In bid to boost Peacock, Universal sending 3 movies straight to streaming

DONNA Langley, head of Universal’s Motion Picture Entertainment Group, stepped on the stage at Caesars Palace in Las Vegas last week and reaffirmed her commitment to movie theatres.

“Theatrical will always be the cornerstone of our business,” she told the crowd of theatre owners gathered for the annual CinemaCon industry convention, adding, “Cheers to that.”

It was not just lip service. With more than 25 films set for release in 2022, Universal has at least 10 more than any other major Hollywood studio.

It will release a combination of blockbusters (Jurassic World Dominion), family fare (Minions: The Rise of Gru) and original bets (Jordan Peele’s Nope and Beast, starring Idris Elba), operating on the premise that a movie’s value begins with its debut in theatres.

Yet Monday (May 2), as part of a presentation for advertisers, Kelly Campbell, president of NBCUniversal’s streaming service Peacock, announced that 3 new movies produced by Universal Pictures will head straight to the streaming service when they debut in 2023.

They are a biopic about LeBron James based on his memoir, Shooting Stars; a remake of John Woo’s 1989 crime drama The Killer; and Praise This, a music-competition feature set in the world of youth choir.

The additional film content is crucial to the strategy at Peacock, which announced last week that it had ended the first quarter of the year with more than 13 million paid subscribers and 28 million monthly active accounts in the United States, a growth of 4 million users. It needs to find a way to compete with the bigger services, like Netflix, Disney+ and HBO Max, when streaming subscriber numbers seem to be plateauing.

Langley green lit all 3 pictures and had to make the calls to tell the filmmakers about the change in distribution strategy.

“I think everybody sort of woke up and smelled the coffee during the pandemic and recognised that not all movies are created equal,” Langley said, adding that the filmmakers were still interested in working with the studio, even if it meant going straight to Peacock.

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“It’s a big deal for Peacock to have these movies. They are events for them. And we got yeses, so I think it was a satisfying rationale.”

The 3 movies also reflect the type of audience Peacock seems to be attracting: younger and more diverse than those who gravitate toward the other legacy businesses run by Comcast, Peacock’s parent company.

“What you’ll see with these films is that they are broadly appealing but also track towards that young, diverse audience that represents the streaming audience of today, the generation of consumers who are choosing streaming as their primary source of entertainment,” Campbell said.

Despite lagging behind some of its streaming competitors, Peacock has experienced success this year. February was a high point, when viewers could see the 2022 Winter Olympics, the Super Bowl, the simultaneous release of the Jennifer Lopez-starring film Marry Me in theatres and on the service, and the debut of Bel-Air, a dramatic re-imagining of the 1990s hit television series The Prince of Bel-Air, which starred Will Smith. (Season 2 is in development.)

“Retention on our service after airing all of this special content in such a concentrated period of time was well above our expectation,” Brian Roberts, chief executive of Comcast, said in an earnings call last week. “We have seen a 25 per cent increase in hours of engagement year-over-year.”

When the pandemic upended the theater business, Universal Pictures experimented with a variety of distribution methods for its movies.

There was the purely theatrical like Fast 9: The Fast Saga, which earned US$173 million after it was released in the summer, when coronavirus cases were lower. And there was Sing 2, which earned more than US$160 million domestically after being released in December, before going to premium video-on-demand just 17 days after its debut in theatres.

The company has also experimented with simultaneous release, debuting Halloween Kills and the sequel to Boss Baby in theatres and on Peacock during the height of the pandemic. The company will do so again in 2 weeks with the remake of Stephen King horror film Firestarter.

“There’s no one size fits all,” Langley said. “It really is about looking at the individual movies on the one hand and then also at our growth engine Peacock, and doing what’s best in any given moment, depending on what’s going on in the marketplace. I’m hopeful that this stabilises over time as the theatrical landscape stabilises. But until then, we do have this optionality.”

Like every other studio executive, Langley is involved in the complicated calculus of determining what movies fit where in a world where the theatrical box office is down 45 per cent from what it was in 2019.

It is “a box office that is in decline”, Langley said, with theatregoing in 2023 expected to still be down at least 15 per cent from its pre-pandemic level.

She described the 3 films that she chose to put straight on Peacock as “movies we love that a decade ago would have been no-brainers” to make and release in theatres.

But audiences have more choice now about when and where they watch films, and it can be more difficult to convince them that a film is worth seeing in a theatre.

“We still want to make these movies because we believe in the stories, we believe in the storytellers, and we think that these are great pieces of entertainment,” Langley said. “We have the ability to be able to avail ourselves of our streaming platform. And we think that they are events, actually, to be released into the home, very specifically for the Peacock audience.”

Peacock is buying the films from Universal Pictures, a portion of the US$3 billion it intends to spend on content in 2022, ramping up to US$5 billion in the next couple of years.

Langley said that while 2023 would feature 3 straight-to-Peacock films, she hoped to release 7 to 10 films that way in the coming years, films that would all be developed and produced by the same Universal creative team that is behind the Jurassic Park and Fast and Furious franchises.

“Peacock’s future depends on having good content, and our future depends on having flexibility in our distribution models,” Langley said. “So our agendas, ultimately, are aligned. So, yes, there’s debate about any one particular title or something they might want that we can’t deliver or vice versa, but that’s the stuff of working inside a big corporation.” THE NEW YORK TIMES