Like a half-filled glass, the box office numbers for “Black Widow” are either good or bad for theaters, depending on how you look at it. With an estimated $80 million in domestic theatrical box office, the Marvel Studios film has set a new post-pandemic high for North America and has shown that, with the right film, a large portion of the public is ready to come back to theaters.
But then there is the $78 million grossed from 48 overseas markets that are still hobbled by COVID-19, and the surprising decision by Disney to reveal the film’s revenue from its simultaneous premium paid streaming release: $60 million worldwide. Those numbers show that as the Delta variant of COVID-19 and struggles with vaccination in many key countries continue to cast uncertainty on the overseas box office, Disney will likely need the hybrid release model for the foreseeable future if its biggest tentpoles are to reach pre-pandemic levels of profitability.
And that could put a limit on how much theaters are able to profit from the six Marvel films coming in the next 12 months.
Domestically, Disney did not disclose how much of “Black Widow’s” paid video on demand (PVOD) grosses came from North America, but it did provide a clue by noting that domestic consumer spend for the film exceeded $100 million, which would give the film the third-highest opening for an MCU origin story behind “Black Panther” ($202 million in 2018) and “Captain Marvel” ($153 million in 2019).
That means that “Black Widow” had paid streaming revenue domestically of at least $20 million, revenue that Disney does not have to share with theaters.
While the usual caveat must be mentioned that interest in seeing a hybrid release film at home doesn’t necessarily translate to seeing it in theaters if it were released exclusively, the paid streaming option did have some impact on this weekend’s box office. After the film earned $39.5 million on Friday, industry estimates had projected a 30% Friday-to-Saturday drop. Instead, that drop was 41%, larger than the 25% day-to-day drop for “F9” or the 30% drop for the 2018 MCU film “Ant-Man and the Wasp.” This suggests that a portion of the usual Saturday audience for a Marvel film may have been peeled off by the paid streaming option.
Overseas, Korea was the top market with $12.8 million grossed over five days, which is below the $20.9 million opening in that country for “Ant-Man and the Wasp” and also comes as Korean officials are preparing to tighten social distancing protocols for theaters and other businesses as the Delta variant spreads. In Japan, where the film grossed $3.3 million and only 15% of the population is vaccinated, a state of emergency has been declared to curb a potential surge in infections as the Tokyo Olympics are set to be held.
In Europe, “Black Widow” set post-pandemic box office highs in 15 countries, including the U.K., with $9.7 million and France with $6.9 million. COVID-19 infections have been increasing in recent weeks in many countries on the continent, most notably the U.K. and the Netherlands, where social distancing protocols have been lifted.
With the whole world in different stages of vaccination, Kareem Daniel, Chairman of Disney Media and Entertainment Distribution, reiterated the argument in favor of a “flexible” release strategy in a statement released Sunday.
“Once again, Marvel has delivered an exceptional film to the delight of fans worldwide with Black Widow achieving numerous milestones in the current marketplace,” Daniel said. “Black Widow’s strong performance this weekend affirms our flexible distribution strategy of making franchise films available in theaters for a true cinematic experience and, as COVID concerns continue globally, providing choice to consumers who prefer to watch at home on Disney+.”
That statement puts Disney in a very interesting position, considering that during Disney’s earnings call in mid-May, CEO Bob Chapek said that the next Marvel film, “Shang-Chi and the Legend of the Ten Rings,” would have 45 days of theatrical exclusivity. At the time, Chapek said that Disney went with the hybrid release for “Black Widow” to compensate for the still-recovering theatrical market while avoiding pushing back the long-delayed film even further, but believed that conditions would be better when “Shang-Chi” would be released in September
“We know the marketplace will recover more fully and that will make more sense,” Chapek said. “Flexibility is a good thing. At some point, you have to step off the dock and into the boat. Those, we will take a shot at.”
But that was before the Delta variant renewed concern among global health officials that the virus will spread faster among those that are not vaccinated, a major concern considering struggling vaccine campaigns in countries like Australia and Japan. Disney has already made its next theatrical release, “Jungle Cruise,” a hybrid release, but if the Delta variant slows down the process of rebuilding moviegoer confidence and loosening capacity restrictions in major countries, the temptation may grow to make “Shang-Chi” and other upcoming films hybrid releases as well.
Disney has a history during this pandemic of making one announcement about its movie release slate before changing things up in response to the constantly shifting state of the pandemic. “Mulan,” for example, was set to be released in theaters last summer before moving to PVOD, and the Pixar film “Luca” was initially announced at Disney’s Investor Day presentation as a theatrical release before moving to Disney+ at no extra charge.
So where does that leave theaters? On the one hand, “Black Widow” pushed overall weekend estimates for the domestic box office to $117 million, just 8% lower than the same weekend in July 2019 and the best total seen since February 2020. Even just a month ago, the box office wasn’t near this close to pre-pandemic levels.
And hybrid strategy or not, Marvel films are here to stay in theaters. Three MCU films will be released between Labor Day weekend and Christmas, all sure to bring strong turnout at cinemas. Next year, another three will be released from late March to early July, culminating in what could be next year’s highest grossing film, “Black Panther: Wakanda Forever.” As analysts and distributors have said for months, the box office could continue to see steady growth through next year, and the numbers for the Marvel movies to come could prove to be a microcosm of that slow but sure progress.
Let’s also not forget that “F9,” which was released exclusively in theaters, has so far grossed $541 million worldwide. While COVID-19 will keep it short of the $1 billion-plus heights of past “Fast & Furious” films, a $650 million-plus result for a film released in theaters just six months after vaccination efforts began would be a positive sign.
But other signs are pointing to the hybrid release strategy becoming a more viable option for the second half of 2021 for the studios that have the capability to utilize it — and no studio is in a better position to do so than Disney. Such a model concerns film financiers who still don’t know how day-and-date strategies would affect the post-theatrical ancillary revenue like TV rights that pre-pandemic films usually were able to profit from.
But Boxoffice analyst Shawn Robbins says it wouldn’t be surprising if Disney continues to give that up for PVOD revenue up front that it keeps a larger share of than theatrical revenue. Only 20% goes to Roku, Apple and other companies with platforms that subscribers use to access Disney+.
“A hybrid release Marvel film will still be a big boost for theaters, but this just means that theatrical exclusives will have to deliver even more for theaters,” Robbins said, pointing to films like “Venom: There Will Be Carnage,” “No Time to Die,” and “Spider-Man: No Way Home,” the one MCU film that is certain to be released only in theaters as it is a Sony title.
“There’s just so many variables still in play even with box office numbers ticking up that it’s still unclear what these PVOD numbers from ‘Black Widow’ mean in the long run,” Robbins added. “We still have a lot to learn about how comfortable some demographics are in coming back to theaters and whether some are willing to pay $30 consistently for the kinds of films Disney is offering.”