Everything old is new: Apple invests in theatrical releases

25 March, 2023

It was recently reported that Apple plans to spend $1B per year on films will get an exclusive theatrical release. Amazon too has said it will release at least 12 movies a year in theaters, with a comparably sized investment. It may sound counterintuitive that these two tech giants with their own streaming platforms are investing in theatrical releases but they likely have several reasons beyond whatever box office revenue this strategy might bring in.


In addition to attracting A-list talent, who might prefer that their work gets a chance in theaters, Apple is no doubt hoping that giving its movies a theatrical release will reach more audiences who might be convinced to sign up for Apple TV+. So far this year, the most in-demand movie on Apple TV+ is Emancipation, which had 15.75 times the average series demand. While this number is a solid performance (only about 3% of movies reach 8x demand) it still is well behind the exceptional level of demand that the top new movies of the year so far have reached. It remains to be seen how much Apple can improve on the demand for its movies by releasing them in theaters first.


We can see in the cases of Sharper and The Tragedy of Macbeth how these two films hit their peak demand only after becoming available on Apple TV+. Their initial limited theatrical releases did little to attract audience attention and it was only after becoming available on Apple TV+ that they reached their potential. What this doesn’t answer is whether these movies’ limited theatrical release ultimately laid the foundation for them to go on and be successful on Apple TV+. The scale of Apple’s planned investment in theatrically releasing its movies certainly suggests that the company thinks it has something to gain by it.  

CODA may be a more instructive example of the value of “being part of the conversation”.  In the chart we can see that initial demand for the movie following its release in theaters and on Apple TV+ was muted and lagged the performance of these other Apple movies. However, the movie ultimately reached its highest levels of demand in the lead up to and following its Best Picture win at the Oscars. Apple may be calculating that if it can drive conversations by being in theaters (even if not winning Oscars) that will ultimately benefit its streaming service.

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