- Sony Pictures sold its Tom Hanks summer Blockbuster flick 'Greyound' to Apple for $70 million.
- The film will skip a theatrical debut and go straight to Apple+
- Sony has no expectations for this to be a model for future film releases.
Sony Corp’s (NYSE: SNE) entertainment and film unit Sony Pictures scored a $70 million payday by selling its Tom Hanks thriller to Apple Inc. (NASDAQ: AAPL). On Wednesday, Sony Pictures CEO Tony Vinciquerra explained the logic behind the deal.
Sony scores a profit
Hollywood A-lister Tom Hanks assumed the leading role in “Greyhound,” a war flick depicting the role of a commander of a Navy destroyer during the Battle of the Atlantic. The film was scheduled to hit the big screen in June but the COVID-19 pandemic made a theatrical debut this summer impossible.
Instead, Sony sold the rights to the film to Apple who will stream it on its platform Apple for $70 million for $70 million. Sony is believed to be walking away with a profit as the film’s budget was around $50 million.
Apple is making a push into joining the video streaming wars and here’s how you can Buy Apple stock.
Despite movie theaters starting to reopen across the world, it remains unclear how many people will be admitted to showings, Vinciquerra said on CNBC’s “The Exchange.” In addition, Sony’s potential Blockbuster hit will compete against a plethora of other potential Blockbusters which creates too many “tremendous unknowns” moving forward.
Instead, the studio took advantage of an opportunity to cash in on a deal with Apple as part of a process that isn’t expected to repeat often, the CEO said. Sony Pictures remains “completely committed” to providing guests a top-notch theatrical experience as it remains after all its “primary business.”
“But this opportunity arose, and we took it,” he said.
When asked if the global pandemic will result in a shift in strategy in how Sony Pictures releases a film, the CEO answered with a hard no. The company has no plans to either simultaneously release movies in both the theaters and through online streaming platforms simultaneously.
“We think the theatrical release is vitally important to the film industry and to generating the most revenue and profit,” Vinciquerra said. “We have not seen models where that kind of release schedule will benefit the profitability and efficacy of major productions.”
Demand for movies
Theaters will rise to the challenge of providing a safe environment for guests but demand will need to catch up. Consumers currently lack the “energy and enthusiasm” to go back to the theaters but this will be temporary.
“People are anxious to get back to their normal lives and we do think that theaters will return in a very strong way — obviously with some restrictions,” he said.