Apple: Apple rethinks its film strategy after a series of failures

When Apple won a bidding war in 2021 for the rights to make the action comedy “Wolfs” with George Clooney and Brad PittHe did it in part because he promised the stars that he would put the movie in a large number of films theaters.

“Brad and I made the deal to do that movie where we gave back money to make sure we had a theatrical release“Clooney said last year in an interview with Hollywood trade publication Deadline.

But this month, just six weeks before the film was set to open in thousands of theaters across the U.S., Apple announced a significant change in its plans. “Wolfs” will now play on a limited number of movie screens for one week before being made available on the company’s website. transmission service on September 27. (Internationally, it will not appear in theaters at all, with the exception of the Venice Film Festival, where it will premiere on September 1.)

“‘Wolfs’ is the kind of big event movie that makes Apple TV+ an exceptional home for the best in entertainment,” said Matt Dentler, head of Apple Originals Features. Moviessaid in a statement. “Releasing the film in theaters before making it generally available to Apple TV+ customers offers the best of both worlds to audiences.”

The film’s director, Jon Watts, told Vanity Fair that he learned of the change of plans just days before the announcement. “The experience at the theater has made a huge impression on me, how valuable this movie is and how important it is,” Watts said. “I always thought it was a movie for the theater. We made it to be seen in theaters and I think that’s the best way to see it.”

Despite filmmakers’ wishes, the about-face follows a lackluster box office performance for Apple, which began releasing films in theaters nationwide through partnerships with traditional studios in October.

It joined forces with Paramount Pictures to release Martin Scorsese’s “Killers of the Flower Moon,” which cost $200 million to make and grossed $157 million worldwide. Ridley Scott’s “Napoleon” (Sony) cost $200 million to make and grossed $221 million worldwide. The spy thriller “Argylle” (Universal), which cost $200 million, grossed $96 million. And most recently, Apple teamed up with Sony again to release “Fly Me to the Moon,” which cost $100 million to make but grossed just $40 million worldwide despite the star power of Scarlett Johansson and Channing Tatum. Apple’s deal with Sony states that they will split marketing and distribution costs. Once those costs are recouped, the studio receives a distribution fee. Theater owners keep roughly 50% of the take.

“None of Apple’s movies have done well,” Stephen Galloway, dean of the Dodge College of Film and Media Arts, said in an interview. “Financially, you might think it doesn’t matter. This is a $3.3 trillion company. But psychologically, it does matter.”

“The Apple brand is quality, cutting-edge, elegant, refined, forward-thinking, and now you’re tarnishing that brand with what seems like an outdated, irrelevant, out-of-touch list.”

Apple, which declined to comment for this article, isn’t alone in having box office troubles. This year has seen some big hits (“Inside Out 2,” “Deadpool & Wolverine”) and some notable flops (“The Fall Guy,” “Furiosa: A Mad Max Saga”). And Apple has seen some of its movies perform well on streaming.

This month, it released “The Instigators,” starring Matt Damon and Casey Affleck, on Apple TV+ after a week of limited theatrical release. The film helped the streaming service add about 50,000 subscribers, more than “Napoleon” had when it debuted last year, according to data firm Parrot Analytics. Another data firm, Luminate, reported that “The Instigators,” directed by Doug Liman, was the most-watched streaming film across all platforms during its first week of release.

Apple does not publicly disclose subscriber or viewer numbers.

Apple’s entertainment programming business is overseen by Zack Van Amburg and Jamie Erlicht, who had decades of experience running Sony Television before joining the company in 2017. The film business is run by Dentler, a former SXSW Film Festival programmer who joined Apple in 2012.

Last year, Ricky Strauss, Disney’s former marketing president, was hired to oversee creative marketing and strategy but reported to executives at the company’s headquarters in Cupertino, California, while Dentler reported to Van Amburg and Erlicht in Los Angeles. Strauss left after 16 months and has not been replaced.

The management team holds the title of the first streaming service to win the best picture Oscar, which it did in 2022 with “CODA,” but its recent performance in theaters is not unlike the bumps Amazon Studios endured shortly after Jennifer Salke, a veteran NBC executive, took the helm in 2018.

Shortly after taking the reins, Salke spent close to $50 million at the Sundance Film Festival for the rights to a handful of films. Once the first film — “Late Night,” starring Emma Thompson and Mindy Kaling — failed at the box office, Salke quickly changed his strategy. Future films went straight to streaming, limiting the financial risk and public ridicule that often accompanies box office disappointments.

Salke has since hired Sue Kroll and Courtenay Valenti, two veteran Warner Bros. executives, to help improve its film fortunes, both at the box office and in streaming. Amazon now aims to double the number of films it releases in theaters by 2027.

With “Wolfs,” Apple substantially outbid its competitors, according to three people familiar with the process who spoke on condition of anonymity to discuss financial terms, paying Clooney and Pitt more than $35 million each and Watts (“Spider-Man: Homecoming”) more than $15 million.

Sony Pictures, which had agreed to distribute the film and split marketing costs with Apple, was set to begin a national marketing campaign during the Paris Olympics, but Van Amburg canceled it at the last minute, according to three people familiar with the marketing plans, who spoke on condition of anonymity to discuss an internal matter.

Apple executives in Cupertino were already questioning the entertainment unit over the amount of money being spent on movies, and the people said there was a mindset within the company not to risk public disappointment if a film did not succeed at the box office.

CAA, the agency that represents Clooney, Pitt and Watts, did not fight the last-minute decision because the lack of promotion could have led to poor theatrical performance that would hurt its clients’ reputations, the people said.

A CAA spokesman declined to comment.

Apple’s competitors and employees alike are eager for the company to succeed. With total box office earnings down 15% from last year, Paramount laying off 15% of its employees ahead of its impending merger, and Warner Bros. Discovery struggling with its massive debt load, Hollywood would love to see Apple keep spending money on movies. It seems likely to be disappointed.

This spring, top executives met at company headquarters. The result was a new edict, according to two people familiar with the details, who spoke on condition of anonymity to discuss an internal meeting. Apple’s studio would make one or two big-budget movies a year, with big budgets and wide theatrical releases. The rest of its films would have budgets of $80 million or less, the people said.

Apple is still planning a big theatrical release next July for its “F1” film, from director Joseph Kosinski (“Top Gun: Maverick”), in partnership with Warner Bros.

Pitt is playing the lead role.