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From the available figures, Solo didn’t break even at the box office, but almost certainly has gone into profit since the home video release. Solo didn’t ‘make’ ~$400m for Disney at the box office, it grossed almost that much. The cinemas get a significant portion of that. So the gross, minus the cinema’s share, minus the promotional and production costs is what the studio ultimately “makes”.

I love all the Star Wars movies, Disney has done a great job with the recent ones.

More on topic, I don’t see any reason for Iger not to be on the Apple board yet.


Lots of movies don't make money officially. Did you know 'The Lord of the Rings' officially lost money? How about 'Harry Potter and the Order of the Phoenix'? 'Return of the Jedi'? There are lots of sites that list high attendance or Oscar winning movies that somehow still lost money.

Source.
 
From the available figures, Solo didn’t break even at the box office, but almost certainly has gone into profit since the home video release. Solo didn’t ‘make’ ~$400m for Disney at the box office, it grossed almost that much. The cinemas get a significant portion of that. So the gross, minus the cinema’s share, minus the promotional and production costs is what the studio ultimately “makes”.

The cinemas don't get a significant portion of that money. The studios do. That's why you pay $10 for $.30 worth of popcorn.

Source
 
From the available figures, Solo didn’t break even at the box office, but almost certainly has gone into profit since the home video release. Solo didn’t ‘make’ ~$400m for Disney at the box office, it grossed almost that much. The cinemas get a significant portion of that. So the gross, minus the cinema’s share, minus the promotional and production costs is what the studio ultimately “makes”.

I love all the Star Wars movies, Disney has done a great job with the recent ones.

More on topic, I don’t see any reason for Iger not to be on the Apple board yet.
I do realize that, although cinemas make next to nothing...especially with Disney movies. They make more on the popcorn and Junior Mints. I’m just saying...the $400M in gross receipts isn’t really a travesty. We don’t know how all their costs roll up in their P&L, but you can be sure some of that cost was spread around.

Solo wasn’t a hit, but it didn’t hurt the studios overall operating profit, which has been strong every quarter.
 
Because, despite one of my earlier posts, streaming content is a business. I don't care if they make money, but stockholders do. A company that doesn't make money and doesn't have a path towards profitability will get out of providing the service. Apple may have more money but that doesn't mean they want to keep pouring it down the drain if the service isn't successful.

Let me clarify, as a consumer you don't have to make this big decision on which services to subscribe. You can easily switch between services.
 
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The cinemas don't get a significant portion of that money. The studios do. That's why you pay $10 for $.30 worth of popcorn.

I know a theater owner, not a chain theater manager but someone who owns several multiplexes and a larger number of 2 or 3 plex theaters in small towns and he says the candy store analogy is kind of bunk. He could rent a cheaper space to sell candy and popcorn and not have the overhead of the theater to pay for as well. The movie ticket price must generate enough income to pay for the movie rental payments owed to the studio. If they don't regularly do this then no matter how many concessions are sold the theater loses money. You have staff, equipment, heating and cooling, electric bills, internet, servers (many movies are streamed to the theater hard drives now) advertising and I'm probably leaving a lot out. A movie with legs can make a theater a lot of money, because rental costs do go down like the link posted says after some weeks. If the attendance is high enough then he makes money on both the ticket and concessions. A flop can cost them a lot, more money than concessions can cover. Way too many associated costs for popcorn, candy and drinks to make up the difference. Plus as every new fad comes and goes he needs to change his theaters. ATMOS sound, LED projections equipment, recliner seating, online tickets with seat assignments are all costs that he has to absorb or lose business to the chain theaters.

And yes, he knows you are sneaking food into the theater. He's pointed people out as they 'get away' with bringing outside food in.
 
The cinemas don't get a significant portion of that money. The studios do. That's why you pay $10 for $.30 worth of popcorn.

Source

A couple of points — international income is more like 50/50, and in many territories more lopsided in favor of the distributors and theater owners ... China is something like 70% with the studios taking only 30%. More and more income is coming from international markets and blockbuster movies are being made to cater to those audiences.

As for US income, you’re correct, the studios can take more than 90% on some films, but that’s only in the first 30 days, after that, the longer a successful film runs, the greater the share of box office the theater gets. By then end of a long successful run, some theater owners can get close to 100% of the revenue. the theater can also pull a film early if it fails to make a certain amount of income.
 
I think I will drop the streaming part of Netflix and go with Disney+ for my instant fix. I'll keep my 2 Blu-Ray rental accounts at Netflix for the bulk of my serious viewing.
 
Except we know this doesn't happen, which is why the studios are no longer allowed to own movie theaters.

Except that is only true when there was a limited, physical distribution network. Establishing a streaming service is fairly easy, hence the number of niche services targeted at smaller audiences.

All that ends up happening is that smaller content producers have no avenue to distribute their content, and are forced into unsustainable deals with major studios for releases.

Since there is no need for physical locations from which to distribute media, it is quite easy for small, niche players to serve those content producers. In addition, Vimeo (and to a lesser extent iTunes/Amazon) allows direct to consumer delivery for anyone.

On the other hand, do you think that a players as large as Netflix, Hulu, or Amazon have any incentive to provide sustainable deals to small content creators. Niche players have that incentive because they need the content.

Consumers are forced to subscribe to multiple different services - which increases the overall cost to the consumer.

Consumers are not forced to do anything other than pay for the content they wish to watch. They can do it directly (renting or purchasing on iTunes, etc.) or via subscription services. Anyone who thought that paying $7.99 - $15.99 to Netflix would sustain the content creation pipeline that previously existed based on expensive cable subscriptions and home video purchases just was not paying attention.
 
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The cinemas don't get a significant portion of that money. The studios do. That's why you pay $10 for $.30 worth of popcorn.

Source

Your source backs up my point. The cinema get a significant portion of the gross. I didn't say a majority or a minority, and I know it changes over time and I know they sell popcorn. :rolleyes:

The point is the studio doesn't get 100% of the gross. It gets less than that.
 
Not gonna lie... AppleTV+ still sounds lame, but Disney+ sounds awesome.

I dislike Disney. Some of their movies are good but their shows are garbage.

They set false expectation for kids, their story lines and dialog are weak, and they have destroyed the Star Wars brand (not that Lucas did anything good with his last three movies)
 
Disney will hurt Netflix because of their superior content. I think Disney is the content king. No one owns a larger and better content library.

Actually, I think that Warner Brothers has a deeper and better library, including the portions of MGM's and United Artists's libraries they own, and all the TV. The addition of Fox to Disney helps, but I last time I checked Warner had more and more interesting stuff overall.
 
It wasn’t just Schmidt sitting at Apple’s board, on the other side there was Levinson who had to give up his seat at Google’s only a few months after Schmidt had left Apple. Presumably because the FTC was looking into the ties between the two companies.

Today Levinson still serves Apple as chairman of the board but is also the CEO of a Google/Alphabet owned biotech company. Apple and Google still are closer than people think.

Interesting point indeed. MR had a few lines on this, too (with more links inside):

https://www.macrumors.com/2009/10/12/arthur-levinson-resigns-from-googles-board-of-directors/

After all Apple always blamed Samsung instead of Google...

Interestingly that Iger position has a similar ambivalence where one would really know more about they would resolve conflicting interests. If they did, then the FTC wouldn’t like it anyway. Nice setup for a drama if the solution wasn’t that pragmatic.
 
Not sure how you can glean that from quotes in an article, but it certainly doesn't show where it counts-- Disney's revenues, profits, and stock price, all of which have been flat for nearly 5 years.

You are shortsightedly mistaking temporary profits for long term viability. Disney's acquisitions have made it massive and viable in the long term. Tim apple on the other hand has run through Jobs plan and simply has exponentially increased prices to beyond sustainability for a short term bump, and now has nowhere to go but down.
 
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Based on Disneys pricing of $6.99 for a large amount of content, I am going to go out on a limb and say Apple would probably have to pay me to subscribe to their service. Maybe Apple can buy/merge with Disney, that would be fun.

Disney has placed all competition in a very awkward situation, competing on the amount of well known content and low price. Sure the competition may resist and hesitate for a while, however it will only be a few reported quarterly losses before pressure sets in to be competitive on price.
 
Iger has a tough job monitoring both sides.

As CEO at Apple, he's in a perfect position, however he's gotta feel a bit guilty knowing the company he is working for is going "against" the tide.
 
The way this needs to go is bundled subscription services, not everyone including Disney vying for 9.99 a month to increase profits, Cable/media provider service have become insanely expensive because everyone wants to increase their share. What happened to responsibility over profiteering? This may be a case where lower pricing or bundling can increase sales/profits.

Yeah, I get the feeling everyone with a collection of content wants to milk as many users as possible for 9.99/mo and a few big boys want to be the king of the one provider you pay 24.99/mo for.

We got to a point where suddenly we were paying 100/mo for cable+internet... now you’ll pay 50/mo for internet then 24.99 to your “main” provider and 9.99 to 5 or 6 providers of your favorite shows (e.g. Star Trek Discovery on CBS)... bringing you to say around 120/mo... meet the new boss, same as the old boss
 
Thanks for the long, thoughtful response... It's a breath of fresh air.

There's a lot to reply to in here, so I'm doing my best to organize.

Assume that the following were true. Streaming services were prohibited from producing content and/or owning it. Also, assume that content owners were prohibited from signing exclusive deals with a streaming service.

What would be the basis on which the streaming services would compete:
  1. Price
  2. UI (discovery, control, family profiles, suggestions)
  3. Quality
Price would either be based on scale (a larger player could negotiate better deals with content providers), margin or cutting quality (delivering at lower bit rates or resolution, etc.).
Ok, I mostly agree. Simplifying the assumptions certainly helps. For this section at least, I'd make one more simplifying assumption which is that the streaming service doesn't own the network and is barred from exclusive deals. So we're looking at: content creator, streaming service, network provider, playback hardware.

Services would compete on price, I'd say UX (user experience), quality of service (video quality and related factors), and reliability/support.

You'd perhaps expect a few service tiers and at each tier you'd expect price to be a function of a few factors but in a commodity market like this you'd primarily expect it to be a function of costs. Some (economic) rents could be extracted for innovations in UX and the impact on price would depend on whether companies used that advantage for profit or growth, but in general price would approach cost.

Costs would mostly be driven by the underlying content, network and equipment costs and advancements in technology.

Given equal availability of network access and capital equipment, I think, in the end, the price structure for the streaming service is driven by scale (as you said) and technology (both to utilize network and capital more efficiently and to differentiate around UX).

I went through the trouble because I think technology is a key factor.

The reality is that reality is that streaming services are just middlemen and for the most part, do not offer much inherent value. Having the large content producers directly deliver to the consumer, has the potential to lower the overall price, if they are able to reach the needed scale (something that all 5 big major studios should be able to do).

Actually a better way of looking at this is that the content producers are eliminating the middle level of distribution, which should eliminate waste and cut costs overall to the end user.
Maybe, but I'm not sure I'm willing to just take that as a given...

For one thing, there are differences in the existing streaming services. I personally prefer the Netflix app over Amazon or HBO. If I have a preference, then Netflix must be adding value somehow.

For another, there's the question of core competence and the right level of vertical integration. Why are content and streaming the right combination and not include network infrastructure or building cameras and lenses? If the efficiency argument you're making were universally true, then Amazon would have their own fleet of delivery trucks or McDonalds would have a ranching division and we'd go to MGM movie theaters.

If technology and scale drive the pricing structure, is limiting scale to one content provider and making technology development a division of a massive entertainment business really the best combination?

I suspect we would be more likely to see improvements in delivery and UX if the streaming service were forced to compete on those factors alone rather that being what a user puts up with to see Star Wars in 4K 3D (now with 30% more Tauntauns!). Once the streaming service is put inside the content business it becomes an internal monopoly with all the downfalls that carries with it.

Most often, there's a level of integration that makes sense. AOL/Time Warner stands out a warning beacon-- there's a lot of factors that led to that disaster, for sure, but underlying all of them was the question of how much sense it made to put those functions into one company.

Movie studios decided to dis-integrate themselves from acting talent at some point because that level of integration was inflexible. They don't own the theaters. Very often they don't own the distribution.

Part of the reason the studios don't own theaters in the US is that the big studio system was broken up in an Anti-Trust action-- which also suggests that this level of integration is (or at least was) harmful to consumers.
It is simply because $10 a month cannot pay for all the content being generated. People used to pay $50-$150 for a cable subscription. Eliminating the cable company only eliminates some of that cost, but people were spoiled (and misled) for the short time that Netflix had an unsustainable deal with many of the studios. While they were a small player, studios were just looking at them as incremental revenue. Once they began destroying the studios' larger revenue streams (home video, VoD, MSOs, etc.) something had to change.

I am still not sure how anyone thought that it would be possible to go from a cable subscription for $50-$150 to a Netflix subscription for $10 and expect to receive the same volume of content as before.

Expect to eventually pay about the same as a cable subscription for the same about of content as one would receive from a cable subscription, but being able to watch it all on demand, and be able to rotate through them, keeping only the services you need each month, based on which shows one wants to watch at that moment.
This is a key point-- it's possible we've had our expectations set by an unsustainable system. We've seen this before with Napster, which set the unreasonable expectation that music was free. Likewise, I've no idea how all those publications will survive under News+.

That said, I'm also not sure exactly how unreasonable it is. Netflix is now $16 a month for 4k content. Disney+ is $7 for 4k content.

So, if you have a choice between "one fee for the world" or $7 for Disney and $9 to spread around to other services, you come out even if you would normally spend about half your time watching Disney content.

This doesn't imply that we're underpaying for content in the Netflix model though. Remember that a person can only watch 24 hours of content in a day. If people choose to only subscribe to Disney and spend their usual amount of time watching, then they've reduced what they're paying for content even though they're consuming just as much.

What it does imply is that Disney is trying to leverage their catalog to "extort" viewers into watching more of their content and therefore paying more for it. If you used to spend a quarter of your time watching Disney, then the Netflix model would eventually settle out to about $4 going to Disney. Now they're saying if you want to watch any Disney content you have to pony up $7-- encouraging you to consume more of it at the expense of other things you may have otherwise chosen if you want to keep to the same budget.

I don't think the cable model is the best reference point either. In the cable model, content was separate but "streaming" and the network were integrated. In the Disney+ model, content and streaming are integrated. In all cases we need to pay for content, streaming, network and playback hardware.

The cable model included content, streaming and the network. The Disney model only includes content and streaming, the user must also pay for the network. In a lot of cases, Internet fees approach those of the cable fees you mention.

There are other nuances between the two-- the network we pay for today does more than the single purpose cable of yesteryear and removing the network portion gives us more flexibility in moving our viewing across screens if you're willing to pay for more networks (fiber to the home, cellular to the phone etc).

In the old cable model, the cable provider was also a local monopoly, so there were monopoly rents being charged as well.

And, finally, there was the experience the music industry had when everything went digital: people pay for content because they choose to. For a while, there were serious discussions about whether digital meant the end of music sales-- until iTunes came along and made it work. iTunes worked because it was simple to use and reasonably priced.

The lesson being that if you over charge, or make the system too unfriendly to the customer, more of your customers may work around your delivery system. This sets a ceiling on the pricing.
Both assumptions are false. Netflix needed to start producing its own content because it knew that its role as a middleman did not generate enough value, and that, eventually, the content producers would understand this and not renew their deals.

Disney realized that Netflix was not paying anywhere near enough for the value it was receiving and decided that they had enough content to make their own streaming service.

On the other hand, Netflix is not in Apple's TV app because it does not want to be disintermediated. They wanted consumers to have to go to their app, and not let Apple deliver the content without the customer knowing who was delivering it, and not proving the demographic data they wanted/needed. Netfilx choose not to be part of the TV app before Apple started spending money on content.
I suspect you're at least partly right about Netflix's decision to create content. I think it was also a negotiating tactic to make it clear that they own the connection to the customer, and can replace the content owners if they choose to-- putting Netflix in the power position and giving content owners the choice between lower licenses or no license.

But that's also what set up the race-- Disney wants to prove they can access the customer before Netflix proves they can obviate the need to work with Disney.

And I think you're right about Netflix's decision to not join on to the TV app. If their leverage with Disney is that they own the connection to the customer, then Apple is threatening that. You're probably right about the access to customer data as well. I haven't looked at it, but I suspect Apple upholds their privacy standards and limits what Neflix can learn about Apple customers...
[doublepost=1555247547][/doublepost]
So you’re against too much vertical integration.
I guess I'm against too much of anything. Likewise too little. I'm very much in favor of just the right amount... ;)

Sometimes we benefit from that integration, sometimes we lose. I'm trying to sort out which way this is going...
[doublepost=1555249883][/doublepost]
People wanted a la carte and that is what we are getting. Hopefully, all the major companies get together eventually to create a bundle for those of us that still like them.
Are we though? This feels like bundling again... If you want Pixar, you also get the Simpsons and since you're getting both you're being charged for both.

News+ sounded more a la carte. A monthly fee for everything, read what you want, the content providers are paid a fraction of your fee based on what you actually read.

In the streaming world, that would suggest an a la carte service would charge a fee, give you everything, and if you watched Cars, Disney would get a piece of your fee that month.

That sounds like the most consumer friendly option. Not sure it's workable, and clearly the content providers want to leverage their catalogs, but I'd be happiest and would pay some premium for that type of service.
 
Don’t be content. Don't be consumer lazy. Be vibrant and unpredictable. This will give us all better services.

This is my 2019.

January. Netflix (SVOD) (Netflix Inc, USA)
February. Netflix (SVOD) (Netflix Inc, USA)
March. iTunes (TVOD) (Apple Inc, USA)
April. HBO (SVOD) (AT&T, USA)
May. HBO (SVOD) (AT&T, USA)
June. Netflix (SVOD) (Netflix Inc, USA)
July. Netflix (SVOD) (Netflix Inc, USA)
August. Prime Video (SVOD) (Amazon Inc, USA)
September. Apple TV+ (SVOD) (Apple Inc, USA)
October. Apple TV+ (SVOD) (Apple Inc, USA)
November. Disney+ (SVOD) (The Walt Disney Co, USA)
December. «a Warner Brothers service» (AT&T, USA)

Who knows how my 2020 will look like..
 
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Are we though? This feels like bundling again... If you want Pixar, you also get the Simpsons and since you're getting both you're being charged for both.

It’s definitely bundling. But that’s true for any added value content. I’m paying for free shipping with Amazon Prime, but they give me video and Whole Foods discounts. If I don’t want, need, or use those services, then why don’t I get to pay less for my free shipping? I keep getting notices that I’m not using a member benefit: Prime Music. But I’m not remotely interested, so give me a discount on my Prime account.

I don’t see that kind of thing changing. If someone can offer 2 for 1, they probably always will, rather than charging less for the one. That’s business.

That said, when it comes to entertainment, bundling isn’t always a bad thing. I’ve seen some programs I probably would have never seen if not for bundling. Are there better ways to achieve this? Probably. But it’s really hard to imagine everyone coming together during our lifetimes and agreeing to allow customers to watch whatever they want for a reasonable price. These companies have real expenses when it comes to producing entertainment. It’s no secret that some content pays for other content in a studio. One big pop hit will allow a studio to produce several art films and documentaries. But studios aren’t going to willingly let customers pay less to watch other people’s content.

A la carte already exists — you can go to iTunes and rent any movie or TV show you want to watch now. But it’s not cheap to do it that way. Netflix is a much better value currently, even if you’re at the mercy of whatever deals they make for third party content, as it has been for years with cable and satellite. Presumably people should be watching Netflix for the original content, but many of them watch for the catalogue of third party content. And I do think many people don’t want to have to decide what to watch, or have an agenda of programs to watch, but rather turn on a service and watch whatever’s on. A la carte makes that kind of convenience difficult, as every decision is whether to spend or not to spend, and that choice further carries the fear of regret over watching something new, thus stemming the flow of new and unique programming.

So there’s pros and cons for each. At least with these direct to consumer models, all the money is going to the entertainment and not to the delivery system. Turning a service off and on is a mere click of a button, rather than painful interaction with customer service, waiting for the cable guy, and lengthy onerous contract commitments.
 
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It’s definitely bundling. But that’s true for any added value content. I’m paying for free shipping with Amazon Prime, but they give me video and Whole Foods discounts. If I don’t want, need, or use those services, then why don’t I get to pay less for my free shipping? I keep getting notices that I’m not using a member benefit: Prime Music. But I’m not remotely interested, so give me a discount on my Prime account.

I don’t see that kind of thing changing. If someone can offer 2 for 1, they probably always will, rather than charging less for the one. That’s business.

That said, when it comes to entertainment, bundling isn’t always a bad thing. I’ve seen some programs I probably would have never seen if not for bundling. Are there better ways to achieve this? Probably. But it’s really hard to imagine everyone coming together during our lifetimes and agreeing to allow customers to watch whatever they want for a reasonable price. These companies have real expenses when it comes to producing entertainment. It’s no secret that some content pays for other content in a studio. One big pop hit will allow a studio to produce several art films and documentaries. But studios aren’t going to willingly let customers pay less to watch other people’s content.

A la carte already exists — you can go to iTunes and rent any movie or TV show you want to watch now. But it’s not cheap to do it that way. Netflix is a much better value currently, even if you’re at the mercy of whatever deals they make for third party content, as it has been for years with cable and satellite. Presumably people should be watching Netflix for the original content, but many of them watch for the catalogue of third party content. And I do think many people don’t want to have to decide what to watch, or have an agenda of programs to watch, but rather turn on a service and watch whatever’s on. A la carte makes that kind of convenience difficult, as every decision is whether to spend or not to spend, and that choice further carries the fear of regret over watching something new, thus stemming the flow of new and unique programming.

So there’s pros and cons for each. At least with these direct to consumer models, all the money is going to the entertainment and not to the delivery system. Turning a service off and on is a mere click of a button, rather than painful interaction with customer service, waiting for the cable guy, and lengthy onerous contract commitments.
Very well thought out and written. I may not agree with everything but I have to give some serious thought about why I disagree, and whether I’m right.
 
I think there’s a way for Apple and Disney to work together rather than become rivals. With Google, it was inevitable as they had Android and were true rivals to Apple’s main business. With Disney, the content is complimentary to Apple’s hardware business and Disney stands to benefit if their content is given preferential treatment.

The solution is this: Subscribe to Disney+ as an AppleTV Channel and get free AppleTV+ access. All of Disney’s shows and Apple’s shows appear in the TV app so both Apple and Disney benefit. Disney has a far bigger catalogue than Apple. It Apple has a hardware platform with a billion plus installed base. Together, they can beat Netflix and make Disney+ the new leader in streaming video and elevate the AppleTV as the leading hardware platform.
 
Apple TV+ is dead even before launch :D
All those Disney content for just $7 a month..and there is the mighty Netflix there too..there is no way Apple stands a chance as they can’t compete with content / price at all.
 
Apple TV+ is dead even before launch :D
All those Disney content for just $7 a month..and there is the mighty Netflix there too..there is no way Apple stands a chance as they can’t compete with content / price at all.

You assume that Apple is launching ATV+ to compete with Disney+ or Netflix. I don’t think that’s the case at all. If anything, Amazon is their direct competition in this area.

That said, all it takes is one hit show to boost ATV+ future. I currently subscribe to CBS All Access for one show: Star Trek Discovery. I subscribe for 4 months during the season then unsubscribe. There’s absolutely nothing else on that app I’m interested in watching much less paying for. But CBSAA is developing exclusive shows for the platform, and some of them I’m interested in seeing, like Jordan Peele’s remake of Twighlight Zone. In the beginning, that’s all Apple needs. Netflix was ultimately built the same way, but that’s not to suggest that’s Apples end goal. In the meantime, they’ve made their app available on as many platforms as possible, so when that one show takes off, they can generate revenue from as many sources as possible. With any luck, the non-Apple customers who experience the popular show through Apples technology, will give other Apple products a try. Meanwhile, Apple customers may have an added value proposition with Apples original programming when they subscribe to ATV+ for other subscriptions. We just don’t know yet what Apples plans are.
 
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