How “Halloween Killing” fits into Peacock’s streaming strategy

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Michael Myers returns in Universal Pictures’ “Halloween Killing”.

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When Universal Pictures announced in early September that its highly anticipated horror sequel “Halloween Killing” would debut on the same day in theaters and the company’s streaming service Peacock, the entire industry was caught off guard.

The distribution shift took place in September, as other film companies are working on exclusive theater distributions amid rising daytime box office and piracy rates.

However, this move shows how Universal Pictures adjusts its strategy when unique opportunities arise, so that its emerging streaming services receive more attention.

“It makes perfect sense,” said Jim Orr, president of Universal Pictures’ domestic cinema distribution.

“A horror film, like a comedy, is not just the movie itself, it is the reaction, it is the atmosphere, it is the experience… there is a contagious element that can be added to the movie,” he said. “However, not everyone wants to enter the theater or can enter the theater at this time, so offering it on Peacock, especially in October, is very meaningful.”

The idea of ​​dual distribution was actually proposed by Jason Blum, CEO of Blumhouse Productions and producer of “Halloween Killing”. Blum cites the disappointing box office results of the “Freaks” in 2020, which is a major shift from the premise of the traditional comedy “Freaks Friday” and the continued unpredictability of the coronavirus pandemic.

“Freaky” was released exclusively in November last year and was shown in theaters for several weeks before entering the home video market. However, despite the rave reviews, the global box office revenue of the film only reached about 16 million US dollars.

Blum intends to return to the traditional exclusive theatrical release at “Halloween End” in 2022.

Peacock’s harvest

By placing high-profile content such as “Halloween Killing” on Peacock, Universal Pictures is seeking to add value to existing customers and attract new subscribers. It is hoped that these audiences can participate in this new movie, and then explore Peacock’s library or experience its other functions, such as live sports and news reporting.

In early 2021, when the streaming service regained the right to the “office”, as subscribers explored other content on the platform, the ratings of programs such as “Parks and Recreation”, “Brooklyn Nine-Nine” and “Yellowstone” increased. rise. content.

It is worth noting that October 2020 is the most watched horror and fantasy series in Peacock’s history. Therefore, Universal already knows that its audience likes the content and will interact with it.

As the streaming war continues to heat up, Universal needs to implement such a strategy to attract and retain customers and differentiate itself from competitors.

To be sure, the success of ad-supported Peacock looks different from the success of subscription-based streaming services. Although the revenue of Netflix and Disney+ is completely dependent on user growth, Peacock’s revenue comes from a combination of new members and third-party advertisers.

This is why Peacock does not provide subscriber numbers. Instead, it provides quarterly updates about registrations (those who provide emails for free services) and monthly active users, which is a way of reporting how many people use the app regularly in a month.

In July of this year, Universal’s parent company Comcast stated that Peacock had 54 million registered users and more than 20 million monthly active accounts in the second quarter. This is 50% higher than the previous quarter. The company is scheduled to announce its third quarter results on October 28.

These numbers are usually placed side by side with other streaming services, but Dan Rayburn, a streaming media expert and principal analyst at consulting firm Frost & Sullivan, warns against this “apple and orange” comparison.

“I think, unfortunately, because of the success of Disney and the growth rate of Disney+ subscribers, people see it as a barometer. But this is not the same service, but a different price point,” he said.

The duration of Peacock’s shows, movies, and specials has increased from 20,000 hours at launch to nearly 60,000 hours, and they are free. For $4.99, you can access exclusive Peacock original series and live sports shows with advertisements. You can skip the ads for $9.99.

What does this mean for the box office

Universal Pictures will inevitably put “Halloween Killing” on its streaming service on the same day the movie is released, thus giving up some box office sales.

Wedbush analyst Michael Pachter said: “Disney learned this through the hard way.”

In addition to losing ticket sales to streaming subscribers, these big-budget movies are heavily pirated because they are available in high-quality versions. Pachter noted that the National Association of Theater Owners marked Marvel’s “Black Widow” as one of the most illegally downloaded works when it was released in July.

“Black Widow” currently ranks third in the global box office among Marvel Cinematic Universe movies, second only to “Captain America: The Avengers” in 2011 and “Invincible Hulk” in 2008.

Pachter pointed out that after the disappointing box office return of “Black Widow”, Disney promised to provide 45 days of exclusive theater window for the rest of its 2021 movie.

“For all creative content personnel, the most sensible way to act is to maximize their income by retaining the window,” he said.

Nevertheless, “Halloween Killing” is likely to profit at the box office because it is a horror film. This type of budget is usually smaller, which means it can more easily recover production and marketing costs with fewer ticket sales.

Still from Universal Pictures and Bloomhouse’s “Halloween Killing”.

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Especially Blumhouse, is known for turning a small budget into a huge box office income. It is the driving force behind the profitable and popular “supernatural activity” movies and the Oscar-winning “going out”.

The report budget for “Halloween” in 2018 is between US$10 million and US$15 million. It continues to earn more than 250 million U.S. dollars worldwide.

The production budget of “Halloween Killing” is close to 20 million U.S. dollars. According to Boxoffice.com, it is currently tracking $40-55 million openings. The studio reported on Friday that the movie earned $4.85 million in the box office during its preview on Thursday.

Of course, movies also have a marketing budget, which is usually calculated as about half of the movie production budget, and the studios and theater operators share the theater profits. Sill, despite the dual release of “Halloween Kills” on Peacock and the ongoing uncertainty due to the Covid-19 pandemic, it is still expected to bring profit to the studio.

“The follow-up tells us that we are ready for a very pleasant weekend,” said Orr of Universal Pictures.

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