Walt Disney's (DIS 1.54%) most recent feature film, Black Widow, is a success -- the biggest box office draw since the pandemic took hold early last year. That's good news for theater chains like Cinemark Holdings (CNK -0.17%) and AMC Entertainment Holdings (AMC -0.88%). The bad news: The very same movie saw a similarly strong showing outside of the movie theater industry's reach by also being offered through at-home streaming.
Shareholders of any of these outfits can't afford to ignore the fact that both approaches clearly have their place in a post-pandemic world. One side of the table, however, has much more to lose than the other.
Scarlett Johansson in Black Widow. Image source: Walt Disney.
By the numbers
The movie industry just had something of a moment, driving $115.6 million worth of domestic box office ticket sales last weekend, according to Box Office Mojo, a film business data platform owned by Amazon's IMDb. That's the best weekend since the pandemic effectively shuttered the theater business a little over a year ago.
Investors can thank Walt Disney, mostly. Its brand-new power flick Black Widow produced $80 million worth of ticket sales at domestic box offices (again according to IMDb), with another $78 million worth of ticket sales coming overseas.
That's even better than the latest installment of the Fast and Furious series, F9, which offered a glimmer of recovery hope for movie theaters just a couple of weekends ago with its domestic opening weekend of around $70 million.
Data source: IMDb. Chart by author.
Shareholders of AMC and other theater chains like Cineworld Group (CNNW.F) and the aforementioned Cinemark Holdings, however, need not pop the champagne corks just yet. The very same film also drove $60 million worth of sales from existing Disney+ subscribers (according to IMDb), who clearly couldn't wait to see the film, but just chose to watch it from the comfort of their own homes.
Sure, actual physical theaters still reign supreme. Keep things in perspective, though.
The modern theater business has had decades to figure out and refine the pricing of tickets and drawing a crowd. The business of streaming first-run new releases to consumers at home was effectively nonexistent until April of last year when Comcast's (CMCSA -0.52%) film unit Universal redirected Trolls World Tour (sometimes referred to as Trolls 2) from then-shuttering theaters to streaming platforms.
It was a huge success at the time, given that it is an animated film aimed at children. This success is a big reason that a slew of other direct-to-consumer first-run films, including Disney's live-action version of Mulan, have followed the same distribution path -- largely bypassing theaters altogether in the meantime.
Broadly speaking, these digital first-run films haven't done as well as they plausibly would have fared as true theatrical releases. But given that the model is only a year old and consumers, as well as studios, are still learning the business, the modest success it's produced thus far is encouraging. Indeed, the fact that Walt Disney for the first time ever disclosed revenue figures for a streaming release vaguely suggests Black Widow's take improves on Mulan's success as an at-home title.
A scene from the Disney live-action remake of "Mulan." Image source: Walt Disney.
Keep it in perspective
The spin since this past weekend's data was tallied has been mostly bullish, and understandably so. The numbers do suggest there's a place for movie theaters in an environment where consumers may be forever wary of exposing themselves to some sort of health risk.
With nearly one-third of sales for a blockbuster title like Black Widow coming outside of theatrical circles, however, shareholders of names like AMC and Regal Cinemas' Cineworld should be concerned. The business can't afford to lose nearly one-third of its revenue.
And that figure may be optimistic itself.
Remember: Most consumers have been partly or completely cooped up for months to evade the coronavirus. These moviegoers willing to brave a trip to theaters may have been desperate to achieve any sense of normalcy. A chance to see this particular film at this particular time might have been more of a one-off and less of an indication that things are easing back to their pre-pandemic condition. We won't know for sure where people are mentally until we see numbers for a few more high-profile theatrical releases as well as a few more major movies offered up as a direct-to-consumer option.
Then there's the not-so-minor fact that as big as last weekend was, even with the pandemic being abated, the film business remains well below its typical pre-pandemic revenue.
The good news is, at least we know what benchmarks to keep tabs on. The bad news is, seeing this modest amount of success in premium streaming is enough to raise serious questions.
