[ad_1]
Apple has spared no expense in its embrace of movie theaters, shelling out $200 million to produce historical epics, war dramas and action comedies… all while the global box office shrinks and rivals struggle to tighten their budgets. .
For most studios, these expenses would be ruinous at a time when almost no films make enough money to justify that kind of budget. However, as one of the richest companies in the world, Apple’s spending habits in the entertainment space are jokingly called rounding errors. But can the tech giant continue to spend big on big screen glitches? Or will a series of underperforming blockbusters eventually force Apple to economize?
That’s the big question after Matthew Vaughn’s spy thriller “Argylle” flopped in its debut with $18 million domestically and a disastrous $35 million worldwide. It is the third consecutive Apple release in which a huge budget will make it almost impossible for the film to turn a profit in its theatrical release. A film of this size and scale at a traditional studio would need at least $500 million worldwide to break even. Fewer than 10 films in 2022 and 2023 reached those heights. It’s an especially unlikely benchmark for “Argylle,” as the action comedy, starring Bryce Dallas Howard as a reclusive author whose spy novels end up being eerily prophetic of real-world events, has received negative reviews and audience scores. discouraging. Instead of fulfilling Vaughn’s plans to turn the story into a trilogy, “Argylle” is shaping up to be the first flop of the year.
“No studio can sustain massive expenses highlighted by disappointing box office,” says Jeff Bock, an analyst at Exhibitor Relations. “The failure of ‘Argylle’ at the box office is bad press. So, in some ways, it has already had a negative impact on their (streaming) earning potential.”
There is still a lingering debate over Apple’s first two major releases: Martin Scorsese’s “Killers of the Flower Moon” ($156 million worldwide) and Ridley Scott’s “Napoleon” ($219 million worldwide). Basically, those films either didn’t meet or slightly eclipsed their $200 million price tags. That’s a problem since studios split ticket sales with theaters. On top of that, Apple has to shoulder tens of millions in promotional costs as well as distribution fees for Sony, Universal and other companies that book Apple movies in theaters.
But Apple has a different business model. So, were those results good for streaming-backed tentpoles or terrible for mega-budgeted movies with big-name directors and notable stars? “Killers of the Flower Moon” and “Napoleon” were adult prestige dramas with big budgets, R ratings, and eternal runtimes — the exact kind of movie that people I did not do it was seen in theaters again since the pandemic. So while neither was in danger of recouping its investment, those films sold a decent number of tickets, especially compared to Scorsese’s last film, the Netflix crime epic “The Irishman,” which didn’t screen at all in theaters, and Scott’s previous film. , Disney and 20th Century’s period film “The Last Duel,” which cost $100 million to make and grossed a tragic $33 million worldwide.
For now, Apple movies won’t be any less expensive. Upcoming films in its slate will cost between $100 million and $200 million and include an untitled space race comedy set in the ’60s, starring Scarlett Johansson and Channing Tatum; “Wolfs,” a psychological thriller with George Clooney and Brad Pitt; and Pitt’s “Formula One” feature from “Top Gun: Maverick” filmmaker Joseph Kosinski.
Apple does not share subscriber numbers or audience data on its platform. Therefore, it is impossible to know whether products like “Killers of the Flower Moon” or “Napoleon” are attracting new customers to sign up. These movies may get a small boost from premium video-on-demand sales in home entertainment, but they aren’t benefiting from other downstream revenues, such as consumer products.
The company has remained similarly quiet about its overall film strategy, which appears to prioritize prominence over profits. While you experiment to find a winning formula, these strong theatrical releases can be deducted as advertising expenses. Ideally, theaters can help their movies generate enough awareness to generate awards buzz and buzz for their streaming service, Apple TV+. Will there come a point where Apple becomes associated with theatrical flops, preventing talent from wanting to work with them? And what about popcorn movies like “Argylle,” which isn’t the kind of project that will be rewarded with Oscar attention in the future?
“No matter what the end goal is for streamers (promotion, awareness, influence), the underlying idea is that audiences will flock to their platform because of the strength of their product,” Bock says. “They show a lot of cash to attract talent, but they fail to make a mark with the product.”
Analysts point out that Apple is new to the movie business and has only released three major films to date. Some believe the company’s huge market capitalization gives it the financial flexibility to continue discovering the model that works best. However, like any publicly traded company, Apple is beholden to shareholders and has to justify how it allocates its capital.
“We’re looking at a small sample of three movies in six months,” says Shawn Robbins, chief analyst at BoxOffice Pro. “Apple has such deep pockets that it can keep investing until it finds the model that works, even if it does so at a loss.”