The lawsuit brought by Scarlett Johansson against The Walt Disney Co. has struck Hollywood like a thunderclap. The litigation arises out of Disney’s decision to release Black Widow concurrently in theaters and on Disney+. Johansson claims that the streaming release deprived her of compensation she should have received otherwise. The fact that this dispute was not settled but ended up in a nasty public fight highlights once again that the transformation of the entertainment business to one dominated by streaming media will not always be smooth.
Johansson’s character Natasha Romanoff was a supporting player throughout the Avengers cycle; Black Widow was her first chance to headline a feature on her own. (Probably her last chance too, since Natasha Romanoff sacrificed herself in the 2019 movie Avengers: Endgame. It’s also generally assumed that Johansson would have been reluctant to bring suit against Disney before her character’s arc was finished.)
The release of Black Widow was held back for over a year due to the COVID pandemic. With restrictions relaxing, it was widely expected to be a box office hit. In fact, the movie brought in $80 million in domestic box office in its first week and another $78 million abroad, but dropped a dramatic 68% in its second week. Total box office to date stands at $343.5 million and domestic box office at $167 million—low numbers for a Marvel movie. Meanwhile, Disney took the unusual step of announcing that the pay-per-view streaming revenues of Black Widow on Disney+ at $30/view were $60 million over its first weekend of release.
Johansson’s lawsuit claims that she was promised the film would receive a wide theatrical release. A substantial portion of her total compensation was to be from bonuses based on theatrical box office sales. The day-and-date release strategy with Disney+, she alleges, tortiously interfered with her Marvel deal. As the complaint asks, “Why would Disney forgo hundreds of millions of dollars in box office receipts by releasing the Picture in theatres at a time when it knew the theatrical market was ‘weak,’ rather than waiting a few months for that market to recover?” The complaint then offers two main answers to its own question.
The first was to pump up the value of Disney+: “On information and belief, the decision to do so was made at least in part because Disney saw the opportunity to promote its flagship subscription service using the Picture and Ms. Johansson, thereby attracting new paying monthly subscribers, retaining existing ones, and establishing Disney+ as a must-have service in an increasingly competitive marketplace.”
The second reason alleged for the concurrent release was simply for Disney’s Marvel subsidiary to save itself the very large box office bonuses that would have been payable had the theatrical box office not been cannibalized by a streaming release.
The complaint also alleges that Johansson tried without success to renegotiate her deal with Marvel. In this the Disney approach differs from Warner Bros., which announced that its entire 2021 theatrical slate would be released day-and-date on HBO Plus in an effort to jump start that service. In response to heated protests from talent, the company has been cutting deals to compensate them for putative lost income.
Within hours after the lawsuit was filed, Disney responded with a take-no-prisoners press statement: “The lawsuit is especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic. Disney has fully complied with Ms. Johansson’s contract and furthermore, the release of Black Widow on Disney+ with Premier Access has significantly enhanced her ability to earn additional compensation on top of the $20M she has received to date”
Talent and studio lawyers will inevitably work out new deal points to address the new business realities of streaming. Until they do, we are going to see more skirmishes such as these.
Meanwhile, in a relatively quiet but notable move, Netflix has asked for a seat at the insider’s table and joined the Alliance of Motion Picture and Television Producers (AMPTP). This is the organization that represents the studios in negotiating with the Hollywood labor unions, including over the critical issue of streaming residuals. Apple+ and Amazon Prime had previously joined the group.