination is particularly worrying for the theater industry right now due to the cost of a movie ticket in an era of rising prices, and the budget of films like “West Side Story,” which cost $100 million.
“It is becoming more of a problem for people, particularly in inflationary times, which we’ve been experiencing,” Iger said. “When you compare that cost of going to a movie with the cost of staying home and watching a subscription service, I think it’s starting to get … a little too … it’s starting to get too high.”
Iger said he doesn’t have a firm answer related to the Spielberg film’s weak performance in theaters, even with strong reviews, but these pressures have to be considered. “We did a brilliant job marketing it,” he said in the CNBC interview before the latest box office results from the Christmas weekend. “Cost might be an issue. Maybe what we’re seeing in ‘West Side Story’ is exactly what I talked about, which is you’ve gotten more competition in the home, we’ve got a cost factor, and you’ve got Covid. We’ll see.”
Some technology experts, such as Kara Swisher, have been calling the death of the cinema industry for some time and especially since the pandemic-triggered decision by AT&T‘s Warner Media to put new releases on HBO Max.
Iger, though, says if were still running a film business, he would not recommend abandoning theatrical releases. Large-screen global release strategies need to be designed with shorter theatrical windows, but he maintained, “there’s some value to it.”
“Migrating completely away from the big screen experience would not be something I would necessarily advise. But you know, that won’t be my decision,” the outgoing Disney chairman said.
Iger still believes there is power in the concept of a global release date. “The world going out to a movie, experiencing larger-than-life characters on that big screen, with other people,” he said. “I think there’s something very, very powerful about that that probably has an impact, that does have an impact, not probably, on how that resonates.”
But technology allowing studios to make movie-quality television is another factor that will tilt the balance between the at-home and in-theater experience, with close to a half-century between the release of the first “Star Wars” film, “A New Hope,” and “The Mandalorian” on Disney+. The growing stature of the small screen is not a new phenomenon, Iger said, citing the success of HBO’s “The Sopranos.” But the scale of the at-home experience is growing and becoming more global. “You just look at some of the most powerful shows that have been on Netflix. The most recent one would be ‘Squid Game,’ for instance. You know, that’s really resonating globally,” Iger said.
“There’s also something to be said for a series that runs multiple times in a given year over multiple years. The Mandalorian barely existed, at least in the movie storytelling,” Iger said. “That was pretty telling for us. There weren’t many subscribers at the time, and it exploded,” he said.
Disney+ is now releasing a new series centered on another Mandalorian who played a small but influential role in the original Star Wars movies, Boba Fett.
