The COVID pandemic continues to have an impact on the film industry. The latest piece of news that has broken was as reports that MGM explored the possibility of selling No Time to Die to either Apple TV+ or Netflix. This was shocking news because a major studio would consider selling one of their biggest tentpoles to a streaming service.
It was reported by Bloomberg that MGM offered to No Time to Die for $600 million for a one-year licensing deal. The streaming services refused to pay. On the surface, $600 million seems like a low figure for a Bond film, because Skyfall made $1.1 billion at the box-office and Spectre made $880 million. The reports were even more bizarre because the buzz around No Time to Die has been positive and the film has the added draw of being Daniel Craig’s last Bond film. However, MGM would get to keep most of the money from a sale instead of sharing the money with cinemas.
This news reveals a few things about the state of MGM and streaming services. MGM must be in serious financial trouble to even consider selling a Bond film. They had lost between $30 million to $50 million from the delays. This is on top of the production costs of $250 million and additional marketing costs. A $600 million sale would make MGM break even. Since the reports, MGM has now said No Time to Die is not for sale.
The news shows there is a three-way problem. The first is the massive backlog of films set to hit cinemas in 2021. Second is the failures of the Premium VOD model. The third is the limits of the seemingly free-spending streaming services.
Pretty much all tentpole films have been delayed to 2021 and 2022, making the release schedule cluttered. When cinemas reopen fully it will be carnage because so many films will be competing. The worsening economic circumstances have been an extra factor that could affect businesses and audiences. Some tentpoles will flop due to these issues.
The Premium VOD model has proven to not be a viable option for the film industry. Trolls World Tour continues to be a fluke because many other films released this way have failed to make a profit. Disney released Mulan on Disney+ as a premium purchase and financially it was a disaster for Disney. This is why other major tentpoles haven’t been released this way. Plus with COVID affecting the economic and unemployment rising people are going to be even more selective about what they rent.
Netflix, Amazon, and Apple TV+ have been willing to splash the cash but even they think $600 million is too much for one film. This shows the limits of how far production costs can be for films made straight-to-streaming, especially action films and special effects-heavy films. Many tentpoles cost between $150 million to $250 million and it will get expensive for streaming services bidding against each other for films where studios would want to at least recover their costs.
The draw of these types of films for streaming services would be to draw in more subscribers. However, The Los Angeles Times has reported that Netflix’s subscriber growth has slowed in the third quarter. This is due to the increased competition and again, the wider economic crisis. This could be a sign that we might be reaching the peak of streaming services. I have already written an article about the potential consequences of the streaming wars and Jean Henegan and I discussed the issues in a podcast.
There has been a vocal minority calling some major films like No Time to Die (and other blockbusters) to be released on streaming services and bypass cinemas. However, this is a ‘careful what you wish for’ situation because if streaming services cannot grow as fast as they use to then they would need to raise prices to make No Time to Die (and other blockbusters) profitable. If that happens then it could lead to a chain reaction where some people cancel their subscribers and became more selective about which streaming services they subscribe to.
If No Time to Die did go straight-to-streaming then it would have big consequences for the Bond series. The Bond series is one of the longest-running and more profitable film franchises in history. For No Time to Die to go straight-to-streaming it could diminish the brand. There is prestige for a film to be released in cinemas and there could be no going back if one film in a franchise goes straight-to-streaming because audiences could expect it again and again.
The Bond series has weathered massive storms before and survived many predicted deaths. Bond came back from a six-year break that saw a change in action and the end of the Cold War with one of the best films, Goldeneye. Die Another Day was a critical disaster, and the series was able to bounce with Casino Royale. And MGM went bankrupt in 2010 and two years later Skyfall was released.
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