Just one month after the Netflix original series “Queen’s Gambit” debuted, it’s the service’s most-watched limited series ever, Netflix (NFLX) said last week, after 62 million households viewed the show in its first four weeks.
Video Transcript
[MUSIC PLAYING]
SEANA SMITH: Big news in the streaming space and for movie owners, Warner Brothers announcing this week that they will release their entire slate of movies for next year simultaneously in theaters while also on HBO Max. We want to bring in Dan Roberts, because of course, he’s closely tracking this story here at Yahoo Finance for us. And Dan, I think the big question is, movie theaters, they’ve been losing ground now to streamers even before the pandemic. But how much trouble could they be in at this point?
DAN ROBERTS: Well, it’s a major problem, Seana. And this is sort of just the latest salvo in what I think it’s increasingly fair to call a war between the studios and the exhibitors, as theaters are called. Now, I’ve seen people point out that in a way, Warner Brothers here, Warner Media, and AT&T, by extension, they’re really just using the pandemic as a cover in order to screw theaters. I don’t think that’s going too far. The company has given a caveat that the plan is to just have these Warner Brothers movies be on HBO Max for the first month. So that is, when every movie comes out, it’ll go on HBO Max and in theaters simultaneously, but after the first month, it’ll leave HBO Max, and it’ll continue to run in theaters.
The problem with that is, if you want to see one of these movies, you’re going to see it in the first month. People don’t wait longer than a month to see a movie that they want to see. So it certainly hurts theaters. And really, what we’re talking about here, is the potential death of the theatrical window. Traditionally, movies and theaters, studios and theaters have had an agreement that movies go into theaters exclusively for 70 days. Theaters are the only place in the first 70 days that you can watch the movie.
AMC has already come to an agreement with Universal that shrinks the theatrical window for Universal movies to just 17 days. But this plan for Warner media throws the theatrical window out of the window. Because there’s no exclusivity for the theaters. So it’s really an effort to boost subscriptions for HBO Max, and I think in some way, it’s spurred by the pandemic. But it’s also the company reacting to what it thinks consumers want, which is convenience, we want to watch movies right away, at home, when they come out.
For me, as a lover of movie theaters, I’m a little saddened by this news, and I think if Disney follows Warner Brothers, then this is a major, major, major problem. Maybe even a death knell for theater chains.
ADAM SHAPIRO: Dan, you can probably put money that Disney will follow. The consolidation we saw yesterday and the layoffs in the entertainment division sure hints that that’s where they’re headed. But I’ve got to ask you, the implications of this are greater than just the theater stocks going down. I could imagine, for instance, people are going to need bigger monitors to watch– they’re going to want bigger monitors to watch movies. So what are the– this could be 10-fold on itself. The Oscars will change. It all changes, right?
DAN ROBERTS: I agree with you. We can extend out the tentacles here to any angle you want. People are going to buy bigger TVs, sure. Also, the awards rules have to change. That was already a major discussion before the pandemic. Remember, “The Irishman” had to go into theaters for 14 days just to be eligible for Oscars. That’s all going to go away.
Now, let me just say, to your point about Disney, I’m not so sure that Disney would follow suit with Warner Brothers here. I think we should see what Warner Media is doing in 2021 as an experiment, because you’ll remember that Disney put “Mulan” straight on Disney Plus for a $30 digital purchase fee. That’s in addition to having to be a Disney Plus subscriber, and by all accounts, it wasn’t a huge success. Now maybe that was because the reviews of “Mulan” weren’t great, maybe that was because of the political controversy around “Mulan,” but I don’t think that was a huge success. And Disney hasn’t really shared any numbers, and I think there’s good reason for that.
So we’ll see if Disney does that once the pandemic is over. But certainly, if Warner Media has success in 2021 with seeing its movies on HBO Max, it’s going to be a problem for theaters.
SEANA SMITH: Dan, talking about this clearly just highlights the power of streaming and how different the landscape is today than it was even just a year ago. And I know you have a new story out just about the three most popular streaming shows right now, including “The Undoing,” which is on HBO Max, which is what we have been talking about. But what does this tell us just about the strength of each of these streaming services, and how we compare them to each other?
DAN ROBERTS: Yeah, Seana. We’ve got data from a lot of different services and streaming information sites that basically show that in the last two weeks, the cultural conversation in TV is mainly around these three shows. And it’s no surprise what they are. It’s “The Mandalorian” season two on Disney Plus, it’s “The Undoing” on HBO Max, and it’s “Queen’s Gambit” on Netflix.
Now what’s most interesting to me here is how unsurprising the success of these shows are. Each show is basically textbook representative of the platform it’s on. “The Undoing” is a realist– you know, it exists in the real world, about adults, domestic thriller, and it’s very HBO. In many ways, it’s very “Big Little Lies”, which has been a huge hit for HBO. “Queen’s Gambit” is a high gloss, premium, fancy, measured period piece, that in many ways, I think, feels like “The Crown.” It’s about chess, it’s about the 1950s and ’60s, and it’s very Netflix. And then you’ve got “The Mandalorian”, which is still the only big original series that Disney Plus has had, but that’s enough. It only needed one. I mean, Baby Yoda has become a cultural conversation. Disney doesn’t need other shows right now.
And my prediction is that the excitement and conversation around “Queen’s Gambit” is going to be short lived, because any day, there will be another big Netflix original series hit, and I think that’s OK. Netflix’s strategy is very kitchen sinky. I mean, you guys, remember “Tiger King,” which was a huge cultural conversation? That was already months and months ago. That was March!
Since then, we’ve cycled through Netflix hit after hit after hit, and that’s just what the company does, and what it wants moving forward. It doesn’t need really one tentpole show. It has a number of short lived, giant hits.
ADAM SHAPIRO: Yeah, isn’t that going to be the recipe for success? And I just got to correct you on “Queen’s Gambit.” Just the cars alone. The shots of the period cars from the ’50s and ’60s is worth it. But isn’t that the key? Because who wants to wait– I got to wait till 2023, I think, or ’22 to get season four of “Ozark.”
So isn’t that the way to do it? Do one season, seven or eight episodes, have a hit, then go on to the next project.
DAN ROBERTS: Well again, Adam. Ozark’s been successful, but look at “Queen’s Gambit.” It’s a limited series, meaning that the show is over. There won’t be a season two. Netflix does a little of everything. Remember the reality show, “The Indian Matchmaking Show.” That was a huge success. Everyone was watching that. That was already months and months ago. Remember “Love is Blind?” That was a mega success. Everyone was talking about it. That already feels like an eternity ago.
Netflix, the way it does things with the amount of cash it invests in these original programs, it can stand to have hits that two months after they’ve aired, no one’s talking about anymore. So soon enough, we’ll be talking about the next one.
Disney, it’s a real long term approach using Disney’s own IP, Star Wars spinoffs. And look at the list of the other original shows that are coming soon to Disney Plus. They’re all Marvel and Star Wars spinoff shows. And that’s OK. Two very different strategies.
ADAM SHAPIRO: So much for Quibi.
SEANA SMITH: And Dan, as you were talking, I realize that there’s– I think that there’s just so much content out there, and it’s almost impossible to keep up with at this point. They have only seen about 10% of the shows that you mentioned, so I certainly know at least some of my plans of what I’m going to do this weekend. But Dan Roberts, as always, thanks so much for joining us. We want to–
Add Comment