Anti-Trust in Faith: Why Sony Needs to Play Hardball with Spider-Man

by Gabriel Valdez

Sony is playing hardball with Disney over the next “Spider-Man” movie. Will they still share production of the next movie and allow the character to remain in the Marvel Cinematic Universe? Or will the character revert to Sony and once again go solo in their own movie? The more important question might be why Sony is digging in its heels at this moment.

Disney’s Dominance

Chances are probably good that the two will figure out a deal. Yet the impasse reveals something more core about how studios need to begin interacting with Disney. Disney was already the most successful studio before its purchase of Fox. Now, it’s unquestionably the most dominant studio in the field.

Buena Vista is the releasing arm of Disney. According to Box Office Mojo, it’s controlled 36.5% of domestic studio market share thus far in 2019. That represents $2.79 billion.

The next closest studio is Universal at 13.9%. That represents $1.06 billion. And that’s before Disney really gets a chance to push any of their Fox properties onto the calendar.

Buena Vista has hovered around 20-26% market share for years, but the last time another studio came first was Universal in 2015.

This informs why Disney has been pushing so much material out. Good, bad, it doesn’t matter so long as they’re releasing an event film regularly.

Calendar Control

A big part of what Disney’s doing is trying to choke out the calendar. Movies only tend to have extremely large openings during certain times of year – mainly the extended summer and holidays. The fewer dates available for other studios to get event films in, the worse a situation those other studios face and the more their properties are de-valued.

It doesn’t matter so much to Disney if a movie’s successful or not. They can weather a bad opening, such as the one for “Solo”. They’ll still be fine, and the franchise as a whole will still be fine. It matters that they can control the calendar and deny dates to other films. A major “Avengers” or “Star Wars” film can block other movies opening big for three weeks. Even a minor MCU film can scare off other studios for a two-week block.

The fewer good dates available for event movies, and the more other studios fail to launch their own franchises. Yet to do this, Disney needs franchises. They need new material constantly churning out of the MCU, “Star Wars”, and their live-action remakes of cartoon classics to be able to take up those dates. They often reserve them years ahead of time. This still isn’t enough to sustain Disney blocking all these dates out indefinitely. That’s a major reason it’s in other studios’ interests to play hardball with Disney about sharing or selling any properties.

Disney Needs Franchise Fuel

Disney still needs more fuel – more franchises. Sony and other studios are fully aware of this, and they own or have the rights to those franchises. The only way non-Disney studios can keep their ability to stake out dates in the calendar is to retain these franchises while denying them to Disney. The deal has to be much sweeter for a studio like Sony to essentially sabotage access to event dates in the future.

This approach by Disney is reminiscent of classic monopolistic behavior. Now, it’s important to point out that Disney is not a monopoly. It is striving to become one, or as close to one as it can get, and to do that requires monopolistic practices.

Monopolies don’t start exercising monopolistic strategies only after becoming monopolies. They use them in order to become monopolies in the first place. They often try to undercut a competitor in one area, and only once that competitor is driven out of that area, will they raise their prices.

This isn’t selling oil in 1890 Ohio, though. Movies are released nationally, and theater chains charge the same regardless of which studio releases a movie. How exactly is Disney able to make their approach most effective?

Blocking Competitors

Disney has done this in an even more direct way. They’ve made theater chains sign ridiculous contracts – if they want to carry a large Disney movie like an “Avengers” or “Star Wars” release, they have to make agreements to show them on their largest screens for four weeks straight. In some cases, theaters have even been required to show more minor Disney films later in the year on a set number of screens for a set number of weeks. Both factors directly block the number and quality of screens available to other studios’ releases at key dates.

They’re also poisonous to smaller theaters that only have a few screens. It means that these theaters will often be blocked a month from showing any other movies if they want access to any Disney event films. Since another major release from another studio is likely within two-to-four weeks, it means that it’s going to be blocked from those small theaters entirely. Often, the only way for small theaters to change the films they’re showing is to carry whatever the next Disney event film is – with a similarly restrictive contract. This can create a cycle where smaller theaters are essentially locked into only showing Disney movies for months at a time.

This means that having more properties to fill those dates doesn’t just lock in more of the calendar for Disney. More to the point, it blocks those dates from other studios. More franchises means more large releases to force more imbalanced contracts with theater chains and to strong-arm smaller theaters. That means that Disney can deny screens to the releases of other studios. Even a flop can be contractually required to take up screens for four weeks.

Digging in Their Heels

This is what forms the context for Sony – and when their time comes, other studios – being very strict about negotiating favorable deals with Disney. The more franchises they allow Disney to have, the more event dates Disney controls. The more event dates Disney controls, the more screens they can force theaters to block from other studios’ releases – sometimes just for that event release, but sometimes by including even more minor films that take up screens on certain major release dates.

Sony is not just negotiating a favorable “Spider-Man” deal. They are also effectively negotiating the access their own films will have to the calendar in the future.

Of course it’s a goal for their films to make money. Of course it’s a goal for Disney to release on good dates. The best way to look at Disney right now, however, is to understand that their primary goal is to deny dates and screens to other studios’ films.

This is why they’re pushing so much material out the door. Regardless as to whether there’s a reason to make certain films, or even if some of them are record flops, each one can deny dates and screens to other studios for up to a month’s time. That’s good for Disney. It de-values the properties they’d seek to buy from other studios in order to further strong-arm theaters and further control and block the calendar.

What Can Be Done?

Neither Sony nor theater chains are heroes to Disney’s villain in this. They each have their own godawful business practices. Disney’s just the one that got there before the others, but it still makes sense for the others to dig their heels in before they can’t anymore.

It’s also difficult to figure out how to combat this. I’m going to be in theaters for “Black Panther 2” and “The Rise of Skywalker”. Disney’s making a decent amount of progressive event films and doing a better (though still far from perfect) job with women leads and actors and directors of color than many. I want to support those films, and at the same time not see Disney increasingly take over the industry.

The best answer I can give is that the key rests in greater regulation. Media and entertainment laws have become more and more de-regulated in the U.S. on endless fronts. In particular, the Paramount Consent Decrees need to be extended to Disney (and other players like Amazon). Aggressive enforcement of the decrees has all but evaporated. As in so many areas today, it needs to come back.

How to Assassinate a World Leader on Film or: Why North Korea and Sony Are Both Wrong

by Gabriel Valdez

First thing’s first. I don’t like North Korea. They treat their citizens the only way a military dictatorship seems to know how. It’s a nation ruled by bullies and propped up so long only because China prefers a buffer between American land forces in South Korea and themselves.

What do I think about the complete cancellation of Sony’s new film about assassinating North Korean dictator Kim Jong-un, The Interview? After hackers, reportedly employed by the North Korean government, revealed Sony studio chiefs’ private correspondence and pirated several of their upcoming films, the studio was still set to release The Interview in theaters this weekend. It wasn’t until the threat of physical violence that theater chains began pulling The Interview and, finally, Sony decided to simply shelve the film.

Let’s get some perspective. First off, the thought that North Korea has any capability to extend physical threats into the American public is laughable. Secondly, even if they did have any real covert extension, they wouldn’t waste exposing it just to stop a movie. Thirdly, China is too heavily invested in the United States to want to spark a war (even by proxy), and they don’t want to have to prop up North Korea’s infrastructure even more were we to respond to a terrorist attack on our soil by bombing them.

North Korean agents are not roaming our streets in droves – that’s ridiculous. China has better things to do than engage in brinksmanship over a Seth Rogen movie. While North Korea doesn’t always listen, the regime depends on China for survival and China will have made it known to North Korea what actions are tolerable and what actions will see consequences. Don’t get me wrong – China will be overjoyed to see the effect some well-funded, but pretty basic, hacking can have on U.S. businesses. They love having the ability to use North Korea in this way. If China did this (and they’ve pushed the boundaries), it would be an international incident. A fight between North Korea and Sony? That’s on the entertainment page.

Theater chains did not pull The Interview because of the threat of physical violence. They pulled it because they did not want to be hacked next. If Sony couldn’t withstand it, what chance does Regal Cinemas or Cinemark have, let alone the smaller and regional chains? It just sounds better to buy into the narrative and say, “We’re protecting our customers,” than it does to admit, “Yeah, we have some e-mails and finances we don’t want to see the light.”

Now, declaring this as a resounding defeat against terrorism is…stupid. I was looking for a more nuanced word, but “stupid” works just fine. Like I said, I don’t like or support North Korea, but Sony up and made a movie about killing another country’s leader. No matter how much I may dislike that leader and think he’s an evil mark upon this earth, that’s dangerous territory – ethically and otherwise. What are some other recent comedies that depict assassinations of real-world people who were alive at the time?

How about the famous South Park episode where Cartman kills Osama bin Laden? Well, that’s not a world leader, that’s a terrorist. Those definitions certainly bump into each other when talking about the leader of North Korea, so how about Team America: World Police going to war against Kim Jong-il (father of and predecessor to Kim Jong-un)?

These are fuzzy definitions we’re getting into, but I interpret those two examples as lampoons. Keep in mind that in Team America: World Police, our heroes have to fight their way through the likes of Sean Penn and Matt “Matt Damon” Damon. Team America wasn’t about assassinating another country’s leader, it was about an interpretation of Hollywood’s occasionally self-serving morals…and puppets. The fact that all the characters were marionettes definitely helped. Neither the movie nor its advertising campaign was: “Kill this guy.” They were each larger than that, communicating instead, “This is a movie about how ridiculous we can be and, oh yeah, Kim Jong-il’s in it singing about being lonely while he feeds U.N. inspectors to sharks.” (North Korea certainly didn’t like that movie, but they didn’t launch this large a campaign against it.)

The Interview seems to be about: “Kill this guy.” Its advertising campaign boils down to: “Kill this guy.” It involved neither animation nor marionettes, which have the capability to deflect criticism itself into the realm of the silly and not worthwhile. It starred James Franco and Seth Rogen, two very recognizable personalities.

Furthermore, that South Park episode, “Osama bin Laden has Farty Pants,” was made about a figure with whom we were already at war. The episode was itself a part of that war. Not only did U.S. troops reportedly love it, but that episode also sought to deconstruct the mythical power of bin Laden in our own minds. By lampooning him, we took him less seriously. The most powerful tool you can wield against a Bogeyman is to stop being scared of him. South Park made him into a punchline the same way pre-World War 2 comedies made Hitler into one. It made us confident we could beat him rather than be scared of him.

Team America: World Police isn’t that much more complicated. We were not at war with North Korea, although North Korea is still technically at war with us. Kim Jong-il was in it, but he wasn’t the purpose of the film. Team America recognized that he wasn’t a Bogeyman because we already didn’t take him or North Korea seriously. The Bogeymen in Team America were our own political extremes – conservative Imperialism, Hollywood-styled liberalism, and an ineffectual U.N.

Team America may be a silly movie about how ridiculous marionettes can be made to look, but it was also the most effective millennial artistic takedown of the U.N. until P.J. Harvey recorded “The Words That Maketh Murder.”

Having not seen it, no one can say for sure if The Interview had a deeper reason for being, but advertising made it seem empty. The joke communicated wasn’t “The Bogeyman is only in our heads,” and it wasn’t “let’s glue stuff on marionettes until they look like mutant caricatures.” The joke advertised was: “Kill this guy.”

That’s a fundamentally different and excessively remedial approach to making a film about a real-life figure. There’s a reason that even the most serious-minded films and TV shows about world politics use fictional figures (Syriana, Tyrant), fictional countries (from Duck Soup to West Wing), recount recent history (Zero Dark Thirty), or house their fictional narratives alongside fact-based chronologies (Green Zone). These films are careful and, while we view comedies as inherently irreverent, that irreverence means you need to be even more careful.

Irreverence is not an excuse. It does not mean you don’t do the work required to understand your situation. It means you work even harder to understand it that much better, so that you can most effectively undermine it. If you’re not willing to do that work, then make your movie about assassinating a fictional character in a fictional country that looks and feels a lot like North Korea. Maybe even stick a joke about how James Franco keeps calling it North Korea and Seth Rogen has to keep correcting him.

More than anything else, I look at The Interview and ask if it helped or harmed relations with North Korea. The Trey Parker and Matt Stone examples I bring up (South Park, Team America), for all their conscious viciousness and disrespect, did enough to mediate the potential damage they could have caused with other cultures. The Interview, so far, did not. That’s a film that could cost lives, maybe not American ones but possibly South Korean ones and almost assuredly North Korean ones. For all the bitching about releasing the Congressional report on torture this last week and how it might cost lives, those same voices are now arguing that The Interview scraping its release is a tragedy? If one costs lives, the other does, too.

I’m not saying Sony doesn’t have the right to make and release The Interview. I’ll defend to my dying breath that they absolutely do. What I am saying is that The Interview, at least as advertised, was deeply irresponsible.

The lines between what’s OK and what’s not when it comes to making art involving an existing dictator and his assassination are so fuzzy that I don’t think anyone can clearly demarcate what’s right and what’s wrong. But the fixes for The Interview would have been so remarkably easy, mediating the potential damage it could risk so inconsequential an act, that I don’t find myself feeling sorry for Sony at all. I feel sorry for Lizzy Caplan and Diana Bang and Timothy Simons and other actors who were probably excited to see the results of their last gig. I feel sorry for the other Sony films that were pirated and released online because of a production with which they had nothing to do. But just because North Korea’s a raging, megalomaniacal dictatorship doesn’t mean that Sony is the Angel of frickin’ Christmas. They can both be assholes in this situation.

If The Interview had been advertised as a film about James Franco and Seth Rogen acting silly and, oh yeah, Kim Jong-un’s in it, you would have seen a smoother lead-up to release. North Korea would have objected after the fact, but they wouldn’t have launched an entire campaign against it.

This brings up two questions:

1. What the hell did Sony expect?
2. Why the hell weren’t they prepared for it?

Many called this reaction from North Korea months ago. Anyone even halfway paying attention had to suspect North Korea – who have a history of hacking U.S. businesses far more sensitive in their nature than Sony – would retaliate. It’s not a country that bothers itself with anything better to do.

Why the hell wasn’t Sony in the least prepared for this reaction? Why hadn’t they prepped for it and coordinated with the U.S. government? Our government doesn’t miss a chance to go toe-to-toe with foreign hackers. It’s like war games for them because it is, essentially, live-fire practice for a key component of the next major war.

If I were Sony, I’d be firing some key people (Amy Pascal and Scott Rudin chief among them), not just because North Korea revealed e-mails where they were clearly being racist, and e-mails in which they were conspiring to pay female stars less than their male counterparts. It wouldn’t even be because The Interview is going to be at least an $80 million loss on their books (assuming half-and-half for budget and advertising, which is a very conservative estimate). It wouldn’t even be out of the embarrassment of all these things combined. I would be firing people because all of this was so very easily preventable.

And when something is this easily preventable, it’s only out of sheer laziness or ego that it happens anyway.