How Home Video Sales and Rentals Can Revive a Box Office Flop

When a movie fails to make a splash at the box office, is there still hope for it to generate profits through home video sales and rentals? This article delves into the complex ecosystem of a movie's financial lifecycle, from theatrical release to streaming.

Theatrical Flops and Box Office Revenue

While it's a common misconception that a film must disregard all other revenue streams after its box office performance, the reality is that studios and production companies often rely heavily on home video sales and rentals to recoup their investments. Many films, despite receiving positive reception and becoming cult classics, are considered flops at the box office due to underwhelming performance. For instance, a movie might later become beloved by viewers outside of its initial theatrical run but fail to break even on its initial theatrical release.

However, studios scrutinize box office revenue as their primary measure of success, aiming to generate an optimal return on investment (ROI). In the case of a flop, the lack of immediate financial success often means that the movie becomes a burden, deterring studios from pursuing further distribution avenues. Yet, some films continue to generate revenue through home video sales and rentals, which can include DVDs and streaming platforms.

Modern Revenue Streams

The revenue landscape has evolved significantly in recent years. Films like Glass Onion: A Knives Out Mystery exemplify this shift. This 2022 film was theater-released for just one week, landing in the top box office but not achieving the long-term success the producers initially aimed for. A longer release period would likely have vaulted it into the top tier of profitable films. However, despite the limited theatrical run, the film's streaming debut on Netflix saw it generate substantial interest through word-of-mouth and critical acclaim.

Similarly, The Killers of the Flower Moon, directed by Martin Scorsese, garnered significant critical praise but struggled to cover its substantial production costs. The film's streaming debut on Apple TV generated buzz and drew a larger audience, generating financial and critical success.

The Shift to Immediate Streaming

The trend of immediate streaming releases is becoming more common. The days of waiting six months for a movie to hit video rental or pay-per-view have virtually disappeared. After a film is released in theaters, the lifecycle already includes plans for streaming and home video releases. For example, the 2017 film The Greatest Showman had a surprisingly long theatrical run, earning money in cinemas for four months beyond its initial release. Meanwhile, studios are compelled by distribution contracts to make DVDs available as a contractual obligation.

Therefore, the release model has changed, and the success of a film is no longer solely reliant on a blockbuster theatrical run. Modern film distribution strategies focus on leveraging both theatrical and digital platforms to ensure a longer and more sustainable revenue stream. This shift highlights the importance of marketing, word-of-mouth, and critical reception in driving a film's success.

For filmmakers and studios, understanding this new landscape is crucial. By focusing on strategies that capitalize on home video sales, streaming, and international markets, they can potentially improve their financial performance and maintain their long-term profitability.