When Flops Become Streaming Gold: What Sony’s ‘Madame Web’ Reveals About Hollywood’s Broken Math

Sony Pictures is facing a paradox that perfectly captures the state of the modern film business. The studio’s much-maligned superhero film Madame Web tanked in theaters earlier this year—harsh reviews, poor box office performance, a short theatrical run. But months later, it surprised everyone by becoming Sony’s most-watched Netflix release of 2024.

It’s not alone. Kraven the Hunter and Ghostbusters: Frozen Empire followed the same playbook—disappoint in theaters, then dominate on streaming. The story has become almost predictable: titles dismissed as flops find fresh life once they hit the home-viewing ecosystem.

Why This Pattern Hurts Sony More Than Anyone Else

The irony is that for Sony, success on streaming doesn’t actually translate to bigger paydays. Unlike Disney, Warner Bros., or Universal, Sony doesn’t own a major platform. Instead, it depends on licensing deals—primarily with Netflix and sometimes Amazon—to monetize post-theatrical viewership.

Here’s the catch: those licensing deals often scale payments based on domestic box office performance, not streaming consumption. That means a movie that bombs in cinemas will trigger lower payment brackets, even if it becomes a streaming sensation later.

Under the current structure, Madame Web can explode in Netflix’s Top 10 for weeks—and Sony still gets a “flop-level” check.

Sony’s Countermove: Redefining the Pay Formula

Frustrated with this dynamic, Sony is pushing to renegotiate how these deals are structured. The studio reportedly wants Netflix to share detailed viewership analytics—including metrics like completion rates and demographic breakdowns—and to pay license fees based on streaming engagement, not just box office results.

This would be a seismic shift. Netflix has long guarded its internal data, sharing only selective weekly charts without viewership depth. If Sony succeeds here, it could establish a precedent forcing streamers to align pay structures with performance realities, potentially rewriting how downstream value is calculated.

The Industry Context: Everyone’s Scrambling for Post-Theatrical Dollars

Every Hollywood studio is confronting the same post-theatrical crisis. The old model—big box office followed by DVD sales, pay-TV, and streaming syndication—has collapsed. Today, the theatrical window is shorter, and streaming deals are flatter.

To protect value, each major studio has chosen its own “windowing” strategy:

• Universal pivots to Peacock early to boost subscribers, then licenses to Netflix later before reclaiming titles.

• Warner Bros. keeps most films within Max, then licenses select hits externally to generate extra cash.

• Paramount cycles titles through Paramount+ first, then shops them to outside bidders like Hulu or Amazon after audience fatigue sets in.

Sony, lacking a first-party streaming ecosystem, can only fight on the contractual front—by trying to make licensing formulas smarter and fairer.

The Bigger Picture: Metrics Are Shifting Faster Than Money

Sony’s push may or may not succeed, but the debate it sparks is overdue. In an era when theatrical underperformers are becoming digital juggernauts, using box office performance to calculate value no longer reflects audience behavior.

Hollywood accountants, producers, and streamers all know the truth: the metric system is outdated. The question isn’t whether it will change—it’s who will set the new rules first.

As audience preferences move increasingly toward at-home consumption, a project’s long-tail performance could soon matter more than its opening weekend. If that happens, Madame Web and her fellow “flops” might end up rewriting Hollywood’s definition of success.