Sony's Bold Strategy: Can Box Office Disasters Become Streaming Triumphs?
The Hollywood Dilemma:
Sony Pictures is embracing the inevitable rise of streaming while recognizing the enduring significance of the box office. But here's the twist: they aim to boost revenue from streaming, specifically targeting movies that underperformed at the box office.
According to Bloomberg, Sony is exploring a new pricing strategy for streaming services like Netflix. Instead of relying solely on box office success, Sony wants to base streaming fees on streaming performance. This approach challenges the traditional model, where Netflix pays a fee for each movie based on its box office earnings.
A Controversial Idea:
Sony's proposal stems from the belief that box office sales don't always reflect streaming potential. For instance, 'Madame Web', a box office flop, became a streaming sensation on Netflix, outperforming even Sony's hits. This isn't an isolated incident, and Sony aims to capitalize on this trend.
However, this strategy faces skepticism. As Bloomberg notes, even within Sony, there's doubt about the plan's effectiveness. The box office remains a trusted metric for determining a movie's value. Imagine Netflix suggesting that a blockbuster like '28 Years Later' is worth less due to its popularity—an argument Sony would likely reject.
The Streaming Wars:
Sony, unlike other studios, doesn't own a streaming platform. While they own the Alamo Drafthouse theater chain, they've chosen to stay out of the streaming wars. Other studios, like Paramount and Universal, have deals with streaming services, ensuring their movies are showcased on their platforms first. These deals are part of a new streaming economy, where studios seek to maximize revenue from their film catalogs.
Sony's unique position leaves them negotiating with streaming giants like Netflix, Amazon, Hulu, and HBO Max. These services are interested in Sony's movies, but agreeing to Sony's proposed model could set a precedent that boosts the value of box office flops while maintaining the premium value of hits. It's a delicate balance.
A Risky Gamble:
Sony's current Netflix deal is lucrative, bringing in hundreds of millions annually. Any new deal with a rival streaming service would likely be equally profitable. However, Sony's plan to extract more value from box office failures seems questionable. It may appear as a desperate move, especially as Hollywood grapples with declining VOD and DVD sales and the unpredictability of the box office.
The 'wait to stream' mindset is a contributing factor to box office flops, but Sony's request to streaming services seems challenging to justify. With the potential Paramount/Warner Bros. merger looming, Sony's strategy to secure its future is understandable, but it may be a misstep.
Sony's relationship with Netflix is significant, but it's a give-and-take dynamic. While some deals benefit Netflix more, Sony is determined to maximize revenue. In the era of declining exclusivity, this strategy might be well-intentioned but misguided.
Commentary:
Sony's plan raises questions about the future of Hollywood's business model. Is it fair to reevaluate the value of movies based on streaming performance? Or should box office success remain the primary indicator? Share your thoughts on this intriguing dilemma!
