All that glitters is not gold and that soon can be the case of Hollywood which is currently basking in the glory as Barbenheimer enters the $100 million club. As per box office reports, Barbie scored $93 million while Oppenheimer pocketed $46 million in the second weekend. But the scenario may not last long thanks to the ongoing strike in Hollywood. “The entertainment industry is significantly shifting with the strike of gig workers, and its effects may be felt on a global scale. As we are aware, Hollywood movies substantially contribute to the box office in India; for instance, Oppenheimer is the most preferred Hollywood movie with average COTT ratings of 8.2/10 as per COTT sample of 82714 respondents (NCCS 15+ ABC, Urban, All India), drawing audiences from diverse regions and demographics,” Pankaj Krishna, founder and CEO, Chrome Data Analytics and Media, told BrandWagon Online.
Screen Actors Guild- American Federation of Television and Radio Actors (SAG-AFTRA) along with the Writers Guild of America (WGA) have been on a joint strike from July 14th against the Alliance of Motion Picture and Television Producers (AMPTP).
The Global Stage
In 2022, total earnings at the box office across the United States and Canada amounted to around $7.37 billion up from $4.48 billion in the previous year, reveals data from market research Statista. Still, the 2022 figure corresponded to less than 40% of the revenue recorded in 2019. The initial recovery in the box office was followed by a return in market concentration. As of February 2023, the big five major film studios – Disney, Paramount, Sony/Columbia, Universal Pictures, and Warner Bros. – collectively held a market share of over 80% in the U.S. and Canada. Meanwhile, the action genre gained popularity over the adventure for the first time since 2018. Industry experts opine that the ongoing strike if it lasts longer then there will be a two-fold impact. Firstly, of course, at a box office level, revenue would suffer, secondly, the gig economy would suffer whose livelihood is dependent on daily wages. “There would be an impact on theatrical releases should the strike last for six to eight months as the pipeline would be depleted by then. Personally, I feel that the strike would not last long as it would not be sustainable for the people working in Hollywood,” Uday Sodhi, senior partner and co-founder, Kurate Digital Consulting, explained.
In 2022, a total of 449 movies were released in the United States and Canada, up from 406 in the previous year, as per Statista. Still, the 2022 figures amount to about 56.7% of the 792 titles released in 2019, before the COVID-19 outbreak. As of March 2023, AMC Theatres was the leading cinema circuit in the United States and Canada, with 77,100 screens spread across both countries. Regal and Cinemark followed with around 64,700 and 43,900 movie theater screens, respectively. The report further states that are ways to attract Gen-Zs to theatres. During a mid-2022 survey conducted among members of the Gen-Z aged between 13 and 24 years – more than half of respondents mentioned movie offering as a leading motivation to go to the movies. About 40% of interviewees included the quality of the service and the physical comfort of the seats at the movie theater among their main incentives.
Chroma Data Analytics and Media estimates that impact on Hollywood Studios could be around more than the $3.5 billion mark, including revenues realised from international markets mainly due to delays in film releases, shift in dates for film production and post-production, low theatre audience turnout, reduced Box Office Earnings and increased OTT consumption, economic loss across film production, marketing, and distribution, contractual disputes between actors, directors, and writers. This could further complicate the production process and add to industry uncertainty. Furthermore, the impact on the exhibition business may lead to limited content options, a decline in footfall, audience revenue loss, and operational costs. “It is vital to highlight that the strike’s duration and resolve will determine the amount of the impact. If the strike is resolved swiftly and filmmakers are able to restart production, the impact may be limited. On the other hand, a lengthy strike might have far-reaching and long-term consequences for both Hollywood studios and the exhibition industry,” Krishna explained.
The India Impact
In India, the film industry segment grew 85% to reach 90% of its 2019 levels as theaters re-opened, per FICCI EY report. Over 1,600 films were released in 2022, theatrical revenues crossed Rs 10,000 crore, and fewer films were released directly on digital platforms. 335 Indian films were released overseas. As per the estimates of Chroma Data Analytics and Media to gauge consumption behaviour and predict the trend, current developments in the global media and entertainment industry has been factored in to assess the potential implications on the Indian film market. As per Krishna, in the future, the box office and the content library of several global OTT platforms such as Disney+Hotstar, Netflix or Amazon Prime video may get affected by the strike, which can lead to a potential loss of more than Rs 100 crore. However, homegrown content may pick up the pace due to the non-availability of Hollywood releases.
Hollywood movie account for a 12% language share while Hindi is at 37% with regional languages like Telugu (20%), Tamil (17%), Malayalam (5%), Punjabi (3%) among others following closely, as per a report by Ormax Media. It all started with Shah Rukh Khan starrer Pathaan released in January generated Rs 543.3 crore at the domestic box office, followed by films such as Adipurush, Ponniyin Selvan: Part Two, among others. “The scarcity of English films would rarely have an impact. India has its own slate of Hindi films as well as South Indian films so the impact wouldn’t be as strong as it would be in Hollywood. While a few movies are expected to perform well, but no one can be accurate,” Taran Adarsh, film critic and trade analyst highlighted.
Interestingly, it is believed that if this strike goes on even streaming platforms will have to pay its share of price. According to Chrome Industry Reports, the OTT industry in India currently stands at Rs 10,700 crore, including advertising and subscription revenues. The impact on streaming platforms such as Disney+Hotstar, Amazon Prime and Netflix may be less severe than on traditional Hollywood studios or the exhibition industry. Currently, more than 50% of the content library of Disney+Hotstar and Netflix comprises Hollywood content owing to the fact that streaming platforms use a different revenue model and have an extensive existing library.
Krishna explains that in terms of content syndication partnerships, the current dubbed content market will be affected by 10-15%. “However, it may be recovered by dubbing regional content in different languages,” he pointed out.
What lies Ahead
In the recent set of development from what it seems both unions failed to reach an agreement on a revised share of profits as well as protection from artificial intelligence (AI) rights. The SAG-AFTRA raised concerns about the emergence of OTT platforms and contracts not keeping up with inflation as well as residual payments in the OTT space. The last joint walkout happened in the ’60s. Well-known actors including the likes of Cillian Murphy, Emily Blunt, and Robert Downey Jr among others walked out of Oppenheimer’s London screening in solidarity with the strike called by Hollywood Actor’s union.
Furthermore, releases have been pushed back as a result of the strike. Gran Turismo was scheduled to release on August 11. However, the release date has been pushed back to August 25. Kraven- the Hunter, based on a Marvel comic character, previously scheduled to release in October has been moved to August 30, 2024 while Walt Disney Company’s Poor Things has been postponed back until December. While it is believed that the strike would last for long, the SAG-AFTRA has made ‘interim agreements’ with independent productions to continue filming for 70 projects. The union sent a letter explaining how the move is strategic. According to the letter, the SAG-AFTRA is strike in directed towards the AMPTP productions.