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Speaker 1: Welcome to Daily Vriety, your daily dose of news and

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Speaker 1: analysis for entertainment industry insiders. It's Monday, December eighth, twenty

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Speaker 1: twenty five. I'm your host, Cynthia Littleton. I am co

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Speaker 1: editor in chief of Variety alongside Ramin Setuda. I'm in

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Speaker 1: LA He's in New York and Bridy House reporters around

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Speaker 1: the world covering the business of entertainment. In today's episode,

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Speaker 1: we'll hear from Variety's Brent Lang on the box office.

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Speaker 1: Five Nights at Freddy's two overperformed in its debut. That

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Speaker 1: made for three good days at the box office for Blumhouse, Atomic, Monster,

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Speaker 1: and Universal. But before we get to that, here are

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Speaker 1: a few headlines just in this morning that you need

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Speaker 1: to know. Much has happened since our last episode. On Thursday,

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Speaker 1: December fourth, Netflix cinched an agreement to buy Warner Brothers

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Speaker 1: and HBO Max. All that industry chatter that Netflix was

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Speaker 1: only in this to be a spoiler to kick the

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Speaker 1: tires and look at wbd's books. That was all nonsense.

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Speaker 1: They were in it to win it the whole time.

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Speaker 1: They are also looking ahead to the future of slowing

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Speaker 1: subscriber growth. This diversification makes sense, especially with Sui generis

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Speaker 1: assets like Warner Brothers and HBO on the market. But

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Speaker 1: David Ellison, of Paramount's Guidance is also in it to

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Speaker 1: win it. He's indignant that Paramount's offer was rebuffed, and

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Speaker 1: he's gone public with it. In a conference call this

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Speaker 1: morning with Wall Street analysts, you could hear the frustration

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Speaker 1: in his voice. Ellison's unsolicited overtures for Warner Brothers Discovery

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Speaker 1: in September and October kicked off the public bidding skirmish

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Speaker 1: for WBD. In Ellison's view, this should be simple math.

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Speaker 1: They are offering more dollars for the company than Netflix's bid,

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Speaker 1: but the decision is not entirely about money. It's about

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Speaker 1: what's best for the assets that are utterly unique in

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Speaker 1: the history of entertainment. Warner Brothers Studio is foundational to Hollywood.

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Speaker 1: HBO reinvented television starting with live polka dances and hockey

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Speaker 1: games in the early seventies. That's true, you can look

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Speaker 1: it up on varietay dot com. So Paramount Skuydance went

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Speaker 1: hostile this morning. The next steps for everybody aren't entirely clear,

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Speaker 1: but the WBD board has cozied up with Netflix, the

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Speaker 1: prestige player in the entertainment marketplace of today. It's going

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Speaker 1: to take a lot for Paramount, Skuiddance and their coalition

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Speaker 1: of financiers to drag WB and HBO out of the

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Speaker 1: arms of Netflix. We'll stay on the case and bring

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Speaker 1: you updates at all hours of the day and night

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Speaker 1: until it's settled. We're not even done with twenty twenty five,

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Speaker 1: and we already know what one of the biggest stories

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Speaker 1: of twenty twenty six is going to be. As if

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Speaker 1: all the WB, Paramount and Netflix drama wasn't enough, This

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Speaker 1: morning also brought news of the Golden Globe Award nominations.

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Speaker 1: Congrats to all who made the cut. Make sure you

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Speaker 1: check out all of the Golden Globe analysis on Daily

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Speaker 1: Ridy's sibling podcast, Awards Circuit. That show's terrific team of

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Speaker 1: Clayton Davis, Emily Longeretta, Janelle Riley and Jazz Tunke will

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Speaker 1: break down all you need to know about this year's nominations.

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Speaker 1: Field and speaking of awards. On Sunday Night, Variety was

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Speaker 1: showered with kudos at the ninth annual Arts and Entertainment

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Speaker 1: Journalism Awards presented by the Los Angeles Press Club. We

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Speaker 1: are so so grateful for the recognition that included the

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Speaker 1: awesome Print Journalist of the Year honor to our beloved

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Speaker 1: music writer and critic Chris Willman. Willman is such a

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Speaker 1: pro that not only did he win that award and

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Speaker 1: four more, he also wrote up and posted our story

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Speaker 1: about Variety winning all those awards on Sunday night. That's

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Speaker 1: modern journalism, folks. A whole bunch of stories about the

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Speaker 1: WBD drama, the Golden Globe nominations, and Variety's triumph at

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Speaker 1: the Press Club Awards can be found on Variety dot

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Speaker 1: com right now. And now it's time for conversations with

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Speaker 1: Friday journalists about news and trends in show business. Brent Lang,

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Speaker 1: Variety's executive editor, joins us to break down the weekend

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Speaker 1: box office numbers. The sequel Five Nights at Freddy's two

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Speaker 1: was welcomed by horror fans as the Blumhouse Atomic Monster

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Speaker 1: title way over performed expectations, and that's another notch in

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Speaker 1: the wind column for video game adaptations on the big screen.

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Speaker 1: Brent Lang, thank you for joining me. Thank you for

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Speaker 1: being our steward of the box office this weekend.

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Speaker 2: Always fun to substitute for Rebecca.

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Speaker 1: You have big shoes to Phil. She's an able successor

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Speaker 1: to your role as box office chief. So very happy

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Speaker 1: day for Lumhouse and Universal. Five Nights at Freddy two

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Speaker 1: opened bigger than expected, And with movies these days, sequels

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Speaker 1: are no guarantee that the audience will show up. Brent,

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Speaker 1: what stood out to you about the performance of this sequel.

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Speaker 2: It did do so much better than projections, which we're

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Speaker 2: about thirty five million to forty million, and it did

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Speaker 2: sixty three And that's particularly impressive because Five Nights at

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Speaker 2: Freddy's only cost I think thirty six million dos. So

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Speaker 2: it was a very economical hit Blumhouse and Blumhouse now

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Speaker 2: they go buy Blumhouse Atomic Monster because they merged with

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Speaker 2: James Wand's company. But they had needed something, They needed

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Speaker 2: a win because they'd had a really rough year at

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Speaker 2: the box office. Things like Wolfman and Megan two point

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Speaker 2: zero had not done so well, and they'd been one

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Speaker 2: of the most consistent hit makers in the industry for

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Speaker 2: over a decade now, so this shows that they may

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Speaker 2: be rebounding, and I think that's really good news for

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Speaker 2: movie theater owners who really need that type of consistency with.

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Speaker 1: Five nights at Freddy's. I know from my very unofficial

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Speaker 1: poll of the tweens and teenagers in my life that

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Speaker 1: this this franchise is very resonant with them.

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Speaker 2: It's kind of a bizarre thing with these animatronic killing machines,

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Speaker 2: and it's also based on a popular video game, and

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Speaker 2: right now, video games are are proving to be very

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Speaker 2: successful when they're adapted into movies. That had not historically

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Speaker 2: been the case. They had been a very difficult genre

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Speaker 2: for movie studios to crack, but in recent years you've

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Speaker 2: had like Sonic the Hedgehog and Super Mario Brothers movie

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Speaker 2: and this year a Minecraft movie, and they've all done

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Speaker 2: very very well, and they seem to really resonate with

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Speaker 2: younger moviegoers, which is also good news for cinema operators

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Speaker 2: because that's the exact generation that people are really worried

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Speaker 2: are turning away from longer form entertainment like film towards

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Speaker 2: things like TikTok and YouTube. So I think the fact

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Speaker 2: that this is something that appeals to this demographic it's

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Speaker 2: kind of exciting, actually.

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Speaker 1: And this opening probably ensures that we'll see a five

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Speaker 1: nights at Freddy's three.

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Speaker 2: I would imagine, and maybe a four and maybe a five.

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Speaker 1: And also in your story, Brent big sigh of relief,

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Speaker 1: Zootopia two is not slowing down. It's crested the nine

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Speaker 1: hundred million mark at the global box office, which is

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Speaker 1: a lot of coin.

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Speaker 2: That's fantastic news for Disney. In just two weeks of release,

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Speaker 2: a film has reached about nine hundred and fifteen million

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Speaker 2: dollars globally, and a lot of that has come from

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Speaker 2: the international marketplace. Particularly exciting for Disney is that this

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Speaker 2: film is already the number two Hollywood movie of all

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Speaker 2: time in China. It's made about four hundred and thirty

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Speaker 2: point four million dollars. And that's good because since COVID

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Speaker 2: tensions between the US and China have really resulted in

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Speaker 2: major studio releases not doing very well in that marketplace.

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Speaker 2: But there's a Zootopia attraction at one of the Disney

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Speaker 2: parks in China, and there seems to be like a

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Speaker 2: real resonance with that brand there. So if you look

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Speaker 2: at really what is behind this, a lot of it

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Speaker 2: has to do with China and how the film is

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Speaker 2: resonating there.

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Speaker 1: Brent, what is the raining champ among Hollywood movies for

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Speaker 1: China box office?

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Speaker 2: That would be Avengers Endgame, another Disney movie. So clearly

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Speaker 2: they have the type of big franchises that can still

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Speaker 2: kind of resonate in that very very difficult market to crack.

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Speaker 1: In terms of the marketplace, I would imagine that that

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Speaker 1: five nights of Freddy's two very nice surprise for exhibitors.

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Speaker 1: But people, I gotta believe are really bracing for the

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Speaker 1: next Avatar movie, Fire and Ash in two more weekends.

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Speaker 2: That's what a lot of hopes are riding on because

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Speaker 2: right now the box office just crossed eight billion ducks,

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Speaker 2: and I think going into this year there was a

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Speaker 2: real hope that it would actually reach or surpass the

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Speaker 2: nine billion dollar mark, which it is only done one

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Speaker 2: time in the post pandemic years, and that was the

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Speaker 2: Barbenheimer year of twenty twenty three. And actually right now

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Speaker 2: we're kind of running neck and neck with last year,

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Speaker 2: which was considered to be something of a disappointment. We're

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Speaker 2: only about one percent ahead. So the hope is that

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Speaker 2: Avatar will be another one billion dollar to two billion

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Speaker 2: dollar success story that will really close out the year

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Speaker 2: on a high note, because it's been a very roller

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Speaker 2: coaster one for the box office. We've had some real

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Speaker 2: highs like Sinners that kind of came out of nowhere

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Speaker 2: and did really well Minecraft movie. I've had some really great,

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Speaker 2: sort of scorching periods at the box office, and then

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Speaker 2: we've had some real doldrums, October being I think the

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Speaker 2: worst in about thirty years. That inconsistency has really caused

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Speaker 2: a lot of alarm among cinema operators who thought this

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Speaker 2: was finally going to be the year that they had

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Speaker 2: put that post pandemic blues behind them, and it has

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Speaker 2: not proven to be the case.

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Speaker 1: Brent, I'm sure your conversation's talking to people about the

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Speaker 1: box office today. I'm sure that it addressed the big

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Speaker 1: N shaped elephant in the room, the big news that

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Speaker 1: came down on Friday that Netflix has a deal to

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Speaker 1: buy Warner Brothers in HBO, and we're still trying to

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Speaker 1: make sense of it all. But I would imagine talking

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Speaker 1: to people in film distribution and exhibition that there's a

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Speaker 1: lot of strong reactions to this news.

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Speaker 2: A lot of cinema operators are very very fearful about

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Speaker 2: this deal. They do not frankly like Netflix very much.

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Speaker 2: They believe that streaming has really upended their business model,

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Speaker 2: and they have a lot of trouble working with Netflix,

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Speaker 2: who does release films theatrically, but does it in a

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Speaker 2: fairly limited way in order to mostly to qualify for awards.

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Speaker 2: And so I think Ted Sarandos's comments about the windows

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Speaker 2: that they would honor existing agreements for Warner Brothers, but

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Speaker 2: at the same time he also said that he expected

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Speaker 2: windows to evolve in a more consumer friendly way. I

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Speaker 2: think a lot of people read that as windows will shrink,

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Speaker 2: and for theater owners, they see that as an existential threat.

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Speaker 2: They absolutely believe that shorter windows have infringed upon their

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Speaker 2: ability to make money, that it has encouraged people to

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Speaker 2: wait for films to come out on home entertainment, and

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Speaker 2: that that's denied them profits. And so I think they

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Speaker 2: are extremely wary about this deal. One exhibitor on Friday

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Speaker 2: told me that he absolutely wants to see it, killed

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Speaker 2: he's very very hopeful that it will not go through.

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Speaker 2: We can't predict it. We don't know what will happen.

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Speaker 2: And then it's possible that once Netflix owns Warner Brothers,

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Speaker 2: they will start to see the value and a theatrical

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Speaker 2: release in all of the downstream revenue that that can

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Speaker 2: lead to. But for the moment, I would say that

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Speaker 2: most exhibitors are feeling very pessimistic about this news.

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Speaker 1: Of course, you reported today that in fact, Ted Sarandos

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Speaker 1: has got a jumpstart on the lobbying effort in having

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Speaker 1: a very specific meeting with President Donald Trump talking about

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Speaker 1: this transaction. I have no doubt that that has probably

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Speaker 1: kept the social media posts from flying in terms of

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Speaker 1: sharing the President's opinions on this. But again, a lot

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Speaker 1: of unknowns here and so much to cover.

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Speaker 2: As you suggested, this is not a normal regulatory environment,

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Speaker 2: and I think Ted Sarandos recognizes that there needs to

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Speaker 2: be a real charm offensive in order to make anything

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Speaker 2: happen in Donald Trump's Washington well.

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Speaker 1: From crunching the numbers to following the high level negotiations

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Speaker 1: on this merger. Thank you, as always for working virtually

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Speaker 1: round the clock.

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Speaker 2: Appreciate it my pleasure.

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Speaker 1: As we close out today's episode, here's a few things

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Speaker 1: we're watching for The game awards will be handed out

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Speaker 1: on Thursday evening at the Peacock Theater in downtown Los Angeles.

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Speaker 1: Variety's Jennifer mos is heading west to cover the marathon

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Speaker 1: ceremony that recognizes top video games. Variety is wrapping up

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Speaker 1: its coverage of the Red Sea International Film Festival in Jetta,

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Speaker 1: Saudi Arabia this week. We'll hear from Variety's Alex Rittman

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Speaker 1: in tomorrow's episode on how the festival is evolved and

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Speaker 1: what it means for this fast changing country. We love

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Speaker 1: and other feedback about Daily Variety to podcasts at Variety

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Speaker 1: dot com, and you can also go to Variety dot

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Speaker 1: com and subscribe to our precious print magazine Before we go.

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Speaker 1: Congrats to James L. Brooks, the multi hyphenate who helped

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Speaker 1: bring us The Mary Tyler Moore Show, Taxi, Terms of Endearment,

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Speaker 1: Broadcast News, and The Simpsons, is getting a star on

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Speaker 1: the Walk of Fame on Thursday, December eleventh. It coincides

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Speaker 1: with the release of his latest movie, Ella Mackay. Thanks

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Speaker 1: for listening. This episode was written and recorded by me

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Speaker 1: Cynthia Littleton, with contributions from Brent lang Stick Snicks Hick Picks.

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Speaker 1: Please leave us a review at the podcast platform of

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Speaker 1: your choice, and please tune in tomorrow for another episode

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Speaker 1: of Daily Variety.