Several years ago, I went to see to see a movie along with four friends. I think it was the movie Moonlight. The more I sit here thinking of it, I’m pretty sure that’s what it was. It was a fun evening at the E. Street Cinema in Northwest DC. I think the tickets were $13 apiece. Times have changed just in the last couple of years.
During 2020, resulting from the Covid-19 pandemic, people began buying movies at home. Most businesses shut down. Some of them shut down temporarily, while others closed for good. To try and recoup some of the financial loss, some production companies have been showing more of their new releases via various streaming services. All the new movies I wanted to see aired on either Disney Plus or HBO Max. There were only two that interested me. I primarily watch old movies and television shows, most of which no longer air currently. I’m an “old rerun” type of guy. There is a long list that I like, and those shows are what I watch nearly all time. . . until a new movie comes out that I might want to see. I’m glad movies are streaming. I haven’t felt compelled or inspired to go to a theater for a movie lately. That’s a sign of the times.
I can’t see how theaters can survive. Suicide Squad is streaming on HBO Max, one of the movies that I wanted to see. To watch it, you only need to subscribe for $14.99 with no long-term commitment. You can watch Suicide Squad along with all the other movies streaming on the platform for a whole month, or you can choose to re-watch a movie as many times as you like, and your wife/husband and three kids can watch too — all for that same $14.99. If you’re smart like me, you’ll unsubscribe as soon as you subscribe. I do that a lot. I also do that a lot for services offering a free trial. Your service continues for the duration you expected. I know me. If I wait, I’ll forget and then I’ll get charged beyond the free trial or get charged for an additional month when I want to spend that. That’s how I do it. It’s more relaxing and enjoyable watching at home. If I need to make a bathroom break, I can pause it – – – or if I miss something or if there’s a particularly good or funny part, I can rewind it and watch it again. I do that a lot too. Talking to friends and coworkers, a lot of people stay home and stream movies.
Is that what you do too? You probably do. You could go to a theater though, and that fictional family I referenced above could too, as they are welcoming patrons back, and that would cost that whole family about $65 in ticket sales alone. With concession sales assuming everyone got a small popcorn and a small drink, you’d spend about $150. But come on. Let’s be real. Many theaters today offer wings, subs, pizza, burgers, nachos, fries, all kinds of candy, and alcohol. You do the math. Theaters are missing out on all that revenue when people watch a movie at home. Everybody knows most of their money is made from food purchases. The movie ticket prices consumers pay is generally at cost.
Now, if a movie doesn’t make a profit, like with any business, it can hurt, especially an indie film or those that go straight to video. But even a blockbuster can suffer too if there’s no profit. But production companies are like any other business. They are entitled to business tax deductions, including their losses. So, they can recoup their loss that way. They can also recoup it in two other big ways too.
First, there are unexpected bonuses. Did you ever see the TV show, Inside the Actors Studio, hosted by John Lipton? It was a very popular interview type show featuring famous actors talking about their life on and off screen. One of my favorite episodes was the one with Shirley MacLaine. Though she’s not on my top 10 list, she is someone I always liked. She was so adorable and lovely on that episode. She mentioned this issue of movies and TV shows not making a profit. She said a production company might lose on one thing but win on the next — and sometimes they don’t just win: they win big, meaning a film sometimes may do much better than projected. There are many of them. One that comes to mind is the Columbia Pictures film, Kramer vs. Kramer, starring Dustin Hoffman and Meryl Streep. They spent about $8 million producing it; that movie raked in more than $170 million. That’s an enormous profit. Another example of this is the 20th Century Fox film, Mrs. Doubtfire starring Robin Williams and Sally Field. The budget was roughly $30 million, and it made more than $440 million.
Secondly, production companies make money through the sales of licensed promotional material. This includes caps, posters, shirts, and desk accessories (i.e., pens, cups, note pads, etc.) just to name a few. I used the term “licensed promotional material” because there is some counterfeiting out there, and those items are unauthorized (and illegal) and go in the pockets of the counterfeiters, much like with the people selling the fake Chanel, Louis Vuitton, or other designer knockoffs. Additionally, DVD sales and digital downloads make the companies money too.
Even some of the not-so-popular films still interest consumers: people who may have liked a movie regardless how it may have been rated — and people who have no idea what it is and order it out of curiosity. They’re either pleasantly surprised and enjoy it or they agree with the low rating it received. Either way, it’s additional Benjamins in the pocket of the production company. Depending on the show or the movie, the actors can make residual money too. Some do, some don’t. Like, the lead actors in Seinfeld and Friends made (make) millions in residual income; the actors in Gilligan’s Island and The Brady Bunch didn’t earn any syndicated money. You must work it into your contract up front. That’s just good business sense.
Both good and bad movies can be found on all the streaming services. Lots of them. Production companies don’t bring in nearly as much money via streaming the movies as they can at a theater for reasons I noted above. There are probably many reasons other than this that the companies won’t make a profit. It’s no wonder some of them don’t last. We saw this recently with the struggling Twentieth Century Fox. Fox couldn’t sustain and it because it was struggling so severely was absorbed into Disney. To the average moviegoer, it’s all the same. They don’t care. Just give them a good film.
The ones who really suffer the most are the employees who work for the production companies and those working at the movie theaters – especially the theaters. It’s hit or miss with them. One theater near me is open and another is still “closed temporarily” according to a sign in the window. Temporarily may become forever, much like the Madame Tussaud’s at 10th and F. NW in DC. Those closed establishments have been closed since March 2020. Businesses are very volatile. I hope those receiving the COVID-19 bailout money compensated their employees. Afterall, that’s why the $900 billion bill got passed: not only for enhanced and extended unemployment benefits but also for businesses to take care of their employees. I wonder how many businesses paid their staff properly with that money. I’d love to know the answer to that.