Monetizing Movies: Where Can the Box Office Go Next?

The Oscar's are coming up - a lot of great pictures on the docket. Classics across genres are vying for the most prestigious award in the movie industry, Best Picture. These are just a few examples of movies that have found success in theaters and on streaming platforms alike.

It's no surprise that the box offices have been struggling over the course of the past few years. In 2020, only $2.1 billion was brought in by the box office. A combination of movie theater shutdowns and fewer movies being created, meant that 2021 didn't  have quite the rebound - $4.48 billion dollars (still 40% less than 2019).  Does this mean that movies will become more scarce, or not as well-produced? What will happen if the box office can't recover? Let's dive in!

How The Box Office Can Make Additional Revenue

With a shift in consumers' movie-going habits, the movie industry will need to think about ways that they can increase revenue to justify making movies at all. In fact, a survey in January 2021 stated that 61% of survey respondents say they won't return to movie theaters.

To drive more interest in movie theater ticket purchases, MoviePass has started to offer free or discounted tickets. Well, not truly free. MoviePass has switched to an ad monetization revenue model where AI tracks the eyes of MoviePass subscribers so that they can watch ads in exchange for movie ticket discounts.

Many movies have adopted a "direct to streaming" or direct-to-release approach. For example, Disney released Mulan and Raya and the Last Dragon directly onto their streaming platform. Mulan was offered at an additional $29.99 to subscribers, who were already paying to be subscribed to Disney+. Amazon Prime released plenty of direct-to-release films for a 48-hour rental period.

Commercials in movie theaters is hardly a new concept - think about all of the previews that are played before the feature film. But, what if movie theaters took it one step further and allowed brands to place commercials throughout the entire movie.

If you buy a direct-to-release from a cable channel, there are typically a few commercials before you can watch the content. Just like in the theaters. Commercials in movie theaters is hardly a new concept - think about all of the previews that are played before the feature film. But, what if movie theaters took it one step further and allowed brands to place commercials throughout the entire movie. Well, at-home movie watchers nowadays would likely revolt, and they definitely would at the movie theater if they paid $20 to see the movie in the first place. Free content engines have trained humanity to expect ads if content is free, but not if the content is paid for.

But, what's stopping direct-to-release films from selling tiers. Maybe an ad-free version vs. a sponsored version? Even better, formats like On-Stream would allow brands to advertise within movies at times where their product aligns. This could allow movie production companies to make more money on their films and reduce the barriers to entry for brands wanting to advertise in movies. Think of it like product placement, but programmatic. This would allow brands to bid and serve ads on movies that are trending or about topics that are related to the brand.

Netflix? Hulu? Amazon? Disney? You in?