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Sony Exec Discusses Unique Windowing Options as Content Arms Dealer, Questionable Decisions from Streaming Companies

Matt Tamanini

When everyone in the entertainment zigged to launch their own in-house streaming services, Sony zagged, getting out of streaming and becoming what some have called an entertainment arms dealer. Being able to work with multiple companies and to distribute films and TV shows across the streaming landscape has been a financial boon for Sony.

Shortly after the company signed a blockbuster deal with Netflix last year, it also inked an agreement with Disney. After a Sony film plays in theaters, Netflix gets an 18-month window, followed by an exclusive run on Disney+ or any Disney-owned TV stations. Variety reports that with Netflix and Disney deals combined, Sony is expected to rake in about $3 billion in movie licensing over the life of the deals. This is in addition to the company’s Pay-One deal with Lionsgate that brings certain films to Starz.

On Thursday, Sony Pictures Entertainment’s chairman and CEO Anthony J. Vinciquerra appeared at the 2022 Bank of America Media, Communications and Entertainment Conference to discuss how his company has approached the changing dynamic between theatrical and streaming.

“I think the keyword is ‘flexibility’ in the windowing,” Vinciquerra said. “‘Spiderman[: No Way Home]’ was in theaters for 90-plus days because it kept going. Some films, we’ve had less than 45 days, not a lot, but films that weren’t doing great in the theater, we [pulled] out because it wasn’t helping the theaters, or it wasn’t helping us so why not go to the other windows. But 45 days does feel like the right number for the majority of films, but you’ll see longer and shorter [windows from Sony], I think.”

Unlike studios that have their own streamers to service, Sony does not feel the pressure to bring films directly from cinemas to streaming. Instead, the company can take advantage of long windows between a movie’s theatrical release and when it is available on a subscription video-on-demand (SVOD) service like Netflix or Disney+. This allows Sony to capitalize on other revenue streams, including premium video-on-demand (PVOD) and physical media sales.

“The electronics sell-through businesses have been enormous for us, just spectacular, and we’re very, very happy with that,” Vinciquerra said. “The rentals, the sales of digital films with ‘Spider-Man: No Way Home’ set a world record
by a massive difference in the number of units we sold … ‘Morbius,’ which really wasn’t a great film, did really, really well in electronic sell-through, and ‘Venom[: Let There Be Carnage’] did extremely well.”

Vinciquerra also discussed the post-theatrical success of video-game adaptation “Uncharted” and how more recent films like the adaptation of the best-selling novel “Where the Crawdads Sing” and the star-studded heist film “Bullet Train” are poised to do very well via home media distribution platforms as well.

Since Sony has found success in PVOD and physical media, that means that the company can take its time in bringing films to streaming. As a result “No Way Home” took 210 days between debuting in theaters and arriving on the STARZ streaming service. Similarly, “Uncharted” arrived on Netflix 168 days after having its big-screen bow. While at times this can be confusing for consumers, it is obviously beneficial for Sony.

By keeping its money-making opportunities tightly controlled, the studio is able to ride the wave of its theatrical marketing into other revenue paths, and often streamers benefit as well.

“The impact of the marketing campaigns on the value of the brand of a film is enormous when it goes into
theaters,” Vinciquerra. “And I think the SVOD streamers are now starting to figure that out. It’s a great example, ‘Uncharted’ went to Netflix as part of our Pay-One deal, and it did about the same number of views or minutes or however they’re measuring it as ‘[The] Gray Man’ which they spent $200 million on. And — even though we had a really, really good deal — they didn’t pay us $200 million for ‘Uncharted’ … When you spend all that money and then you put it into home entertainment 45 days later, you don’t have to spend as much to promote the home entertainment window.”

During his appearance at the conference, Vinciquerra seemed to question the approaches of other media companies as they try to upend the streaming model. While he did not mention Warner Bros. Discovery, nor its CEO David Zaslav, by name, the Sony exec seemed to subtly call into question some WBD’s recent, more controversial strategies.

“We’d like to get to 15 films a year. I’m not sure we’ll get there, I think we’ll get to 12 because, again, finding the films that we know will do well, or we think will do well [is difficult]. Some people are out there saying, ‘We’re only going to release films that they’re going to do well,’” Vinciquerra said referencing Zaslav’s comments about shelving a nearly complete “Batgirl” movie. “I don’t know how you do that, but hopefully, the people we have in our film group — which have proven they do have the mettle — have the judgment to do that.”

Vinciquerra also seemed to question the idea of taking content created for one platform and selling it off to another, simply because it doesn’t meet certain quality or bottom-line thresholds. WBD execs have also mentioned the idea of selling off content originally planned as Max Originals in order to make as much money off of projects as possible.

“As a buyer, how excited [are you] going to be to take a product that they didn’t feel is good enough for their own SVOD service?” he said. “So that’s — again, an interesting dynamic to watch going forward.”

The executive continued to predict that there will be further consolidation in SVOD services — HBO Max and discovery+ are set to merge next summer. While he believes that there will be fewer streaming platforms in the future, there is no doubt that Sony will continue to find ways to work with as many of them as possible, reinforcing the company’s decision to focus on content distribution, rather than building its own streaming service.

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