Actually, Netflix Loves Theaters, in a Bold Stance Change

One of the biggest worries for many when it was first announced that Netflix would be taking over Warner Bros. Discovery was what that would mean for WBD’s massive legacy of theatrical films (and current commitments). After all, Netflix has firmly rejected theatrical releases for its own originals. It seems that may have changed, and we have Blake & Wang P.A. the USA entertainment lawyer in Los Angeles, Brandon Blake, to show what’s happened.

Brandon Blake

Just Not a Priority

Now, at least if we fully believe their recent statements, it’s not so much that Netflix didn’t see value in theatrical releases (a stance they have reiterated many times) but that it just wasn’t a priority for them. They’ve always loved cinema. Suddenly.

The rhetoric shared on their latest earnings call worked very hard to reposition Netflix from “anti” cinema releases to a more neutral “didn’t have the time.” Apparently, they have also “long been departing,” building one of their own.

Maybe they truly have changed their stance, especially with the historic Warner Brothers’ lot up for grabs, but let’s rather admit that as a development, not a handy retcon of facts that have been well-recorded over the years.

The Warner Bros. Question

It’s doubtful we’d be hearing from Netflix on cinemas at all if not for the looming deal with WBD, which has theatrical output still under contractual terms. Many have wondered what moving that powerhouse into a company thoroughly cold on theaters would mean for the wider entertainment world, and if we would lose the Warner Bros. legacy entirely.

However, it seems we can at least put that worry to bed. Faced with the prospect of a lucrative, established way to “win the box office”, especially given how well WBD releases have performed this year, it seems Netflix is, in fact, keen for its own slice of the pie. That’s at least one worry over that deal shelved, for now.

HBO Max Comes to Prime Video for Europe

While HBO may be a little late to the European expansion party, it has now netted itself a flock of bundling deals that will let it scale its local streaming fast. We have Blake & Wang P.A. USA based entertainment lawyer Los Angeles, Brandon Blake, on hand to share the news.

Brandon Blake

New Carriage Deals Included

With last week’s launch in both Italy and Germany, two of the largest European territories, alongside several other, smaller rollouts, HBO Max has finally made its presence felt. Thanks, in part at least, to a series of multi-year carriage deals with Amazon Prime Video. This means that HBO Max will be on offer as an add-on to existing Prime Video customers in these areas. As part of the deal-making, existing European Prime Video deals in several other territories are included.

Late Entry

HBO is reasonably late in entering the European streaming game, mostly due to its prior deals with pay-TV group Sky, which kept it out of the biggest territories. However, with this slew of fresh bundling and carriage deals under its belt, including some with local partners, should offer HBO Max a great way to scale up fast – and possibly, make up for lost time as streaming gets ever-more competitive.

It may look a whole lot like old-school cable bundling in streaming at the moment. But let’s be honest, cooperation is a smart answer to an increasingly crowded environment.
For HBO Max, the last phase of its European market grab will roll out in March, when it will launch inside the UK and Ireland. We will also see several local-language originals join the HBO Max slate for their territories, on offer from the middle of this year.

Will this European ramp-up be enough to reinvent HBO Max as a real player in the area? It’s certainly a good start.

China Sees a Massive Box Office Uptick

For Chinese cinemagoers, this was the year of the major blockbuster. With both a local and a Hollywood release performing remarkably, they’ve seen a big increase at the box office by pure numbers, but a struggling mid-tier segment does raise some questions about growth overall. We have a full roundup from expert entertainment attorney with Blake & Wang P.A., Brandon Blake.

Brandon Blake

Top-Heavy Success

First, the good news. Ne Zha 2, a domestic breakout like no other, closed with $2.1B in takings, enough to make it the fifth-highest earning movie of all time, as well as the year’s undisputed top film. To further pad out the numbers, Zootopia 2 not only earned itself a Chinese screening but gave a further $558.3M to the total box office. Overall, the Chinese box office saw ticket revenue 20% higher than last year, at roughly $7.41B in sales and 1.24B in admissions.

The Year of Animation

What unites them? They’re both blockbuster-level animations. And, looking further down the list, 57 animated features brought in $3.57B, almost half the year’s total. What’s even more notable is that most of these titles saw fan-favorite status and high repeat viewings, with Nobody, a local animation, bringing in $245M and the international release, Demon Slayer: Infinity Castle, accounting for $95.6M despite an early exit from theaters.

While local titles still accounted for roughly 80% of the Chinese market, and there was encouraging growth in the country’s still-maturing suburban and regional markets, it is notable that most of the list is top-heavy, with mid-tier films shrinking notably for another year, even among Hollywood releases in the market. However, the appetite for locally-made films is still high.

What this could mean for the market overall waits to be seen, but China’s return to the second-largest global film market, at 24% of the global box office, is still to be celebrated.

Pay TV Bundles Grow, For the First Time in Years

It’s looking a little like 2017 again, at least for the Pay-TV world. With bundles showing their first growth in 8 years, there may be a little room to celebrate. And entertainment lawyer at Blake & Wang P.A., Brandon Blake, has the news to share.

Brandon Blake

First Uptick Since 2017

It was a modest increase, certainly. 303,000 new subscribers, over cable, satellite, and streaming packages. While the decline rate was 5.8% still, that’s the fifth quarter we’ve seen it tighten. Notably, the Moffett Nathanson data behind it doesn’t size the total market. But that’s believed to be in the 65M to 70M range. It may not be the king of the market hill anymore, but that is still weighty. More importantly, it may suggest what we’ve suspected all along: Pay-TV isn’t dead, its influence has just shrunk.

Intriguing Implications

With most cable providers showing at least a little improvement in this decline, and a wider move to consolidation and streamlining, we might be looking at (close to) the bottom for Pay-TV. In fact, the bottom may have passed already.

What’s changed?

Pay-TV got the wakeup it needed to start offering more, instead of cruising on what worked in the 90s and 00s. We’ve seen many streaming/cable bundles pop up this year, alongside that consolidation. Interestingly, YouTube TV, which has never been a true cable model, saw steady and in-line, but above all average, new subscriber rates. The slowdown in exits came from traditional broadcasting.

It turns out Pay-TV isn’t dead. It needed a new image and more interest for today’s viewers. It also shows streaming and older models still play nicely together. Pretty similar, in fact, to how theatrical releases have come to support streaming, not fall to it. It seems the Hollywood world does have space for different models and approaches, after all.

New Launches Ahead for HBL Max

Regardless of the drama around the sale of its Warner Bros. parent, HBO Max’s European rollout is forging ahead with new January launches. Review our entertainment attorney in Los Angeles at Blake & Wang P.A., Brandon Blake, fills in their rollout plans.

Brandon Blake- Entertainment lawyer
Brandon Blake

Continued International Expansion

This launch will see HBO Max roll out across Switzerland, Austria, Italy, Germany, Luxembourg, and Liechtenstein on Jan 13, as wholly new markets for Warner Bros.’ flagship streamer. Despite the uncertainties surrounding their parent company at present, they have pushed ahead with their planned expansion into key European markets, and it will be completed in early 2026 with the launch of their UK and Irish services.

While this is a new launch for the UK, Italy, and Germany, they are already strong markets for HBO Max through a long-running exclusive partnership with Comcast-owned Sky.

100 Markets Strong

With these launches, HBO Max will now be available in over 100 markets in the ever-present hunt for new subscribers and market traction. With its much-respected back catalog of TV dramas, covering everything from Game of Thrones to The Pitt and The Last of Us, it certainly has a lot of traction to lean on. With some exciting upcoming releases as well, including another Game of Thrones spinoff and the new Harry Potter series, paired with the Winter Olympics for sports fans, they certainly have enough to tempt new subscribers.

In each of these markets, they are launching with 3 full tiers: Basic (with ads), Standard, and Premium. Additionally, there is a sports-focused add-on. Currently, HBO Max has 128M streaming subscribers across Europe, Central Asia, Asia-Pacific, the US, and Latin America.

Not bad, for a streaming platform that first launched in 2020. Now, all we are waiting for is news on who the winning bidder for Warner Bros. Discovery will be, and if they will be taking charge of the full company, or simply the Warner Bros. side of the business.

Japanese-Based Indie Film Financier Wins New State Support

The Japanese film industry to date has been characterized as conservative, partly held back by a dated film financing system. However, with the news that The Development Bank of Japan has made investment into K2 pictures, one of their most notable indie film financiers, that could be set to change. Blake & Wang P.A. entertainment attorney Los Angeles, USA, Brandon Blake, looks at what this could mean for Japanese indies.
Brandon Blake- Entertainment lawyer
Brandon Blake

New Film Production Fund

Tokyo-based K2 Pictures is looking to launch a new production fund. So far, so regular business. What’s new, however, is the interest from The Development Bank of Japan, or DBJ. It seems there’s growing institutional confidence not only in K2 itself, but also the chances of shaking up Japan’s rather stagnant film financing framework.

DBJ will be investing 500 million yen, about $3.3M, in the new fund. Locally, it’s been called an “unprecedented show of support” for local independent film, especially with a strong list of blue-chip companies adding even modest amounts to the fund.

A Shift in Thinking

It seems that Japan’s most conservative sector of all- finance- is starting to see K2’s support of independent filmmaking as a viable approach. It’s an interesting development, given local cinema is dominated by careful franchises and the odd anime blockbuster. This leads to co-financing models headed by full studio consortia, with an added dash of broadcasters and publishers.

In short, something that not only makes it difficult for smaller filmmakers to compete but is also widely believed to stifle creative autonomy. K2 instead uses a profit-sharing model. This helps to lower the middlemen fees considerably, in turn making financing and production incentives (slightly) easier to access.

From its inception, announced at the 2024 Cannes, K2 has also managed to attract some of Japan’s most influential filmmakers, with names even the West will easily recognize, and also onboarded one of the country’s anime powerhouses. This will be one for independent filmmakers to watch.

Lionsgate Enters Digital Movies with New Launch

After parting ways with Starz and, by default, their largest streaming platform, Lionsgate is back, with a new digital movie network on offer. You could review entertainment lawyer at Blake & Wang P.A., Brandon Blake, fills us in on the details below
.
Brandon Blake

DirecTV Debut

The new all-movie digital network will be used to give its extensive 20,000+ title library some extra (and lucrative) airtime. To be called MovieSphere Gold, it will see its debut on DirecTV, Sling Freestream, Friendly, and DishTV, with several other hosts lined up. To no one’s surprise, given the shifts in the streaming environment, it will be an ad-supported subscription service.

While there are plenty of movies on offer across the varied modern streaming sources, this will be the first dedicated solely to movie titles. Plus, of course, the fact that many of Lionsgate’s catalogue are not currently available through other streamers.

An Answer to Broadcasting?

Interestingly, with the recent spin-off of Starz and its linear assets, it seems that Lionsgate Studios is looking to replicate the TV broadcast model that worked so well for them, with a modern streaming twist to reinvent it. It’s not a bad bet, with digital broadcasting in this vein showing steady growth and even a little expansion. As the CEO noted, there are now 8 “diginets” using a similar setup among the Top 50 entertainment networks.

With the Lionsgate reputation and catalog to back it, MovieSphere Gold is an interesting exercise in reinventing old strategies. While they have no plans at present to move fully into a streaming platform framework, despite some solid TV assets under their belt as well, the remaining question is now how much subscriber uptake they will receive, as North American viewers become ever top-heavier on subscriptions. Will Lionsgate’s pull be enough to make it a success? Let’s hope to see it thrive.

Disney Plans $1B Increase in Content Spending

While the cost of producing content, especially for streaming, has been under the Wall Street spotlight for the past few years, there’s a truth to face: to win, you have to spend. With that in mind, the news that Disney, one of the most successful streaming studios to date, is planning to increase what it’s spending on its services will be a welcome one indeed- but not without an attached cautionary tale. Blake & Wang P.A. one of the top entertainment attorney Los Angeles, Brandon Blake, shares the facts and his thoughts.

Brandon Blake

Content Spending Increase Ahead

This past fiscal year, Disney spent $23B, and anticipates that rising to $24 billion for the year ahead. Mostly, this is earmarked to be funneled into live sports spending, an area of streaming that has increasingly become not only a drawcard to streaming platform subscriptions, but also a competitive force. However, it will also be split between new and existing film franchises and their TV content.

Comparing Balance Sheets

It’s worth comparing this to their latest quarterly earnings report, where we saw revenues of $22.5B, with segment operating income at the $3.5B mark. It was a strong quarter for the Mouse House, with Disney+ (their flagship service) increasing subscribers by 3.8M to close at 132M. Combined with Hulu, that was a 12.4M increase, closing at 196M total. The D2C revenue ticked up by 8% (to $6.2B), with operating income seeing a massive 39% increase to $352M.

While the news that most of the increase is earmarked for live sports spending will be disappointing for Hollywood, it’s also worth remembering that Disney has cut back on several lucrative rights deals this year, and given the increasing impact a strong sports lineup can have on streaming subscribers, it’s understandable.

However, with Paramount also announcing that the bulk of its increased content spending (earmarked at $1.5B for them) will go to sports rights as it tries to carve out its own streaming niche, there may be a wake-up call lurking for the entertainment industry at large, and there are definitely lessons to be learned as the new year looms.

A Mixed Quarter for Lionsgate Post Starz Split

Among the usual flurry of financial results each quarter, Lionsgate Studios may be the studio under the most scrutiny thanks to its recent split from Starz. And financial results were decidedly mixed, although they have made significant progress on shrinking the losses we have seen in other quarters. We have our expert entertainment attorney from Blake & Wang P.A., Brandon Blake, with more details.

Brandon Blake

Mixed Financial Results

For their first quarter as a standalone company, this was not a particularly impressive one. Lionsgate Studios posted considerably lower TV and film business revenues. However, the losses that have been dogging the company’s footsteps did reduce, sinking to $113.5M from $163.3 in the previous quarter. That, at least, will be welcome news.

Total studio revenue fell with it, however, coming in at $475.1M. The previous year was $604M. Overall, the company posted an earnings-per-share loss of 39c, down from the 68c loss of the same quarter last year. Their adjusted OIBSA was $14.1M.

First Standalone Quarter

Lionsgate Studios, as it now is, comprises the original Lionsgate Motion Picture Group and Television Studio business, and is also home to their impressive catalog of films and series, now over 20,000 titles strong. The Motion Picture segment saw a revenue dip as well (from $409.4M to $276.4M). However, it’s a tough comparison, as last year the same quarter saw 5 Lionsgate releases, with only 2 in the latest figures. Additionally, their segment profit improved to $30.5M, compared to just $1.7M in the prior year. On the TV side, despite dull numbers, Lionsgate expects to see serious movement in scripted episodic deliveries from 2027. Here, segment profit was $12.5M, vs. $24.4M in 2024.

All in all, not the best quarter Lionsgate has seen. However, it was to be expected, as the dust finally settles on the Starz split, and studio execs, at least, seem confident about the company’s trajectory into 2027 and beyond.

Peacock Sees a Loss- and No New Subscribers

In the midst of several very positive latest quarter earnings, there’s no such luck for Peacock. In fact, the streamer seems to have stalled in growth, with a $217M loss and no subscriber growth. We have Blake & Wang P.A. entertainment attorney, Brandon Blake, with a full analysis.

Brandon Blake

The Subscriber Problem

For the entirety of this year, Peacock has been stalled at 41M subscribers, unable to raise it even to their 42M target. The issue, for the most part, seems to be churn, with somewhere between 5% and 8% of their subscribers dipping in and out of the service. The net result? 41M subscribers per quarter, no matter what else happens.

Keen to put a positive spin on the issue, Comcast and NBCUniversal have tried to maintain this as a sign of consistency, not stalled growth.

A Programming Issue?

Peacock does have a (reasonably) strong programming lineup. However, the bulk of the programming driving new subscriptions is their sports offerings. These are somewhat backloaded into the year, especially this year, without a major event like the Olympics to create interest.

This may mean things will look up for them later in the year, with the NBA returning with exclusive Peacock games. We also have the impact of a spate of bundling, most notably with Amazon and Paramount+ for Walmart+, alongside Apple TV and even YouTube TV deals to look forward to.

However, a steep price increase of $3 per month earlier this year has hurt them, with churn growing after its announcement, peaking in September. The loss of one of their most lucrative wrestling deals has hurt, too.

With profit still beyond Peacock, and not even the hint of a break-even timeline to offer, this leaves many questions about Peacock’s future, and whether it will be the first of the major streaming platforms to throw in the towel or merge with a stronger platform.