SEÑAL NEWS | RESEARCH WEEK #36

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THE NEW POWER OF THE PVOD WINDOW

WEEK #36 ∙ SEPTEMBER 2020

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THE NEW POWER OF THE PVOD WINDOW #WEEK 36 ∙ SEPTEMBER 2020

MOVIES WINDOWING MODEL CHANGE OVER THE YEARS

NOT EXHAUSTIVE ESTIMATES

Average Major Studio Movie Release Window 1997-2019 (Number of days from theatrical release to video release)

x.x%

DVD Era 1997-2007

Average Release Window

Streaming Era 2007-Present

New Universal / AMC Release Window

‘97-’07 CAGR

-2.1%

172

‘07-’19 CA

Growth / Decline Rate (CAGR)

GR

Based on the impact of Covid-19, AMC and Universal reached an agreement to reduce the theatrical window to only 17 days before allowing premium VOD rental ($20).

139 -4.4%

81

17 1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

New Market Entrants

Other Notable Events

Launches Video on Demand

PVOD POWER The PVOD window, like the deal Universal and AMC have recently agreed, is the most stable for exhibitors and studio groups, offering comparable returns for cinemas and increased revenue for the studio on mid- and lower- tier releases. Top-tier titles are likely to be better monetized via traditional windowing models.

THE VALUE OF THE FIRST THREE WEEKS Movies, regardless of size, tend to make their money in theaters in the first three weeks that they’re released.

Week:

1

2

3

4

5+

Launches Video on Demand

Files for Chapter 11 bankruptcy

Sources: Red Chalk Group Analysis; National Association of Theater Owners; Company’s stats.

Major studios include Disney, Fox, Lionsgate, Paramount, Sony, Universal, and Warner Bros.

A NEW BUSINESS MODEL, THE UNIVERSAL AND AMC DEAL UNIVERSAL HAS SIGNED A DEAL WITH AMC TO SHORTEN THEIR EXCLUSIVE THEATRICAL WINDOW TO 17 DAYS

First 17 Days

Day 18+

$200 $175.1 $160.8

$174.0

13%

23%

$158.9

26%

$159.2 36%

26%

87%

77% $111.0 $100

74%

74%

20%

64% $83.1

80%

$73.3

32%

34%

Source: BoxOfficeMojo; EMC Analysis.

Note: Domestic Box Office is U.S. and Canada; Chart represents Top 10 total DBO for films released in 2019; There were 7 additional films released in 2019, which on average generated 82% of domestic box office in its first 17 days.

$45.9 12% 88%

$60.7 68%

66%

21% 79%

$0 Jan 18

Feb 22

Mar 22

May 31

Jun 7

Jun 28

Aug 2

Aug 16

Sep 27

Dec 25

100%

50%

THE MOVIE BUSINESS MODEL, UP TO 2020 ($ millions)

> $100 million film

$50-100 million

< $50 million

0%

Source: MoffettNathanson

PVOD BIG NAME COVID-19’s negative impact on cinema box office revenue will likely accelerate a move towards new movie windowing models. Disney´s “Mulan” will not be released theatrically but will be available to watch as a premium release on streaming service Disney+.

Global Box Office Film Rentals (Studio Share) Film Marketing Gross Film Profits (Pre-Negative/Participations)

$1 Bn Film $1,000 $500 ($110) $440

$1.5 Bn Film $1,500 $825 ($150) $675

$2.0 Bn Film $2,000 $1,100 ($175) $925

Home Entertainment (EST, DVD, Blu-ray, VOD, physical rental) Home Entertainment Marketing Gross HE Profits (Pre-Negative/Participations)

$175

$250

$300

($40) $135

($50) $200

($75) $225

Global Television Film Profit (Pre-Negative/Partcipations)

$150 $725

$200 $1,075

$250 $1,400

($250) ($100)

($300) ($175)

($325) ($250)

$375

$600

$825

Negative Cost Participations Film Profits to Studio Source: LightShed Partners

THE POTENTIAL OF THE PVOD BUSINESS ARE CONSUMERS WILLING TO PAY?

50.23% YES 49.77% NO HOW MUCH WILL CONSUMERS PAY?

21%

of consumers said that they wold pay a monthly subscription to access all new movie releases.

Source: Streamlytics