In addition, this analysis highlights how widely this model differs to a traditional theatrical release that often limits film distributors in offers today. Putting the various pieces together provides a more complete picture and understanding as to why streaming platforms are motivated to spend large sums on specific content in order to drive brand value and subscribers. All to say, our data shows single picture acquisitions can drive a great deal of value for streaming platforms with the acquisition costs ascribed to customer acquisition / marketing expenses. It seems as though AppleTV+ is taking a page out of the Hulu playbook and possibly also motivated by the strong results generated by their GREYHOUND acquisition (Sony title that we analyzed last year: GREYHOUND ANALYSIS). If one assumes a US$10 value per new subscriber the monetary benefit is US$34m. In Q3 2020, the quarter during which PALMS SPRINGS was released, Hulu Subscriber numbers increased by 3.4 million or 11% to 35.5 million – its strongest quarterly subscriber growth of the year. Both titles had budgets that towered in comparison. Releasing in July, it launched a strong #3 behind GREYHOUND (AppleTV+) and THE OLD GUARD (Netflix) and continued to play well through the summer. When looking at our OTT demand data, one notices that Hulu struck gold with PALM SPRINGS as it became Hulu’s most watched original movie of 2020. We ran the title in January of 2020 and found that on a 1,000 theater release, the film would generate US$28m of overall revenue.Ĭomparing the two titles, the CODA price tag feels aggressive. PALM SPRINGS sold to HULU last year at Sundance for US$22.5m (including bonus). By doing so one can understand the true value of such a title to a streaming platform. To fully appreciate the business case for CODA, one needs to analyze the streaming model for comparable films.
Traditional revenue forecasts and creative fit only partly explain CODA attracted a US$25m price tag. As AppleTV+ self distributes globally, the worldwide revenue forecast at the 40% confidence interval is a true indication of total value to a streaming platform.įrom a creative standpoint, the film clearly fits into Tim Cook’s creative vision for AppleTV+, uplifting messaging with a distinct programming sensibility to compete with the likes of Disney+. The film’s charm, creative fit and online/critical response set off a bidding war among several potential acquirers before AppleTV+, with its deep pockets, emerged victorious over the weekend. The worldwide revenue forecast indicates that the US$25m purchase price is close to the base case and right on target at the 40% confidence level.
Based on the 19 input assumptions, the platform predicts that CODA could generate worldwide revenues of US$21.6m in the median base case (the most likely outcome). Looking at this disconnect we took a deeper dive to see if one can make a case for the price paid.įirst we ran Cinelytic’s predictive revenue module to assess global gross revenues which exclude exhibition and distribution expenses in. Therefore, it was a surprise to many that AppleTV+ paid US$25m, the highest fee ever for a Sundance title. The forecast analysis clearly illustrates that the value of CODA to a traditional distributor without streaming platform support is between US$3-5m globally. Overall, Cinelytic’s median forecast is 85%+ accurate. If audiences catch on, these figures can increase as shown in our probability weighted forecast scenarios. By taking into account key project variables and a $4m investment the system predicted a ROI of 12.8% in the median revenue forecast – the outcome with the highest probability. We ran Sundance hit CODA on our data-driven platform as a classic theatrical release in a post-Covid environment. We used our platform to shed some light on CODA’s value to different sides of the market and what that says about the current state of the independent film industry. direct to OTT release by using our OTT demand data and our AI-driven content intelligence platform. Click to share on LinkedIn (Opens in new window)Ĭinelytic provides critical insights into the economics of a traditional theatrical vs.Click to share on Twitter (Opens in new window).Click to share on Facebook (Opens in new window).
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