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Hybrid Releases Are the Future of the Movie Industry

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When it comes to releasing a movie, there is one clear consumer-first practice: a hybrid release. Release a movie both in theaters and on streaming platforms, and it has the ability to be a win/win.  

It seems like a no-brainer—you combine the best of both worlds, giving consumers the options they desire and media brands the opportunity to reach the most viewers possible.

So, why are so many in the industry still insisting on one or the other? The answer might be more complicated than you think.

The Opportunity

The film industry has essentially been flipped on its head, as box office revenues fell 71% in 2020. Habits accrued during this period remain embedded in consumers, and trends already developing prior to the pandemic—namely a growing shift toward streaming—have accelerated by years. 

We know how much opportunity technology (the cloud, in particular) can bring to the media space to unlock new use cases, new revenue streams, save money, and bring more innovation.  

The movie industry should always remember to remain connected with the audiences they are ultimately making decisions for. Consumers want and expect flexibility in how they view content. By working together, the industry can help provide just that.

The ball is in the studios’ court. There are clear opportunities for them to embrace the power of technology and work differently to better meet consumers where they are.

The Obstacles

The hybrid release can easily capture a new and different audience. But there are two main obstacles standing in the way.

The first is agreements between studios and major box office associations. There is real fear that doing away with an exclusive box office release will cause large theater chains to refuse to carry the movie at all, or face revenue shortfalls protected by an exclusive release window that may ultimately lead to their demise as a viable distribution model.

Studios do not want to lose the box office channel entirely, so having a large exclusive distribution window is important to the overall partnership (and in some cases agreements) between studios and box offices. Box office revenue is a major moneymaker for the industry, and a great way to reach consumers with a unique experience.

Plus, significant socioeconomic differences mean home video experiences can vary greatly: Some consumers have personal home theatres that rival box office-level entertainment, while others face stark declines in the immersive audio and visual experience theaters deliver.

Home theatre solutions can be pricey, meaning theaters must remain successful for there to be equity in the way consumers engage with movies, and for the industry to ultimately prosper overall.  

The second obstacle is actors’ and executives’ loyalty to the silver screen. Many have made no secret of how they prefer their work consumed: They desire to protect the memories of the experience that they grew up with, and they are reinforced by legacy business models and the power of this industry to develop and protect legacy.  

While these preferences do not fully embrace the art of the possible, they often align to the incentives and payout structures that underpin the industry. These players obviously carry a lot of weight when it comes to the release decision, and their desires further motivate studios to heavily prioritize the theater over the streaming service.

These disconnects are further coupled with the fact that not every studio has a direct-to-consumer streaming service. If that is the case, a third-party streaming platform would likely command a good chunk of the movie’s revenue.  

The Way Forward

The movie industry is walking a tightrope, and they should proceed as a tightrope walker would: carefully. While we know that a hybrid release is likely the most consumer-centric option longer term, the industry is in an experimentation phase to land on new best practices and return on investment models across stakeholders.

Studios should experiment with new technologies, new release strategies, and new advertising techniques. Fortune favors the bold, and the companies that lean in and embrace disruption the most can ultimately come out on top.

This is more than a boost to the bottom line—this is a sensible societal shift. It allows those without access to a movie theater to consume movies online, and those without a strong internet connection to do so in theaters. More options means more equity.

The years ahead will likely require numerous cycles of testing, failing, learning, and iterating. But if companies commit to harmony between streaming services and the box office, they—and their consumers—can be better off for it.

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