Pop-Culture Predictions #2

Hi, I'm Drew, a big nerd who happens to run a hybrid marketing and production company. I lead content and brand strategy and use data to build insights that inform our clients' business decisions. In this weekly series, I'm going to pick a couple of pop-culture IPs and make a bold prediction based on past experience, real-time data, and a boatload of moxie. Here we go...

Prediction - DC Films & WB will double down on adult oriented streaming Superhero shows and win

The first part of this prediction is a bit of a layup as far as predictions go. Peacemaker has made some waves in viewership according to Parrot Analytics who said the show was the most in-demand original stream TV series in the world as of January 22. In numbers that's 69.5 times more in demand than the average series. (When they say average I'm assuming they're talking about Netflix's "Cooking With Paris" which is a dumpster fire of an idea for a show.) That said, this is a huge win for DC/WB who in the past has struggled to find a tone and premium storytelling that works for their TV universe. Someone smart must have shown them this Venn Diagram for success.

This leads me to the second part of my prediction - If they stick to the above formula and stop making superhero shows for everyone below the age of 21 (Say hi and bye CW's The Flash, Batwoman, Supergirl, The Legends of Tomorrow), I can really see DC carving out a winning set of shows on a premium channel like HBO that knows how to make really really good TV. For context on how good HBO is at making good content; They spend about 1/5th the amount of money on shows than Netflix yet walk home with more Emmy awards than any other platform on average.

Bottom Line: The fans want violent and real superhero shows (exhibit A: The Boys, Invincible), but they want them with their comic book icons like Green Lantern (a series currently in development) and perhaps Justice League Dark (also in development). I'll leave you with a final chart aka nail in the coffin for CW superhero shows and the sub-par "Titans" show compared to the recent Peacemaker in terms of interest online over two years. Hint... "Peacemaker" leaves them in the dust.

Volume of interest over 2 years of The Flash, Supergirl, DC Legends of Tomorrow, Titians, and Peacemaker.

Prediction - Valves Steam Deck will be another Atari Lynx disaster

A quick history lesson for anyone below the age of 40. Back in the 80s, the Atari Corporation was a titian in the gaming industry. Having released the Atari 7800 and 2600 which were both huge hits along with a series of popular gaming hits (hello Tetris) they were raking in $452 million dollars a year and looking to the future of gaming. They needed something big since they knew a little company called Nintendo was releasing the Nintendo Entertainment System and a charismatic plumber. So Atari puts all its efforts into mobile gaming. Like, bet the farm big. Enter the Atari Lynx, a handheld gaming console with 16bit color graphics that would retail for $180 (which is equivalent to about $380 today). I'll make a long story short and just say it didn't work out well for Atari cause Nintendo launched the Gameboy and ate their lunch selling 16 million Gameboys to Atari's 3 million Lynx. Some tend to think that ET killed Atari, it was actually over-investing in the Lynx. They actually made a Lynx II (silly rabbit) hoping for the best I suppose.

Enter Valve and their very impressive Steam Deck that promises to bring PC gaming quality and games to a mobile device. And damn if it doesn't look good. It also looks giant. I saw a guy holding one up to his head and it was no joke was as wide as the guy's shoulders. I suppose he could've been a small dude. Let's talk about price for a second. The el-cheapo model with only 64GB of space (which is like half of a Call of Duty Game these days) is $399. That's about $50 more than the OLED Nintendo Switch (yes, I know different audiences but they are both mobile game consoles). The prices go up from there to $529 and $649 respectively. If this is an IQ test for how to spend my money, I'm having a hard time justifying this investment. Steam clearly has a lot of R&D cash to have developed and built this beauty and pulling numbers from Statisa.com in 2020 they reached 120 million active players (wow!). I'm sure they did the math and thought if we just sold to 15% of those 120 million we'd be doing ok.

Number of monthly active users on steam worldwide from 2017 to 2020.

The difference is hardware is hard and supply chains are harder. There's a reason nobody has entered the arena against Sony, Microsoft, and Nintendo (sorry Meta/Oculus) because it's hard to make margins on hardware alone (note the recent purchase of Blizzard Activision to prove my point). If Valve is somewhat successful in selling millions of Steam Decks I wouldn't want to be in the boardroom the moment Microsoft announces their handheld gaming device that plays PC and Xbox games.

Bottom Line: I applaud Valve's effort here but all signs point to this being a flash in the pan of an idea and execution that Valve, if smart, will quietly walk away from over the next few years slowly phasing out the production of these. Otherwise this could be the beginning of the end for Valve as we know it if history repeats itself.

Prediction - The Next James Bond Will Not Be Idris Elba or any A-List Actor

I'm going to keep this short and sweet. Idris Elba will not be the next James Bond even though he would've been great. Here are a few reasons why.

I see the resemblance.

The script for the next film will more than likely determine the look and feel for the next bond more than anything. If we've seen anything in pop culture that represents the kind of debonair secret agent personality type for today's audiences look no further than the popular Netflix series Lupin and Omar Sy's eccentric but brilliant portrayal of an art thief. He's honestly a mix between Pierce Brosnan's charm and Timothy Dalton's wit. Unfortunately, he's French so MI6 won't be giving him his OO status. I honestly don't have a great prediction on who the next Bond will in fact be. I don't think we've seen him yet. There might be a film this year that comes out with a British star who just commands the screen as Craig did in Layer Cake.

Bottom Line: I am pretty confident that we won't see another Bond film for at least 5 years and it won't star Edris Elba or any current A-List British celebrity. The world needs to get through what it's going through now and I promise you they will wait for a perfect script and perhaps a series of scripts with an arc before launching into a new set of films. Or just go with what Insider.com says (Golding is dreamy).

I'll be back every few weeks with some more predictions. The value of a prediction is not accuracy (though it is better to be right than wrong), but the reasoning and conversation that the prediction catalyzes. Let me know if you think I'm right or wrong in the comments below!

Does Warner Bros Releasing Its 2021 Movie Lineup On HBO Max Matter In The Long Run?

2021, and still in quarantine.  COVID-19 brought us a completely new way of life.  We have had to learn how to adapt our home-life to accept our work-life, school-life, and gym-life.  Companies have had to adjust to working from home, even if they were reluctant to at first.  We have spent more time bathing in hand sanitizer, abiding (hopefully) by new state regulations, keeping our distance, and yet becoming more connected to people we never would have been able to before this.  (YAY THIS WONDERFUL COMMUNITY!)


Wonder Woman 1984 is the first of big titles slated to open at home.

In order to appease our new way of life, companies have also had to adjust how they do business.  This has resulted in many small businesses unfortunately closing, and large businesses completely re-doing their business plan.  Movie theatres, among so many others, have been hit extremely hard.  This has caused closures of theatres (in some cases permanently), large movie releases have been delayed, and the largest business that we never thought could be held back, the film business,  was basically placed on hold.  Due to this, one company has decided to release all their 2021 film line-ups directly to a TV near you!  That’s right…Warner Brothers is releasing their entire 2021 lineup on HBO Max (you know, just like the title says).  But why does this matter? We’re going to break this question down and see how this does matter, both from a consumer and a business point of view.

Live-action film Mulan, which was released at home on Disney+ for $30

First, we’re going to look at the business side.  Currently, the release date that has been set for the movie will be the same date that the movie will simultaneously be released onto HBO Max for one-month access.  This allows studios to maintain the relationship with movie theatre distributors while adjusting for the at-home streaming needs.  Those who do not have access to HBO Max, since it is localized, will have the ability to “safely” see the movie in theatres if they so desire.  Warner Brothers are considering this an experiment.  They released the hit, Tenet, in theatres during the pandemic, and ultimately lost hundreds of millions of dollars.  Releasing their line-up to an in-home streaming service is keeping them in the game with the likes of Disney +, who released Mulan earlier this year, as well as attempting to catch-up on lost revenue from the year that is 2020.

Historically, studios have viewed streaming services as the enemy, as they were taking away an integral part of the experience, i.e., going to the theatre.  Because streaming services are their own companies, if studios were to give their movies to them, the studios would then lose control of the distribution of the film, as well as lose the box office statistics.  Studios viewed the theatre as the only feasible way to make money, as it is considered a 1:1 profit relationship.  However, that is also because there has simply never been another option to finance box office film budgets.  It could be the whole “old school” thought process getting in the way, and resistance to change.  Now, though, especially due to the pandemic, studios have had to begin looking at releasing their films to streaming services.  With this new option, it is thought that the only way to be profitable is by releasing it to a streaming service they own, i.e.  Warner Brothers and HBO Max.  This is not only an experiment but also a gesture of goodwill pointing towards the potential future, and Warner Brothers are willing to be the guinea pig.  With 35 million subscribers, they will be giving audience members the chance to see hit movies, on either platform they desire (movie theatre or streaming at home), ultimately and potentially, increasing the viewer numbers. 

However, will it bring box-office smash numbers?  The initial thought is no, not likely.  There is so much money spent on the movie theatre business that many of you may be asking how will releasing on a streaming service increase revenue?  Let’s look.  If there are 4 people in a party going to a theatre, and tickets are ~$8 each.  That would be $32 for the box office, as food sales do not go into box office numbers.  If there are 4 people in a party at home, let’s estimate that the movies will be $30 (as that was the cost of Mulan) on top of the subscription fee.  That is an approximate ~$2 loss at the box office, for 4 people.  The trick here is the company is ‘assuming’ that everyone will be following the pandemic rules, and not going to other people’s houses.  What if a group of friends gets together, or 3 families sit in on one purchase of the movie?  That will actually result in a major profit loss.  If the 3 families are of 4 people, to make math easy, that would have been $96 which is now dropping to $30, resulting in a $66 profit loss.  We are obviously not in the board rooms to hear the meetings; however, this potential streaming option doesn’t look to be as profitable at first glance.  Will this mean the quality of movies has to drop?  Has this pandemic really shaken up foundations to that extent?

Are we destined to have to say goodbye to the deliciousness that is movie popcorn?

Now from the consumer side.  If you, like me, are thinking, “But what about the movie-going experience?!  The popcorn?!  The butter?!  The surround sound?!  The giant screen?!  THE BUTTER?!,” it may be time to begin mourning the loss of that delicious popcorn and it’s butter.  However, we can now think about the convenience; the comfort of our couch, home-made snacks, family movie time, and not having to put on pants or a bra to see a hit movie!  It can also result in savings for a family because, as stated above, we were only discussing box office revenue.  The movie theatre does its part for a family by providing the food and drinks, so a trip to a theatre for a family of 4 could easily be up to the $70 range, depending on what extra snacks and drinks are purchased (a key contributor to theatre profits).

The other side of this is, what if you don’t have that subscription service?  The way it seems Warner Brothers will be looking at it is if they release a hit movie they have already spent millions on that has people sign up for the service they didn’t already have, that would be more than the price of the film.  Those people would then continue the subscription service to watch some of the shows provided exclusively on that service (oh, hey Game of Thrones).  Once the movies that have been made prior to 2020 are released, it could be that film production budgets reduce, TV production budgets increase, making the two more similar in production values, and the subscription service more attractive for retaining customers.

So, does it really matter that all hit films from Warner Brothers will be released on HBO Max in 2021?  My thoughts are - I am stoked to see Wonder Woman 1984 at home with no bra on!  What do you think?  Leave a comment below!

 

References:

Alexander, S.(2020, December 3). Warner Bros will release all of its new 20201 movies simultaneously on HBO Max, The Verge, https://www.theverge.com/2020/12/3/22150605/hbo-max-warner-bros-movies-2021-simultaneous-release-matrix-godzilla-suicide-squad-space-jam

Zeitchilk, S. (2020, September 18). ‘Tenet’s’ dismal U.S. debut has some calling for a change in Hollywood’s approach to the blockbuster, The Washington Post, https://www.washingtonpost.com/business/2020/09/18/tenet-box-office-hollywood-future/

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