Here’s a Hollywood Twist: Streaming Success Runs Through Theaters

Media|Here’s a Hollywood Twist: Streaming Success Runs Through Theaters

Amazon Studios spent $250 million to make “Red One,” a comedic holiday action film starring Dwayne Johnson and Chris Evans. Then the company pushed the film into more than 4,000 theaters, spending tens of millions more to market it.

So when the movie racked up only about $80 million in domestic box office receipts in recent weeks — half of which goes to the theater operators — it looked like a huge investment gone horribly bad.

Not so fast, Amazon says. “We did this for a very specific reason,” Courtenay Valenti, the company’s head of film, said.

And that reason: to make it a streaming hit.

For much of the past decade, Hollywood executives striving to catch Netflix started believing that the only way to increase the subscriber numbers for their own streaming services was either by significantly narrowing the time between a film’s theatrical release and its appearance on streaming or by putting both out simultaneously. Disney did it with “Black Widow,” much to the dismay of Scarlett Johansson. Warner Bros. did it with “Dune.” This was the future.

On top of that, the thinking went, streaming would give movie studios a chance to spend far less on the expensive marketing required for a theatrical release. The algorithm would do all the work instead.

But the industry has now largely come to a very different conclusion: The key to making a movie a streaming success and attracting new subscribers is to first release it in theaters. It turns out that all the things that make theatrical movies successful — expansive marketing and public relations campaigns, and valuable word of mouth — continue to help movies perform once they land in the home.