The Lawsuit That Could Define The Future Of The Film Industry

Last year new films were released to the public for home viewing. In fact, enough were released that I personally watched 160 of them last year as they did so, and I didn’t even attempt to watch every single one that had a wide release. That seems like a very useless fact to point out until you remember a pandemic shutdown the film industry last year gave us the worst modern box office the states have ever seen, and an Academy Awards season dominated by more smaller films than usual. When you take that into account, it’s kind of miraculous that movies were still able to come out to the public, particularly given how unprepared the industry was for the pandemic.

Studios and theatre owners found themselves in a titanic battle amongst themselves for how they could continue to release new product in an industry that is constantly producing it even as their core customers were shut in their homes binging streaming shows. With most theatres closed either because of low attendance or government policy, and completed blockbuster money-makers just sitting in a vault somewhere ready to be unleashed to the public,  the major studios started to realize that they could use streaming services to their advantage. Warner Brothers took the unprecedented step of releasing their movies for the first thirty-one days on HBO Max even as they came out to theatres. Disney meanwhile came to the conclusion they could do the same with some of their releases through Disney Plus, though they charged a thirty dollar fee and the timeframe extended past thirty-one days.

On one hand this was an extension of an already accelerating trend with movie-goers watching streaming exclusives just as much as they were heading to the local theatre to watch the latest MCU flick. Not to mention that even in the awards side of things the film industry has accepted streaming distributors competing for some of the most prestigious prizes in film with Netflix seemingly getting closer and closer each year to having a Best Picture winner, and Apple now gunning to make their own play and partnering with arthouse studio A24 with their Apple TV Plus service. On top of this, studios have begun to shrink their theatrical windows to as short as forty-five days for some and films hitting physical home media are now three to four month waits instead of the half a year plus window it used to be. For the casual movie fan they seem to be in an almost utopia of movie content these days with various streaming services now offering exclusive movies that range from genre escapism to award caliber films or entire libraries of a specific studio’s archives. Now add this mix of actual theatre released content coming out either on the same day or just a couple months later to these streamers, and it really is getting harder for some to justify a trip to the theatre when they could just relax at home for much less.

But while the casual movie goer has been enjoying the almost endless amount of content, the industry’s evolution hasn’t been welcomed by everyone involved. In the grander picture, we have an obvious trend developing regarding non-franchise or spinoff films struggling at the box office, and that has accelerated to a point that my previous optimistic feeling things would sort themselves out has vanished. The same day streaming experiment from these studios has only confirmed that crowds will show up big for known properties at the box office while smaller films continue to get less attention, no matter how well reviewed they may be. This means streaming might arguably be the best path for original films to catch an audience more quickly as Netflix or even others like Amazon have shown they’ve been able to do, but that has only made the box office dominating franchise blockbusters become even more important to the industry…and its stars.

These days practically every major star, even some award recognized actors and actresses, have partaken in franchise films, whether it be the massive roster of the MCU, the Fast and the Furious franchise, hit horror sequels, or even some of the modern Godzilla and King Kong films. With those big franchise movies, studios can potentially make billions, and royalties and back-end bonuses are promised to stars for those films’ successes. That drives major stars to continue to come on board to such films and studios to make up for their smaller films struggling by banking money with their bigger ones. An actor or actress may get to play a role that brings them critical acclaim in a smaller budget movie, but they can make significant paper if they’re in a billion dollar grossing film thanks to those bonuses. The stars are happy to make money, the studio is happy to make money, and the average movie goer enjoys mindless escapism entertainment.

Enter the current streaming revolution. Suddenly films that could have made even more at the box office are available at home through streaming. It’s uncharted territory that allows studios to makeup for whatever audiences they could have left sitting at home thanks to the pandemic, but much less money for the actor or actress who is poised to get bonuses. And many of these talents who were looking forward to making such money off these films went to work on these projects fully expecting they were going to be major theatrical exclusives, only to be told (sometimes last second) that they would be available on streaming or have much smaller theatrical windows than anticipated. What is utopia for the average movie goer is an issue for the talent dealing with the studio.

Stories have ranged from Christopher Nolan throwing a fit at long time partner Warner Brothers, That same studio having to make new deals with talent and even sister studios regarding upcoming releases to adjust to the streaming availability, John Krasinski reportedly being frustrated with the smaller window for his newest movie, Pixar being furious with Disney regarding their newest film becoming a straight-to-streamer, and now the massive headache for Disney of one of their biggest stars — and perhaps another — wanting to sue for lost wages due to their films not being exclusive to theatres.

As it goes, Disney decided to release Black Widow and Cruella to their streaming service at the same time as they released in theatres, for a surcharge. Even with the extra home media availability, both films did rather well at the box office with the former having a crazy good first weekend and the latter having impressive legs. However, both films fared decently on Disney Plus as well, money that could potentially have been at the box office instead and, industry analysts believe, cost the movies, and thus their leading ladies in each, even more money. Thus in a stunning move, Black Widow star Scarlet Johansson, with whom Disney has had a great relationship in the past, has sued the company, claiming to have evidence that the studio promised a theatrical exclusive run and yanked the rug from under her last second. Keep in mind other studios, even though they, too, have talent that is begging audiences to return to theatres, at the very least had contractual concerns addressed before moving forward. Disney, however, seems to be making these decisions without much forethought as to how their talent might react, and they seemed so surprised by this move that they responded to the lawsuit with a biting press release that made it very clear they were ready to turn their back on her no matter how much money she made for them. And to make things worse for the mouse, Emma Stone from Cruella is now reportedly weighing the same option, potentially hurting a relationship that was to progress into a sequel to the film and a potential awards campaign at the end of the year.

On paper this may seem to many casual watchers as just a bunch of rich people arguing over who can have more money – and quite frankly I think there’s more truth to that than some film journalists might want to admit which is why I personally am sort of neutral on the whole matter. Whoever wins or loses this lawsuit won’t be that financially set back. These actresses are among the most sought of the day, and Disney could lose the entire film division and still have a billion plus dollar tourism industry to make money with. But when you think about the situation a little more you realize this could be our generation’s breaking of the studio system moment. This has the potential to create a wave of events one way or another that will shape how talent is paid in the era of streaming, how we watch new movie content, and maybe even how we pay for it, and not to mention perhaps create bad blood among some studios with the very people who help them make money.

Now I should mention I am no legal expert but I think there is some common sense thought here on how things might play out. Disney could win this case if they reveal evidence of such things like an “Act of God” clause or perhaps even convince a judge or jury that streaming revenue can be separated from theatrical revenue. That in itself would create a precedent that sets up the studios to see streaming as potentially a bigger platform to gross money with than the box office, and it could set up talent to really need major sway to get their films an exclusive theatrical run. It could also in a way be the death of “the movie star” as we know it, as major sought out talent could suddenly be pushed to the side by streaming giants who won’t have to pay as much now for said talent.

However, the actresses in question claim to have evidence of Disney promising a theatrical run and thus being in breach of contract. If that is true, a judge or jury could decide that Disney owns them money and would set up a potential downstream of actors and actresses looking to get every penny of their promised bonuses and royalty checks. That in turn could lead to future major streaming content getting more expensive for studios to produce and thus could lead to either tighter budgets, less obsession with trying to lure major stars with bonuses, or even higher prices for streaming services. It could also drive a big push by major studios to return to having more exclusive theatrical runs, fighting a tough battle as more and more audiences shift to the home media consumption they helped drive.

On another subject this situation which seems to be becoming bad blood between Disney and their talent could be a hole they dug themselves in that they only make bigger, depending on who they piss off. MCU head Kevin Feige reportedly is on Johansson’s side and he is arguably responsible right now for helping Disney OWN the box office these days thanks to the MCU’s success. Industry insiders are reporting many industry talent are behind her as well, which could lead to some backlash against Disney in getting major stars to join their new projects and perhaps even see some protest votes against them at the next Oscars when it comes to certain categories they’ve been known to compete hard for. Disney has been enjoying a prolonged period of success the last decade and this could be a situation that becomes dynamite that enters them in one of their down periods – though they will survive if they do.

There’s also the possibility this gets settled out of court and becomes something that comes and goes, but I have my doubts there won’t be some kind of film industry ramification from this. We are now in an era where I can watch a brand new film that would have otherwise been released to theatres at home without the immoral and unethical action of watching a bootleg via a streaming service pushed by a major film studio. We are now in an era where a movie I watch day one on Netflix can go on and compete for Oscars. We are now in an era where the leading men and women in film of our day can show up on our phones in a movie that came out that very day. The industry has been evolving to having content everywhere and studios are going to have to figure out how that changes their dynamics with talent, the same talent that seems to be fighting the real change happening and at the same time a customer base that is becoming more and more predisposed to staying at home or watching new content from their mobile devices.

I’m not sure who will win this lawsuit. I just know it could end up being one that changes the film industry in a way that might be better or worse for the talent involved, but could even change how we watch and pay for new movies. Think this fight between rich folks for money won’t affect you? Wait until your local theatres close at an even more rapid pace or you find yourself having to choose one streamer over another because you’re paying double what you were. This could affect everyone, top on down. From a movie producer figuring out what movie to green light to the everyday joe deciding what streaming service bill to pay. This is one Hollywood celebrity drama you might want to keep an eye on.