In a telling sign of Hollywood’s evolving business model, Amazon’s massive $250 million Christmas action spectacle “Red One” has become the latest battleground in the streaming wars, raising questions about the future of big-budget filmmaking.
The Dwayne “The Rock” Johnson and Chris Evans starrer opened to a modest $32.1 million domestic box office, sparking intense debate about the viability of streaming giants’ theatrical strategies. Despite its underwhelming performance, Amazon executives maintain traditional metrics don’t measure the film’s success.
Box Office Reality Check
The numbers paint a sobering picture. With a global box office approaching $100 million and a production budget of $250 million, plus an estimated $100 million in marketing costs, “Red One” faces an uphill battle to profitability through theatrical release alone. The film’s A- CinemaScore from audiences starkly contrasts its 33% Rotten Tomatoes critic rating, highlighting the disconnect between viewer enjoyment and commercial success.
The Streaming Wars Evolution
“I think ‘Red One’ is the exception, not the rule, going forward,” says Eric Handler, media analyst at Roth Capital Partners. “You can’t use a $250 million movie as a loss leader to drive subscribers because you can’t justify the return.”
This marks a significant shift from the peak streaming era when tech giants like Amazon and Apple freely spent astronomical sums to attract talent and subscribers. The landscape has changed dramatically since Amazon greenlit “Red One” in 2021, during fierce bidding wars for star-studded packages.
New Math In Hollywood
Amazon MGM’s approach reveals a different calculation. Kevin Wilson, head of theatrical distribution, argues that covering marketing and distribution costs through theatrical release is sufficient, as the theatrical run serves as a massive marketing campaign for the streaming debut.
This strategy highlights how tech companies’ deep pockets have transformed Hollywood’s economics. With market caps in the trillions, Amazon and Apple can absorb losses that would devastate traditional studios. “If any other Hollywood studio had to take a $250 million write-down, it would hurt,” Handler notes. “Amazon is fortunate that it won’t be noticed.”
The Future Of Big-Budget Films
The industry is witnessing a shift in how success is measured. While traditional studios need films to earn roughly 2.5 times their budget to break even, streaming platforms operate under different rules. They’re increasingly focused on subscriber retention and engagement metrics, which are primarily hidden from public view.
This opacity extends to viewership data, with streaming services often releasing vague superlatives rather than concrete numbers. This lack of transparency covers up underperforming films while making it harder to assess true success.
Competition And Challenges
“Red One” faces steep competition from upcoming releases like Universal’s “Wicked Part One” and Paramount’s “Gladiator II.” The film’s future performance will test Amazon’s strategy of using theatrical releases as marketing vehicles for streaming content.
The Bottom Line
As Hollywood grapples with changing viewer habits and economic pressures, “Red One” represents the excesses of peak streaming and the industry’s uncertain future. While tech giants can afford such expensive experiments, the sustainability of this model remains questionable in an increasingly competitive marketplace.
The film’s ultimate success may not be measured in box office dollars but in Prime Video subscribers retained and merchandise sold. Whether this new math adds up to a sustainable business model will shape Hollywood’s approach to big-budget filmmaking in the future.
Table of Contents