Village Roadshow is suing WarnerMedia over the decision to release The Matrix Resurrections on the streaming service HBO Max in the US on the same day as it was released into cinemas.
The film, which saw a $148 million US box office take, wasn't what Village Roadshow would have hoped for. The company asserts:
“WB’s strategy not only ensured that ‘The Matrix Resurrections’ would be a bust at the box office, but it also inflicted serious harm to the entire ‘Matrix’ franchise,” the suit alleges. “There can be no doubt that the abysmal theatrical box office sales figures from ‘The Matrix Resurrections’ dilute the value of this tent pole franchise as a film’s lack of profitability generally prevents studios from investing in additional sequels and derivative films in the near term.”
It seems a bit generous to suggest that the tepidly received Matrix sequel (which follows two other sequels that haven't aged well in the sphere of public opinion) could have resurrected the franchise. But Village Roadshow has a point in noting that wholly-owned Warner films like The Batman and Black Adam were pushed back into 2022 where they would have exclusive theatrical runs prior to a streaming launch.
WarnerMedia has hit back with the public statement:
“This is a frivolous attempt by Village Roadshow to avoid their contractual commitment to participate in the arbitration that we commenced against them last week,” the studio said. “We have no doubt that this case will be resolved in our favor.”
What's spurred this legal action is that Village Roadshow says it cannot make a contractually obligated payment to Warner Bros. (due to the poor box office), which puts the company at risk of losing its rights to the film.
Curiously, Village Roadshow also allege that WarnerMedia has opted to move ahead with an Edge of Tomorrow TV series rather than a movie, cutting Village Roadshow out of a sequel film.
Should Netflix introduce ads?
Don't hold onto any previously held beliefs about what Netflix may or may not do in the coming months/years. If you're holding onto pre-assumed ideas like that Netflix will never do sports or have advertising on-platform, don't be too sure that will hold.
The service is reaching a ceiling. At least in terms of North American growth - there's still plenty of room elsewhere for the moment. Subscriber growth is slowing down and Netflix is reaching the point where it more or less has the most subscribers it is every likely to have. But as a publicly-listed company, there will be demand for more growth.
Needham senior analyst Laura Martin has been calling for Netflix to introduce an advertising supported pricing tier to Netflix, bringing the price of its service down a few bucks each month for price-sensitive customers. As competition heats up with other streaming services who also have lower-prices thanks to ad-supported pricing tiers, Martin predicts that there will be much greater churn of subscribers. She also cites concern of Netflix's future being with markets that have a lower ARPU (average revenue per user).
Her comments from last year still hold true now:
“Nothing is getting better for Netflix, and it’s not a part of the reopening trade as it is not ad-driven. And advertising is going to be huge over the next twelve months. So, we’d rather be with the ad-driven tech stocks.”
Netflix stock is down about 32% overall this year. And while yes, all tech stocks have taken a hit on Wall Street in recent months, it is difficult to argue with Martin's position.
From her most recent report in January:
“Since NFLX’s balance sheet cannot withstand lower revenue, we recommend a 5-6 minute/hour ad load to supplement a $5-$7/month consumer fee as a second pricing tier option for consumers. Nearly all of its streaming competitors have now introduced this 2-tier pricing strategy. We believe this pricing would generate higher revenue for ‘ad-light’ subs compared with NFLX’s current no-ads tier. Without a lower cost tier, we believe churn will rise in NFLX’s highest ARPU markets owing to the ‘digital attention recession’ as the economy continues to reopen over the next 12 months.”
Stan signs MGM output deal
Aussie streamer Stan has again extended its output deal with MGM. The deal gets them the newest James Bond film No Time To Die, which will join their Bond collection. The deal will deliver highly sought-after (by me) shows like Billy the Kid, The Box, and The Reunion.
The deal will also bring to Stan (from 2023) the best film of the year so far Licorice Pizza, along with the worst film of the year House of Gucci.
- Chinese streamer Tencent has restored the original ending to Fight Club. Read: THR
- A second season of rebooted animated show The Smurfs has been announced, along with the first of what is expected to be multiple movies. Pam Brady (South Park, Team America) is writing. Read: Deadline
- The Edinburgh TV Festival will return to being an in-person TV event (at least, that's the plan as of Feb 2022...) Read: Deadline
- Expect to see the first trailer for the Lord of The Rings TV show this coming weekend during the Super Bowl. Read: Variety
- Will Smith will travel from the South Pole to the North Pole in Disney+ docu-series Pole To Pole. Read: Variety
- Tony Danza will play a cop when he guest stars on Blue Bloods. One assumes that the cop will be named Tony, but would it be too much to ask for this to be the Hudson Street / Blue Bloods crossover I have long dreamed of? Read: TV Line
The Dropout debuts March 3 on Hulu. It stars Amanda Seyfried as Elizabeth Holmes.
The Kardashians are coming to Hulu April 14.
Cheaper By The Dozen debuts on Disney+ March 18, starring Zach Braff and Gabrielle Union.
Vikings spin-off series Vikings: Valhalla debuts Feb 25 on Netflix.
The Marvelous Mrs Maisel returns Feb 18 to Amazon Prime Video. Quietly, I've seen the first few episodes back and boy was it great to be reunited with old friends.
Love Is Colorblind debuts on Netflix March 1.
Thirty-Nine debuts on Netflix Feb 16.
That's the newsletter today. More tomorrow.