The Pandemic Induced Fire Sale In Hollywood Begins

The Pandemic Induced Fire Sale In Hollywood Begins

Well, well, well.

Following a report this week that Apple—who’s streaming service Apple TV+ isn’t exactly doing big-time numbers right now—is looking to buy up non-Apple series and movies to beef up its catalogue, Deadline reported Tuesday that Apple has entered an agreement with Sony Pictures to licence Greyhound, the WWII naval ship drama written by and starring Tom Hanks. According to the report, Apple paid somewhere in the ballpark of $US70 ($106) million to licence the film, which was previously set to premiere over Father’s Day weekend but was derailed by the current coronavirus pandemic. Deadline said that while there’s no official release date yet, the film will likely debut on the platform soon. (Neither Apple nor Sony immediately returned a request for comment.)

This deal is significant for several reasons. For one, the deal confirms that Apple is on the hunt for quality content produced by outside studios to attempt to reel-in and perhaps even retain subscribers, as it both competes with an ever-growing list of rival streaming services. Second, according to CNBC, Hanks himself had to approve the deal between Sony and Apple, and marks the star’s first foray into a straight-to-streaming release.

As one of the biggest names in entertainment, this is big—even if other household names have been doing it for years on platforms like Netflix, Hulu, or HBO. But third, and most importantly, the deal signals the beginning of what is likely to be a growing number of studios shopping around bigger budget productions amid ongoing theatre closures and lockdown orders.

According to CNBC, one of the foremost reasons that Sony opted to go on demand was a concern over delayed releases. Citing sources familiar with the matter, CNBC reported that Sony feared it wouldn’t be able to secure a release slot, given the number of films being pushed back later into the year and into 2021 right now. According to one source who spoke with CNBC, Sony actually approached both Apple and Netflix about licensing the film. But Apple ultimately won with a rumoured 15-year, $US70 ($106) million licensing contract—one that benefits both Apple as well as Sony, which reportedly spent some $US50 ($76) million to produce the film.

Right now, the future of theatres remains highly uncertain. And with that in mind, industry titans like Universal are turning to streaming services for on-demand releases of even assured blockbusters. This is likely why, when Trolls World Tour made an absolute killing with its pivot to at-home release due to the covid-19 crisis, one of NBCUniversal’s top-ranking executives said it was expecting to release films both in theatres as well as on-demand—a comment that led to an absolutely brutal public feud between Universal and AMC.

Trolls World Tour, it should be noted, was sort of the perfect use case for digital release, given the number of people who are sheltering at home with kids right now and looking for something to watch. Disney+ is doing the same with its forthcoming movie Artemis Fowl. According to one recent survey, 70 per cent of the roughly 1,000 respondents said that costs being about the same and provided they had the option of both, they’d rather see a new release at home rather than in a movie theatre.

One question that remains is how studios that own existing streaming services plan to release big-budget films that were originally meant for theatres. It makes sense for studios like Amazon or Disney to release their films on their own platforms, given the sheer number of subscribers on their respective services (subscriptions that, during the pandemic, continue to balloon). And to be clear, most major studios do—through one acquisition or another—have a service that they could, in theory release on. But Sony would be incredibly foolish to release a big bet film like Greyhound on, for example, Crackle (a service I’d be curious to know whether Hanks even knows exists).

Similarly, it’ll be interesting to see whether a veritable heavyweight like NBCUniversal looks to make Universal Pictures releases widely available through services like Prime Video or iTunes, or whether the plan would be to release on its own yet-to-officially launch Peacock. It would seem the better move would be to try, as Sony did with Apple, to make back what they spent on production by shopping the film around for licensing deals. And with production stalled or slowed by the current covid-19 outbreak, companies like Apple are clearly willing to pay a pretty penny for them, too.

In other words, Hollywood’s is beginning to have its very own pandemic-induced blockbuster sale season, and streaming services are ready to hit the aisles.