Kim Masters on Hollywood’s Year of Wishful Thinking

Kim Masters on Hollywood’s Year of Wishful Thinking

Imagine any top film studio exec or producer reading Jason Kilar’s recent Wall Street Journal opinion piece, in which he called 2022 “one of the most consequential and anxiety-ridden years in Hollywood history.”

“No shit, Jason,” most of them undoubtedly thought. “Thank you, arsonist, for sharing your wisdom about the fire.” Or something like that. Kilar has yet to be forgiven for Project Popcorn, the shock decision to throw the entire Warners 2021 slate onto the nascent HBO Max streaming service the same day the films premiered in theaters. Asked about the past year’s weak overall performance of theatrical releases, one high-level studio exec reflects the opinion of many, saying, “Without question, Kilar fucked things up so badly in terms of the general health of our industry that we’re going to be feeling those reverberations for a long time.”

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Obviously in a world battered by a pandemic, Kilar isn’t solely responsible for the troubles of the movie business. And though he was the most extreme, he wasn’t the only industry boss to seize the pandemic shutdown as an opportunity to tighten theatrical windows. NBCUniversal’s Jeff Shell did it, forging a multiyear deal with theaters allowing a window as short as 17 days for movies that open under $50 million, or up to 31 days for movies that perform better. (Note: 800-pound gorilla Chris Nolan shredded that and opened up a nice, big window when he agreed to make Oppenheimer for the studio.) The pre-pandemic standard of 72 days seems like something from another century now.

An informal (and mostly anonymous, in the interest of candor) survey of top studio execs reveals that they also have plenty of ire for Disney’s CEO of Christmas Past, Bob Chapek, who sent Pixar’s Luca, Soul and Turning Red straight to Disney+. “Chapek fucked up one of the great movie businesses of all time,” says one top industry exec. “Disney for years had won the movies. You conditioned your audience that Disney animated events are no longer special.” An agent also fears the damage will last: “He’s hurt the long-term family market, obviously. That’s not going to be so fast to come back.” Disney has yet to say how its approach might change with Bob Iger at the helm, but we do know that such decisions won’t be in the hands of a now-fired theme-park executive (Chapek) and his top lieutenant (Kareem Daniel).

Just as the industry is sharply pivoting away from the fevered pursuit of streaming subscribers above all else and back to the old-fashioned notion of making money, executives at legacy companies are reaffirming their vows to the magic of theatrical. “What makes a $10 million Jason Blum movie feel like a movie and a $15 million House of Dragon episode feel like a TV show?” says the top exec at one media company. “A theatrical launch, and even more so, the marketing.” Even for people who haven’t gone to see a film in the theater, he adds, the theatrical run makes the picture feel more like an event, while even a film as costly as Netflix’s $200 million Gray Man “doesn’t feel like a movie.” (Obviously, Netflix would not agree.)

Still, studios hardly want movies playing to empty theaters only in the hope of making them more alluring to stream. The question is whether audiences will really start showing up regularly, allowing the studios to reclaim the wonderful waterfall of money that comes with success.

Some of the studios seemed prepared almost to will audiences to return. Bloomberg reported that Amazon plans to spend a billion dollars a year on theatrical movies from MGM, ramping up to 12 to 15 films a year. (Management may soon find that theatrical movies can blow through a billion dollars pretty fast.) Warner Bros. Discovery’s David Zaslav, another newcomer to the film game, was quick to jettison the idea of making movies for streaming altogether. “When you’re in theaters, the value of the content and the overall viewing experience is elevated,” he said in an August earnings call. “Then, when the same content moves to [premium video on demand] and then streaming, it is elevated again. As films move from one window to the next, their overall value is elevated, elevated, elevated. We saw this clearly demonstrated with The Batman and Elvis.”

When Paramount named Brian Robbins head of its film studio in 2021 — after firing Jim Gianopulos for fighting too hard to protect exclusive theatrical windows and supposedly not pivoting to streaming fast enough — many in the industry saw the change in leadership as a sign of Shari Redstone’s quest to prioritize growing Paramount+ above all else. Turns out that Gianopulos left five No. 1 hit movies in a row in the pipeline. The big one, of course, the one that demonstrated what movies feel like and what they can do in success, was Top Gun: Maverick. Whatever else one might say about him, Tom Cruise was the movie business’ MVP of the pandemic era: He not only provided proof of concept with Maverick‘s $1.5 billion gross at the global box office, but he also powered the production of Mission: Impossible 7 through the darkest days of the pandemic while swatting away senior management’s efforts to shorten his old-school theatrical window.

Paramount’s Robbins says he always believed in making movies for theaters and wants to ramp up to 12 a year. He thinks a 45-day window generally feels like “the sweet spot.” Whatever the timing of his buy-in to this idea might have been, this year Robbins seems to have been the first studio chief to take a movie that had been intended for streaming and repurpose it for a theatrical release. The bet paid off: The horror mystery Smile, made for a modest $17 million, has grossed $216 million worldwide.

Even with the spectacular performance of Top Gun and a handful of other successful films, it has been an anemic year for movies. Through the first week of December, domestic theatrical grosses (about $7.2 billion) fell about 35 percent from pre-pandemic numbers in 2019, according to Comscore. There were also roughly 35 percent fewer wide releases (67, as opposed to 105 in 2019), largely due to COVID production stoppages and postproduction delays. That’s a recipe for trouble. “To me it’s not just about the number of releases, but about the frequency and consistency of their release,” says Comscore’s Paul Dergarabedian. “It’s a momentum business. When that’s not happening and you have Wakanda Forever five weeks in a row at the top of the chart, that’s not a formula for success. You can’t just have one movie every few weeks that’s doing well.”

The number of wide releases — movies with some meaningful exclusive window — is expected to increase to something in the neighborhood of 106 in 2023, giving studio executives hope. “Volume was so low this year that people threw their hands up,” says a top studio exec. “You go on Fandango and nothing is there. After a while, you stop looking.”

Adult dramas — aka awards fodder — have performed especially miserably. Various theories have been put forward as to why. One high-level film executive says that recovery for the genre will “particularly take time. I think it will. It doesn’t have to come back to 100 percent but to 80, 90 percent.” Another expresses more skepticism. “Adults are fine with waiting. I don’t need to see The Fabelmans in a theater.” (Harsh words about a Spielberg movie, but here we are.)

If all this is going to work, one distribution executive says, it would be helpful if studios moved toward greater consistency on the window issue — though not in a collusion-y way, of course. “You’ve got major studios with 17-day to 31-day windows and others with a 45-day window,” says one exec. “When you’re fed a diet of some meals at home and some not, the result of that is a missed sale.”

This story first appeared in the Dec. 16 issue of The Hollywood Reporter magazine. Click here to subscribe.