Skip to main content

The battle to build Hollywood’s future is being waged directly on the Toronto International Film Festival’s doorstep, writes Barry Hertz

Illustration by kathleen fu

This Saturday evening, the Toronto International Film Festival will host an overlapping series of high-wattage world premieres that organizers hope will reaffirm TIFF’s status as the biggest, glitziest, and perhaps most tweeted-about cinematic spectacle in the world.

Over the course of just five hours and approximately four square downtown city blocks, TIFF will debut new movies starring Jennifer Lawrence (Causeway), Daniel Craig (Glass Onion: A Knives Out Mystery), Anya Taylor-Joy (The Menu), Michelle Williams and Seth Rogen (who lead Steven Spielberg’s very first TIFF film, The Fabelmans), plus a wealth of highly anticipated international productions including The King’s Horseman and the buzzy Sidney Poitier documentary, Sidney.

“I always believed that, no matter what happened between pandemic restrictions and new audience behaviour, there is still something irreplaceable when it comes to watching movies in a theatre,” says TIFF CEO Cameron Bailey, who helped lead the festival through two supremely strange hybrid editions.

But there is an industry-shaking hitch to TIFF’s comeback: Half of the movies noted above will eventually be seen by most audiences not in theatres, but on streaming platforms. Two and a half years after the streaming war began in earnest – aided, but not entirely caused, by a pandemic that shuttered theatres for longer than anyone could have anticipated – the fight for the future of Hollywood is being played out directly on TIFF’s doorstep. And anyone who thinks that they know how the third act shakes out is in for a twist ending.

Tensions between Cineplex and streamers like Netflix spill into TIFF’s comeback year

One of TIFF’s biggest programming coups this year was securing the debut of Glass Onion, the very first film that organizers announced for their 2022 lineup. The sequel’s premiere offers a nice line of continuity for the festival, given that director Rian Johnson’s first Knives Out movie debuted at TIFF in 2019 to rave reviews. But its inclusion in Toronto also symbolizes the crux of the streaming war.

The first Knives Out was a traditional theatrical release, distributed by Lionsgate and going on to earn a strong US$311-million at the global box office. Two years later, Netflix swooped in and paid a whopping US$450-million for the rights to two Knives Out sequels (or roughly one-ninth of the price that Disney forked over for the entirety of Lucasfilm). Along with such high-priced, high-profile, high-everything films as Don’t Look Up, Red Notice, The Adam Project and The Gray Man – plus a hundred other movies that you’ve never, ever heard about – Knives Out highlighted Netflix’s deep-seated desire to not only disrupt the way Hollywood does business but displace it.

Daniel Craig returns as sleuth Benoit Blanc in Glass Onion: A Knives Out Mystery.Courtesy of TIFF

Sure, Netflix might release their films in theatres for a week or two before making them available to stream – but these are token efforts designed to either pacify filmmakers, meet the bare minimum theatrical-release qualifications for various awards bodies or half-heartedly fuel word-of-mouth. The mood inside Netflix is laser-focused on its direct-to-consumer business – theatres are gentle marketing planks for luring ever more Netflix subscribers.

Theatre-owners, who prefer that films stay exclusive to cinemas for as long as possible to avoid cannibalizing box-office receipts – to maximize what’s known as the theatrical “window” of time that it takes a movie to move to digital platforms – have been free to take Netflix’s deal, or leave it. And during the lean days of the pandemic, when traditional studios kept movies locked up till the coast was clear, some cinemas capitulated.

But a funny thing happened on the way to TIFF: the great Streaming Reset, or what might be colourfully called the Apocaflix, erupted and upended everything all over again. Subscriber churn, market saturation, loose quality control and increased competition have all contributed to a far more complicated space for streamers.

This past April, Netflix’s stock nose-dived after it announced that it lost subscribers for the first time in a decade – a downturn that has since resulted in layoffs, a shift in its film division (key executive Tendo Nagenda departed last month) and fevered plans to launch an ad-supported service – the latter initiative a once unthinkable notion.

Meanwhile, HBO Max (whose programming is mostly viewable in Canada thanks to an output deal with the Bell Media-owned Crave) is undergoing a strategic rethink after the merger of Discovery and AT&T’s WarnerMedia. One sign that things aren’t going well: the Batgirl movie destined for HBO Max was shelved as a tax write-off – even though shooting on the US$90-million film had already wrapped.

Over at U.S. media giant Comcast, the nascent streamer Peacock witnessed zero subscriber growth in its second quarter, losing US$467-million in the process. And a few metaphorical studio lots down, Paramount expects about US$1.8-billion in streaming losses this year.

Even the seemingly good streaming news is confusing. Last month, Disney boasted that it hit 220 million worldwide subscribers, as many as Netflix. But the details are more complicated: Disney’s milestone includes all of the company’s streaming arms (Disney+, Hulu, ESPN+), and is based on an average-revenue-per-user (ARPU) metric of just US$4.35 a month, whereas Netflix’s global ARPU is roughly US$12 a month.

Apple TV+ and Amazon’s Prime Video appear to be continuing on their respective strategic courses – but they are also relatively protected by their tech-giant parent companies, which are content to spend billions on the golden promises of streaming until, well, they aren’t.

Movie theatres, meanwhile, are emerging from a summer filled with highs (the unprecedented success of Top Gun: Maverick, which topped both the Memorial Day and Labour Day weekends) and a whole lot of lows. The North American box office this past summer ended up bringing in US$3.4-billion, a 21-per-cent drop from 2019. Blame streamers, certainly, but also studios like Warner Bros. and Sony Pictures, which sent 48 per cent fewer wide releases to cinemas this year than in prepandemic times.

Part of Hollywood’s refusal to release more movies can be read as pandemic skittishness, plus the aftermath of a production pipeline squeezed by set shutdowns. But the studios are also playing both sides of the game, as evidenced at this past spring’s CinemaCon conference in Las Vegas, where executives rhapsodized about the importance of the theatrical experience while staying silent on how many films they were sending to streamers of their own, or selling off to others.

According to the National Association of Theatre Owners, about 500 screens in North America have been permanently shuttered since the pandemic began – but given that there are still about 40,700 across the U.S. and Canada, there is the distinct sense that there are too many screens for too few movies.

Add in the news that the British theatre giant Cineworld plans to file for bankruptcy in the U.S. – a move that would allow the company to break leases, not to mention complicate the $1.2-billion it was ordered by an Ontario judge last year to pay Cineplex after pulling out of a planned 2020 merger – and the stage is set for a disaster epic that no theatre would want to play.

And now the high drama comes to TIFF. The festival traditionally acts as the unofficial launch of the crucial fall movie season, during which Oscar contenders are prognosticated and the art of transformative cinema is celebrated. But today the festival is also ground zero for a maddening industry stalemate.

Everything you need to know about TIFF 2022

Theatres need a steady stream of diverse big-screen releases – blockbusters, certainly, but also comedies and dramas and children’s fare – but they are not willing to budge on windows. Streamers could benefit from theatrical word-of-mouth – but they don’t want to prop up what they view as an antiquated business model. A new way forward is essential, but no one wants to compromise.

According to Cineplex, the company is in “active discussions” with streamers to showcase their films in theatres. But as Cineplex chief executive Ellis Jacob said this past spring, there is an almost existential angle to consider, too. “It’s a matter of the marketing that’s important to us. We don’t want to make theatres the promotional element for the streaming service.” Still, given how much everyone needs each other, Jacob was “much more optimistic now that exhibitors will come to a deal with the streaming companies.”

A slight, tantalizing hint of that optimism can be found at TIFF, if you read between the lines.

This year, the festival is playing host to more streaming titles than ever before, including nine Netflix titles, five Apple TV+ movies (including the Zac Efron Vietnam War dramedy The Greatest Beer Run Ever), three Prime Video films (cue the spit-jokes for Harry Styles in My Policeman), one from Paramount+ (the hip-hop drama On the Come Up) and even the first original film from the Roku Channel (Weird: The Al Yankovic Story).

“We follow the movies we’re most excited about,” says TIFF’s Bailey. “If it’s a movie we love and it’s coming from a streaming platform, it’s not an issue. We’re going to see more streamers next year, and the year after.”

Steven Spielberg directs Paul Dano, left, and Michelle Williams in The Fabelmans.Universal Pictures

And, for at least a few of those films, an industry détente appears to have been reached.

Earlier this week, The Globe reported that Cineplex has, like in 2019, restricted titles that do not respect theatrical windows from its Scotiabank multiplex, which is a key TIFF venue. But a handful of streamers’ films have also made Scotiabank’s TIFF cut this year, including Glass Onion. Representatives for Netflix were not available to comment, but the move suggests that the Knives Out sequel will get a longer theatrical window before it starts streaming in December, perhaps even as relatively robust as the now-standard 45 days.

If the film brings in decent business for theatres, without compromising subscriber growth for Netflix, a new co-operative era might be on the horizon.

Audiences should pray for such an outcome. While moviegoers currently get the best ends of both deals – a steady-enough diet of big-screen spectacle, and a tidal wave of high-quality home entertainment – it cannot possibly last.

Netflix announced this past April that it was “pulling back” on content spending. HBO Max is removing shows and movies from its catalogue to cut costs. And for every streaming movie that breaks out in the zeitgeist, dozens more disappear into the algorithmic ether, creating a cultural vacuum. The more that movies are treated like a mere commodity, the more that movies become soulless, disposable products.

While all this industry drama is playing out across TIFF’s screening rooms and after-parties and on the steps of the Scotiabank escalator, you could just sit back and enjoy the return of the festival’s frenzied opening weekend – including the world premiere of Spielberg’s The Fablemans. Long a fierce advocate of the movie-going experience, Spielberg is releasing his new film with his trusted partners at Universal Pictures, who will give the film a wide theatrical berth in the thick of awards season.

But in the meantime, Spielberg will be busy. Last year, his production company Amblin signed a deal to make multiple feature films a year, for Netflix.

Plan your screen time with the weekly What to Watch newsletter, with film, TV and streaming reviews and more. Sign up today.

Your Globe

Build your personal news feed

Follow the author of this article:

Follow topics related to this article:

Check Following for new articles