Streaming Services Board Up the Box Office

by January 25, 2021
Without box office revenues, entertainment industry analysis becomes more challenging and generally more abstract for journalists. (Photo via Pexels.com)

The entertainment industry periodically grumbles about a lack of transparency from streaming services like Netflix and Hulu. Specifically, industry analysts have criticized these platforms’ inability, or refusal, to disclose clear viewership numbers, calling it at odds with the tradition of studios disclosing box office grosses.

However, the pandemic has tilted the balance of power toward streaming services, and with movie theaters struggling, even studios hesitate to disclose diminished box office revenues. Opacity is now the norm.

As such, business journalists covering entertainment should prepare to lose access to the reliable numbers that have fueled industry analysis for decades. They should expect to settle for other, less useful metrics.

Historically, media analysis firms like Comscore have gathered and compiled box office data from movie theaters to create revenue figures. Laypeople and top executives alike can then consult these to measure a movie’s success. 

Film distributors have never really been comfortable with this arrangement, which exposes their biggest failures for all to see. 

Most streaming services, on the other hand, never have to worry about their failures being revealed. They don’t charge à la carte for movies or TV shows, and so possess no direct analogue to box office gross. They have therefore simply opted out of reporting viewership numbers, except when it’s convenient for them.

These platforms can effectively speak a hit into existence, because who can contradict them? We don’t know whether a new movie on Netflix is a hit or a flop unless Netflix tells us — it’s Schrodinger’s film. Hulu is thrilled to trumpet in the trades that “Happiest Season” is its most successful original movie ever, but you certainly wouldn’t hear it announce (hypothetically) that “The Ultimate Playlist of Noise” is doing just OK, because it doesn’t have to.

How should we take it when Netflix tells us that 80 million “households” (vague) watched “Bird Box” in four weeks, which really means — by Netflix’s own admission — they each watched at least 70% of Bird Box? Even if the metric were foolproof, observers have no way of determining how viewership translates into revenue for Netflix, which, again, sells subscriptions, not individual movies.

Further complicating matters, not all streaming services share a business model, and even on the same platform, different movies are sold differently. 

When Disney released “Mulan” onto Disney+ last year, viewers paid $29.99 on top of $6.99 for a monthly subscription. But for “Soul,” viewers only needed a subscription. So even if significantly more people watched “Soul,” it wouldn’t bring in nearly as much revenue for Disney, an unlikely proposition in a traditional box office environment.

It might be tempting to dismiss these as temporary concerns that will fade when COVID-19 is under control. In reality, the pandemic has cemented this lack of transparency and dependence on streaming as the norm going forward. 

For one, studios are increasingly opting for “day-and-date” movie releases — in theaters and on streaming simultaneously — which Warner Bros. has locked in for 2021. 

More concerningly, even with traditional theatrical releases, studios are increasingly tempted to break protocol and withhold standard box office numbers. When Warner Bros. released “Tenet” into theaters last fall while the pandemic raged, the studio simply decided it didn’t want the public or its rivals to know how the film was doing for a while. Competitors claimed to be annoyed, yet Sony adopted a similar strategy with “The Broken Hearts Gallery” anyway.

Without box office revenues, industry analysis becomes more challenging and generally more abstract for journalists. Reporters can still point to a movie’s video-on-demand revenue or its position on video-on-demand charts (if the movie can even be purchased on demand). Otherwise, Nielsen publishes lists of most streamed media — not just new releases — and companies like MarketCast evaluate social media buzz surrounding entertainment.

In a year of mixed digital and theatrical releases, this muddle of unreliable statistics presents a real problem for journalists covering the entertainment business, who may be forced to take streaming services at their word. In theory, absent traditional box office statistics, any movie, no matter how small, can turn into a hit. It’s just that the people releasing those movies, not the people watching them, get to decide.