Even if you discount Hulu's kinda vague viewing stats about the new movie Prey, it's clear that it is grabbing lots of viewers and the even better for Hulu, the reviews and social media buzz have been overwhelmingly positive.
But its success has also prompted a number of think pieces speculating that Prey might have done well in theaters and that a successful theatrical first run would have only made the film more valuable when it hit streaming. I'm not going to point out any of the arguments, but you're probably seen a few of them this week.
And to be kind, they're wrong. Even if you assume Prey would have done well in theaters (and it would have taken some nimble marketing to make that happen) and even if you accept that that a theatrical release always increases the value of a movie (and I think it's a situational decision), Disney's decision to release Prey directly to Hulu was a smart strategic decision.
As I mentioned in passing last week, Prey was contractually committed to being released directly to Hulu and changing that decision would have required a renegotiated contract.
It's a typically complicated Hollywood story. When Disney purchased Fox, there was an output deal in place that sent Fox movies exclusively to HBO Max for their pay-one TV window. That deal runs through the 2022 release year, but last winter, Disney Media & Entertainment Distribution and WarnerMedia amended their current output agreement and agreed to share about half of the 2022 titles on both platforms, beginning with the family comedy Ron's Gone Wrong (remember that one?). HBO/HBO Max retained pay-one TV window exclusivity on the other half of the titles, but Disney negotiated to specifically carve out Prey. WarnerMedia apparently agreed to allow that movie to be released by Disney, but it had to premiere on streaming and not have a theatrical release.
So the irony is that releasing Prey into theaters would have been great news for WarnerMedia. They would have been able to extract something from Disney in order for them to agree to the change and then once the theatrical release of Prey had ended, the movie would go straight to HBO Max.
And as Paul Harvey used to say back in the golden age of radio, "That's the REST of the story."
