HBO’s $20 Million ‘Bad Education’ Buy Shows Success Metrics in Streaming Era Are Growing Murkier

Chris Lindahl

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The highest-profile acquisition out of the Toronto International Film Festival won’t be shown in theaters despite it’s record-breaking price tag, won’t be eligible for Oscars despite its acclaimed cast, and it’s performance definitely can’t be judged using the old measurements of success.

“Bad Education,” the fact-based dark comedy starring Hugh Jackman and Allison Janney, has found a home alongside prestige content like “Game of Thrones” and “Succession” on HBO, which reportedly spent nearly $20 million for worldwide rights of the Cory Finley-helmed film.

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The movie will get no theatrical release and HBO’s awards push will include Emmy campaigns, a spokeswoman confirmed.

It’s believed to be among the most — if not the most — expensive festival acquisitions ever. For what essentially is a streaming service to spend such an enormous sum on a film, winning a bidding war against traditional theatrical distributors, HBO’s “Bad Education” pickup casts a recent wave of head-scratching sales activity in a new light.

Take, for instance, the box-office performance of titles Amazon bought during its Sundance spending spree: “Late Night” (acquired for $13 million, grossed $15.49 million in wide release) and “Brittany Runs a Marathon” (acquired for $14 million, has grossed $2.85 million so far in limited release).

The obvious analysis (and the lens most frequently applied to those two titles) is that the films bombed. But sales agents say in dealing with Amazon, the company always knows its price ceiling — however high that may seem to the outside observer.

While box office grosses remain the most publicly accessible way to judge a movie’s success, the fact is very few understand the increasingly important barometers the likes of Amazon, Netflix, and HBO use when crunching the numbers. For streamers, theatrical returns on investment are either a piece of a much larger subscription-driven pie or, in the case of this HBO acquisition, irrelevant.

The HBO-Amazon comparison isn’t apples to apples — theatrical marketing costs for the latter surely raised the box office stakes — but it speaks to an important theme taking hold as streaming competition heats up: Exclusive content is key and it better be damn good, or at least in demand, factors that often require a lot of money.

“It’s going to turn into a war,” said Jimmy Schaeffler, CEO of media consultancy the Carmel Group. “It’s going to turn into a battle of who’s going to spend the most.”

The fighting is already taking shape on the TV side. Just this week, WarnerMedia picked up the rights for “The Big Bang Theory” for streaming on the soon-to-launch HBO Max and traditional syndication on TBS for $600 million, while Netflix spent $500 million for “Seinfeld.”

While HBO Films was the division that picked up “Bad Education,” the film will surely be hawked on HBO Max and on cable when it’s released next year, just one of several planned streaming services vying to take subscribers away from Netflix.

The deal was an evolution of HBO’s 2018 purchase of Jennifer Fox’s breakout Sundance drama “The Tale,” for which there was early Oscar buzz for star Laura Dern. But with no theatrical release, Dern’s lauded performance was instead honored with an Emmy nod.

Unlike traditional film releases, where a cushy profit margin after production and marketing costs is the measure of success, streamers are playing for something different. Just as the peak TV era has blurred the line between TV and cinema, a move deeper into the era of streaming means success can no longer be judged based on ratings or box office grosses.

The new goal? “Get as much data, as many subscribers as you possibly can,” Schaeffler said.

Smart analysis of viewers’ preferences and habits will help executives make good decisions about which content — whether made in-house or bought at festivals — will land on the platform to an eager audience, he said.

What remains unclear is whether streamers will cultivate a big enough appetite to prop up future festival markets, should theatrical distributors retreat.

“Bad Education” topped IndieWire’s list of hottest sales titles ahead of TIFF. Other acquisitions of that stature included Fox Searchlight picking up North American rights to Armando Iannuci’s “The Personal History of David Copperfield” two weeks ahead of its TIFF premiere and Sony Pictures Classics’s acquisition of “The Burnt Orange Heresy,” starring Claes Bang, Elizabeth Debicki, Mick Jagger, and Donald Sutherland.

That means there won’t be many mid-range films out of TIFF feeding theaters. Amazon picked up Darius Marder’s hearing-loss drama “Sound of Metal,” but that’s set only for a limited theatrical release. The Bryce Dallas Howard documentary “Dads,” which offers a lighthearted look at modern fatherhood, is heading to Apple TV+ after the tech company acquired it at TIFF. (Apple requires worldwide rights.)

Netflix has retreated from the festival market as it ramps up original production. It bought the Spanish-language “The Platform,” a TIFF Midnight Madness sci-fi title.

With plenty of original, high-quality content being the mandate for any successful streaming platform, the question that remains is what role theatrical releases will play in achieving that primary goal.

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