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‘Argylle’ Crashes With C+ CinemaScore & $18M Opening: Can Apple Sustain This Reign Of $200M Productions? – Sunday Update

SUNDAY AM: While the theatrical marketplace is starving for big movies post-strike, Apple Original Films’ $200M pick-up of Matthew Vaughn’s Argylle isn’t cutting it with a $18M domestic/$35M global start, C+ CinemaScore, and 3 stars on Comscore/Screen Engine’s PostTrak.

At the end of the day, this multi-supporting actor and actress ensemble isn’t provoking people to drive in their cars to cinemas.

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Yeah, yeah, that’s about where tracking saw it. But we need to finally come clear and say it. Ready? Despite Apple being a $2.87 trillion company, and able to shell out for these $200M (or, in some cases, $150M-budgeted) movies like Napoleon and Killers of the Flower Moon — make no mistake, dollar for dollar on the motion picture P&L sheet, these are losses, and in some cases, they don’t have the ancillaries that other movies, do, ala foreign TV. There’s not even a theme park or a cruise ship to further exploit these movies.

In the cases of Napoleon and Killers of the Flower Moon, there’s a small transactional home entertainment window. Furthermore, if Apple isn’t going to get hurt on the 35% Rotten Tomatoes, critically derided Argylle, then Universal will with its distribution deal. Read on.

“How does Apple get away with not being dinged?” is what I’m often asked by several industry sources when it comes to the tech company playing in the fields of box office.

On one hand, there’s something to be thankful for on behalf of exhibition that the streamer is embracing wide theatrical. Exhibitors need movies like air, and in the case of Argylle stateside, it’s $9 million in the bank (when you factor circuits’ rental). Then again, the overall marketplace is at an estimated $63.4M this weekend for all titles, -22% from a year ago.

We certainly don’t want Apple to abandon theatrical. However, how long can this reign of $150M-$200M under-grossing movies continue for the streamer? That’s the question. Will Apple ultimately belt-tighten after this string of uber expensive movies? Who makes an R-rated $200M movie? Because at the end of the day, every corporation wants to profit.

And there’s some really lavish spending going on: for the upcoming Greg Berlanti- directed space race movie, the untitled Project Artemis, starring Channing Tatum and Scarlett Johansson. I understand Cape Canaveral was rebuilt for the $100M Apple pick-up. That’s quite a luxe spend, a feat up there with installing faux cornfields in Australia on a Superman movie.

“The difference between a motion picture studio and Apple is that we develop, and develop to make features perfect,” says one rival development executive about Apple, “We don’t just willy-nilly hand over creative reign and allow chaos to reign.”

The defense has been that these movies, i.e. Argylle, Killers of the Flower Moon, and Napoleon are brand plays for the service, trinkets to drive global subs to Apple TV+. One film finance source told me that despite these movies being textbook bombs, to Apple, they’re advertising costs. Witness the ten Oscar nominations and 200 accolades (per Apple boss Tim Cook) for Martin Scorsese’s Killers of the Flower Moon, and the anecdotal claim that the movie is “the most popular movie across streaming platforms” despite the fact that it hasn’t appeared in the Nielsen streaming rankings yet.

Joaquin Phoenix Napoleon
Napoleon really doesn’t want to hear anything about losses at the box office.

In the case of Napoleon, with an average production cost of $165M and a global gross of $219.3M, film finance sources tell me that the Ridley Scott-directed, 3x Oscar- nominated movie likely lost around $16M in its theatrical run off the global marketing spend alone, but made up for it in its limited transactional run. That’s just theatrical. However, the massive $165M loss hangs on Apple. It’s a similar scenario on Killers of the Flower Moon — A $20M global loss on the theatrical, made up for in minimal home entertainment, with the entire noose of the $200M cost hanging around Apple’s neck.

But wait, Anthony, didn’t you say the $23.2M domestic opening for Killers of the Flower Moon was a great start? Yeah, I did, and here’s the reason: During an actors strike, without any stars promoting, a 3-hour drama that opens to $23M is something on its own to commend. But at the end of the day, production cost is the problem.

Ditto for Napoleon: a historical period movie which sees 72% of its worldwide $219M box office is par for the course in pure numbers alone for that type of genre. For foreign exhibition, their share is a win. But the drops of blood are on the accounting ledger for Apple. Here we have Argylle, an action movie opening at a time post-strike, with actors promoting, on a weekend where the movie’s prolific co-star Dua Lipa is nominated at the Grammys — and the picture isn’t yielding amazing numbers that justify its production spend.

Are these movies spurring Apple consumers to buy Apple products? Because I think that the products were selling themselves just fine before this content spending came along. Cook boasted recently that Apple Services, the division that includes Apple TV+, is up 11% to $23 billion in the latest quarter, with Apple TV+ subscriptions over a billion.

Streamers such as Apple and Amazon who are playing in the theatrical space realize they need it to eventize their movies, and reportedly, more than profit, are looking at other diagnostics as benchmarks of achievement, i.e. subscriber churn on the streaming site, and how a movie translates into sales on the site (which is specific to Amazon). I was told that Amazon couldn’t determine the success of Easter weekend 2023 release Air until months after its $93.2M global box office. Talk about a lot of money spent on top of mounds of money: The Artists Equity/Skydance Sports/Mandalay title cost around $90M to make, before Amazon spent $120M to acquire it.

Until we see fully published reports on viewership data, can we assess the potency of any of these movies, whether they’re delivered straight to their respective OTT services or released theatrically before arriving on the service. Netflix, at least, publishes some sense of data, in conjunction with third-party Nielsen, so we can at least get a barometer of what’s working.

But to say that these big tech congloms like Apple and Amazon ($1.78 trillion) are Teflon to losses and can sustain exorbitant amounts of spending is just a flat-out lie. Hello, Amazon just laid off hundreds in its Prime Video and MGM divisions. Remember the Jason Ropell and Ted Hope administration in Amazon movies division? Their mandate was to make taste-making, awards-worthy fare, just like Apple’s (though at significantly smaller budgets), and they executed that m.o. with such 2x Oscar winners like Manchester by the Sea.

Then there was the $80M period movie The Aeronauts (some say that’s $40M production cost+marketing), starring Felicity Jones and Eddie Redmayne, which was made and intended for Imax, but got jettisoned to a truncated short theatrical window release and pivot to Prime Video. At the end of the day, it was decided that that the administration’s output wasn’t profitable or sticky enough for the brand. The point is: Don’t tell me tech companies don’t look at bottom lines.

Argylle Still
Argylle Still

In regards to Universal’s skin on Argylle, I hear it’s a distribution deal in the sense that they get around an 8% fee of the box office. Chances are, Uni isn’t going to collect that. I hear Universal is on the hook for 50% of this $80M marketing campaign (which has Vaughn’s heavy fingerprints on its creative), and that the studio collects back what it’s owed in marketing from the box office before it collects a distribution fee. Why did Universal get involved with Argylle? I understand that Uni Boss Donna Langley wanted to get into future business with Vaughn. All these Apple distribution deals work differently. In certain cases, some studios get a guaranteed distribution fee, even if the movie buckles at the B.O.

With Argylle, Vaughn arguably clocks the lowest CinemaScore of his career to date. By the way, financially, he’s alright: His Marv-financed Argylle, and then sold it to Apple for $200M. The filmmaker self-finances and then sells his movies, which has been his practice going back to The Kingsman movies at 20th Century Fox, that studio acquiring the first two films at $100M+ apiece.

More under the hood on Argylle: Mostly guy-leaning here at 52% to females 48%. Men over 25 at 40% were the majority who bought tickets and gave Argylle a 73% grade. Women over 25 at 38% followed and graded the PG-13 action movie at 78%. Diversity demos were 53% Caucasian, 20% Latino and Hispanic, 12% Black, and 10% Asian.

Imax and PLFs are repping 42% of Argylle‘s weekend, with the movie playing in the West, Mountain, South, and South Central. AMC Lincoln Square in NYC is the highest-grossing cinema in the nation through Saturday with $68K.

Perhaps, much like Netflix’s penchant for $200M event films which have zero downstream ancillaries, motion picture studios are just envious of Apple. Maybe this $200M conveyor belt for niche demo movies never stops.

As one industry financial analyst told me recently: “Apple market cap is $2.87 trillion. If the stock moves 0.007% or about 1.3 cents, that covers a $200M production.”

****

Fathom Event’s fourth season of The Chosen shot up from the No. 7 spot for the weekend yesterday with an estimated $3.5M opening to what’s now being projected at $6M in the No. 2 spot.

The chart is updated with Sunday figures.

1.) Argylle (App/Uni) 3,605 theaters, Fri $6.5M Sat $6.9M Sun $4.5M 3-day $18M/ Wk 1

2.) The Chosen (Fath) 2,248 theaters Fri $1.75M, Sat. $2.4M Sun $1.8M 3-day $6M/Total $7.4M/Wk 1

3.) The Beekeeper (AMZ MGM) 3,277 (-60) theaters, Fri $1.3M (-28%) Sat $2.4M Sun $1.4M 3-day $5.2M (-21%), Total $49.4M/Wk 4

4.) Wonka (WB) 2,901 (-113) theaters, Fri $1M (-24%) Sat $2.2M Sun $1.47M 3-day $4.76M (-16%), Total $201.1M/Wk 8

5.) Migration (Ill/Uni) 2,830 (-140) Fri $840K (-19%) Sat $2M Sun $1.2M 3-day $4.1M (-16%), Total $106.2M/ Wk 7

6.) Mean Girls (Par) 3,107 (-437) theaters, Fri $1M (-47%) Sat $1.8M Sun $1.1M 3-day $4M (-42%), Total $66.3M/Wk 4

7.) Anyone But You (Sony) 2,619 (-266) (-43) Fri $1M (-29%) Sat $1.5M Sun $915K 3-day $3.5M (-24%),Total $76.2M/Wk 7

8.) American Fiction (AMZ MGM) 1,902 (+200) theaters, $615K (-21%) Sat $1.08M Sun $598K 3-day $2.3M (-11%), Total $15M/Wk 8

9.) Poor Things (Sea) 1,950 (-350) Fri $592K (-30%) Sat $940K Sun $596K 3-day $2.1M (-28%)/Total $28.1M/Wk 9

10.) Aquaman and the Lost Kingdom (WB) 1,742 (-376) theaters, Fri $440K (-33%) Sat $955K Sun $620K 3-day $2M (-26%) /Total $120.7M/Wk 7

FRIDAY AM: After a few weeks without any studio wide releases, Apple Original Films’ Argylle via Universal is hoping to entice moviegoers back, but it won’t be in a big way. Thursday night’s previews for the Matthew Vaughn-directed PG-13 action movie made $1.7 million, which is below the $2.4M previews clocked by Amazon MGM’s The Beekeeper a few weeks ago. That movie posted a $16.5M opening, so any hope that the $200 million-budgeted Argylle will get to that $20M-plus that some exhibitors were seeing — I don’t think so.

Argylle was booked at 3,100 theaters last night and has all the cinema upcharges this weekend of PLF and Imax, etc. Reviewers at 34% on Rotten Tomatoes already are screaming “don’t go.” This despite the fact that the $200 million MARV-Cloudy production has an all-star cast of Henry Cavill, John Cena, Oscar winner Ariana DeBose, Grammy-winning pop superstar Dua Lipa, Emmy winner and Oscar nominee Bryan Cranston, Emmy winner Catherine O’Hara, Sofia Boutella and Marvel’s Samuel L. Jackson.

Meanwhile, Fathom Events’ Season 4 of The Chosen did an estimated $1.4M at 2,236 theaters; that’s for episodes 1-3. Episodes 4-6 hit on February 15, while episodes 7-8 debut in theaters February 29.

While Beekeeper was beaten by Paramount’s Mean Girls in their respective third weekends $6.9M to $6.6M, the Jason Statham movie ruled over the Plastics in their second weeks, $9.2M at 3,337 to $8.9M at 3,544. Beekeeper‘s domestic running total stands at $44.1M, Mean Girls at $62.3M.

Following Mean Girls, Warner Bros’ Wonka was third for the week with $7.1M at 3,014 theaters, and a running total of $196.3M. Man, it has to cross $200M this weekend.

Sony’s Anyone But You, booked at 2,885 theaters, ended its Week 6 with $6.4M and a running total of $72.7M.

Illumination/Universal’s Migration at 2,970 theaters ends Week 6 with $6M, and a $102M running stateside cume.

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