Just a few years ago, the perception among media executives was that theatrical releases had no benefit for their streaming services. However, a significant shift has now occurred, with many believing the opposite. Amazon Studios' decision to invest a substantial amount in "Red One" and release it in theaters showcases this changing mindset.

How Theatrical Releases Impact Streaming Success

The Past Decade's Streaming Strategies

For much of the past decade, Hollywood executives were focused on catching up with Netflix. They believed that the only way to increase subscriber numbers for their own streaming services was by either significantly narrowing the time between a film's theatrical release and its appearance on streaming or by releasing them simultaneously. Disney's "Black Widow" and Warner Bros.' "Dune" are prime examples of this approach. But this wasn't the only strategy considered. There was also the idea that streaming would allow movie studios to spend less on expensive theatrical marketing and rely on algorithms instead.However, the industry has now come to a different conclusion. The key to making a movie a streaming success and attracting new subscribers is to first release it in theaters. This is because all the elements that make theatrical movies successful, such as expansive marketing and public relations campaigns and valuable word of mouth, continue to have an impact once the movies reach the home.

Amazon Studios' "Red One" Experiment

Amazon Studios spent a whopping $250 million to make "Red One," a comedic holiday action film starring Dwayne Johnson and Chris Evans. The company then pushed the film into more than 4,000 theaters and spent tens of millions more on marketing. At first glance, with only about $80 million in domestic box office receipts in recent weeks (with half going to theater operators), it seemed like a huge investment gone wrong. But Courtenay Valenti, the company's head of film, had a different perspective. "We did this for a very specific reason," she said. And that reason was to make it a streaming hit. This shows that even with the initial box office performance, Amazon still saw value in the theatrical release for its streaming goals.

The Impact of Theatrical Releases on Streaming Success

It's clear that theatrical releases play a crucial role in the success of streaming movies. The extensive marketing and public relations efforts during the theatrical run create a buzz and generate word of mouth that continues to influence the movie's performance when it becomes available on streaming. This is not just a one-time boost but a lasting effect that helps attract new subscribers and keep existing ones engaged. For example, when a movie has a strong theatrical presence, it becomes more likely to be discovered and talked about by a wider audience. This increased visibility leads to more people subscribing to the streaming service to watch the movie. In contrast, movies that bypass theaters and go directly to streaming often struggle to gain the same level of attention and popularity.In conclusion, the industry has realized that the combination of theatrical releases and streaming is the key to success. By leveraging the strengths of both platforms, movie studios can maximize their returns and attract new audiences.