'No Time to Die' sale could have reached $600M
The upcoming James Bond film "No Time to Die" may not head to Apple TV or other streaming services for a premiere after all, but it seems studio MGM did explore the possibility of selling the movie with a $600 million price tag.
Daniel Craig in the trailer for 'No Time to Die'
Reports surfaced in October that the repeatedly-delayed Bond movie "No Time to Die" was being shopped around streaming services for a potential sale, rather than delaying the film's release any further. In an update on Saturday, studio MGM has insisted the sale to Apple or any other streaming provider isn't happening.
"We do not comment on rumors. The film is not for sale," a spokesperson told Variety. "The film's release has been postponed until April 2021 in order to preserve the theatrical experience for moviegoers."
Report sources claim a potential sale was explored, with MGM interested in such an offer, but only at a high price. Insiders suggest the deal would have cost the eventual buyer roughly $600 million, which was apparently too high for streaming services to undertake.
While seemingly quite high, streaming services have been known to pay out considerable sums for content. For example, Apple's purchase of Tom Hanks epic "Greyhound" was reportedly to the tune of $70 million.
The high price is likely to have been attributed to the perceived strength of the James Bond brand, as well as a need to recoup the costs of production. The film is said to have cost in excess of $250 million to produce, though that was offset by promotional partnerships with Land Rover, Omega, and Heineken.
It is highly probable that those companies wouldn't be keen on a streaming-only release for the film, given their marketing efforts. If the promotional partners wanted a partial refund on what was paid to MGM, the studio would have to factor that into an eventual sale, as well as having the firms agree on such a sale to begin with.
As movie studios are continuing to feel pressure to offload their properties to streaming services due to the ongoing coronavirus pandemic causing issues for theater revenue, it is likely more deals such as that of "Greyhound" will take place for the foreseeable future.
Daniel Craig in the trailer for 'No Time to Die'
Reports surfaced in October that the repeatedly-delayed Bond movie "No Time to Die" was being shopped around streaming services for a potential sale, rather than delaying the film's release any further. In an update on Saturday, studio MGM has insisted the sale to Apple or any other streaming provider isn't happening.
"We do not comment on rumors. The film is not for sale," a spokesperson told Variety. "The film's release has been postponed until April 2021 in order to preserve the theatrical experience for moviegoers."
Report sources claim a potential sale was explored, with MGM interested in such an offer, but only at a high price. Insiders suggest the deal would have cost the eventual buyer roughly $600 million, which was apparently too high for streaming services to undertake.
While seemingly quite high, streaming services have been known to pay out considerable sums for content. For example, Apple's purchase of Tom Hanks epic "Greyhound" was reportedly to the tune of $70 million.
The high price is likely to have been attributed to the perceived strength of the James Bond brand, as well as a need to recoup the costs of production. The film is said to have cost in excess of $250 million to produce, though that was offset by promotional partnerships with Land Rover, Omega, and Heineken.
It is highly probable that those companies wouldn't be keen on a streaming-only release for the film, given their marketing efforts. If the promotional partners wanted a partial refund on what was paid to MGM, the studio would have to factor that into an eventual sale, as well as having the firms agree on such a sale to begin with.
As movie studios are continuing to feel pressure to offload their properties to streaming services due to the ongoing coronavirus pandemic causing issues for theater revenue, it is likely more deals such as that of "Greyhound" will take place for the foreseeable future.
Comments
Unfortunately for them, the whole model and nexus of power may have been permanently changed
LOL. Ya think? How much did Apple pay for NeXT back in the day?
Where MGM may be losing leverage is a shrinking number of viable movie screens in North America and Europe. AMC (#1 in US) is said to have enough cash to last 2020, while the British company which owns Regal (#2 in US) just shut those theaters down for the remainder of this year. These companies have expensive lease payments to make on their locations and no software to program. Bond was moved from Spring 2020 to Fall 2020 to Thanksgiving, and now to Spring 2021. There may be legitimate concerns how many screens they will have access to by next Spring. Selling now could be selling high if they have no pathway to show the film in the massive exposure these films need (thousands of screens in the opening couple of weeks to get the highest, fastest return).
But Apple is focused on grow its non-iPhone business, and the news stories that would result from a 007 deal might be worth tens of millions in publicity for ATV+ in 2021. Along with a new season of “Morning Show”, Emmy nods for shows like “Ted Lasso”, and an Oscar nomination for Bill Murray in “On the Rocks”, next year could be a big step forward for ATV+. James Bond would be an accelerator.
Having said that, we have no idea how much a mega hit would be worth to Apple or other streaming services. And would these streaming rights include China (which is now the biggest movie market)?
As others have said $600M is a made up number that MGM is floating to make any other offer sound reasonable. They rather people have that number in their heads than the $70M that Apple paid for the Tom Hanks movies.
The streaming service would pretty much have to charge for the rental on top of the normal subscription. I think streaming services would benefit from having a hybrid model of per-view purchases and content streamed as part of the subscription but all baked into a subscription payment. Netflix will be nearing 200m subscribers, if they could convince half the subscribers to pay $10 to add the movie to their library, they'd recoup $1b.
It would probably be best to take the payments in advance to combat piracy so advertise the movie availability on a certain day and have people prepay to be able to view it. Once it passes a certain threshold of payments (can be deferred payments), it can be greenlit for the premiere, if it doesn't pass a certain threshold, they can choose to cancel the launch and the deferred payments. Like a crowdfunded premiere, not much different from premium sports events.
The idea mentioned of bundling streaming rights to every Bond movie for a period of time would make the deal more compelling and would be a good setup for Christmas. It's still a lot for a streaming service not charging per view because $600m is the break-even price for the streaming service so I think it would only be feasible if the streaming service was willing to charge extra per view.
Potentially they could split it between the services so Amazon, Apple, Netflix, Hulu pay a fraction each the same way multiple cinema chains host the same movie but there's not a huge incentive to pay out over $100m for non-exclusives. Hopefully the cinema business model can be adapted to streaming because there's a void of premium content and it just needs a way of ensuring the revenue expectations are met.
Someone earlier posted the global ticket sales for the last few Bond films, and none approached that figure. In addition, ticket sales is not what the Studio earns, since it splits that amount (in varying degrees) with theater owners, distribution companies, and state governments.
$600M isn’t relevant to the history of the Craig-era Bond films. And as I stated before, with the theater distribution model in complete chaos, the likelihood for a big theatrical payday for the Bond producers now is very slim, even if they wait until Spring (“Tenet”, which should have been a $400M film in the US, returned like a very successful rom-com, with theaters in NY and CA unavailable, and theaters in other states open to limited crowds). But while they wait, the various companies with equity stake in the film have bills to pay but no income from the film.
IF there is a decision by MGM to sell the film to a streaming company, it will be for significantly more than the $70M Paramount received for “Greyhound”, but nothing near $600M—those are the musings of someone huffing something.
https://www.the-numbers.com/movie/Skyfall#tab=summary
https://www.the-numbers.com/movie/Spectre#tab=summary
The following has inflation adjusted figures for the franchise:
https://www.thejamesbonddossier.com/james-bond-films/box-office-figures-for-the-james-bond-series.htm
It's true the revenue is split with the distributors. The following site referenced some distributors as saying it's typically close to 50% but depends on the movie success:
https://stephenfollows.com/how-a-cinemas-box-office-income-is-distributed/
The movie had a production budget of $250m, likely $100m marketing budget so if they sell below around $350m, they will lose money on the movie.
$600m seems like the kind of performance of Skyfall under normal circumstances without the theatre distribution fee. They certainly wouldn't be able to achieve that releasing to cinemas now or in the near future and I don't expect this particular movie would perform like Skyfall.
With the right distribution method I think that they could make that kind of money with a digital release though. I don't see why 100 million people worldwide wouldn't be prepared to pay $5-10 to see this on streaming networks.
The streaming networks wouldn't even have to pay upfront, they could just market it on their sites. They could have a Digital Premiere banner for the movie with a button "add to library for $5-10" and people would add it. Once they cross around 35m sales, that's the budget covered and whatever comes after that, they can negotiate revenue splits.
Blockbuster movies like this need a way to allow viewers to directly buy viewings outside of the usual subscription.
As to counting how many "people" would buy/rent a movie, remember that that "households" buy/rent movies at home whereas individuals sit in movie theaters.
Spectre had $200 million domestic box office (and 3.4 times that overseas). So that probably translates to 13 million butts in seats and 12 million unique individuals or 4-5 million households domestically. At $30/household, that's $120-$150 million. And that assumes that everyone who would have seen it in the theater would buy the streaming at a premium rather than waiting a while for it to show up on non-premium streaming. There's big money to be made, but it's likely significantly less than the pre-Covid hay day.
MGM isn’t a studio, in the way Paramount or Universal are film production companies. It owns the rights to a few franchises (notably the Bond and Rocky movies). With Bond, MGM has a partnership with Sony Pictures, dating back to some litigation some years back (in Hollywood, just about every business relationship has its origin in prior litigation, it seems). Distribution rights are auctioned off for different parts of the world to various companies (the concept of “pre-sale”), which helps insulate the producers from possible financial issues during the making of the film—the producers getting a cut up front, and the distributors are assuming a portion of the risk in return for larger % of the take.
Then there is the fact the Bond films are produced by the children of Harry Broccoli, not MGM itself, and there are monies owed there.
Money is borrowed to finance the film, and interest accrues, regardless of whether or not the film is playing somewhere. If the film companies don’t have faith the theaters will be in robust health and capable of lighting several thousand screens in the US alone, then they may want to pull the ripcord now and make the best deal possible.
I imagine MGM needs to reimburse distributors for money advanced if the film rights are sold to digital distribution. But at some point, the company may be facing taking much less than a dollar for a dollar’s worth of film equity and writing off the losses. Because MGM didn’t “earn” $600M off Skyfall, once all other parties were compensated. Since that figure represented the total efforts of hundreds of participants globally, a company like Apple which is NOT global (ATV+ is in a number of countries and languages, but is not global, just as Netflix isn’t) wouldn’t reap that kind of return on its own.
Maybe you’re right and MGM goes the Mulan route and charge $30 per household to get some revenue back from the investment. Doubtful they’d get 20M people globally to pay that kind of money (not possible in India, China, etc), but they might get $100M or more. A lump sale to Netflix or Apple for $200M or $250M might be a preferable outcome.