Screen Talk’s Top 10 Winners and Sinners of 2025

Kevin Goetz, CEO of movie-testing firm Screen Engine, says Warner Bros.’ risk-taking slate under Michael De Luca and Pam Abdy — including titles such as A Minecraft Movie, Sinners, Weapons, the latest Superman, Final Destination: Bloodlines and The Conjuring: Last Rites — was rewarded in 2025, while theatrical will likely persist with fewer, event-style films. Goetz warns that AI poses a major disruption to testing and creative IP, calling for international IP protection and urging studios to prioritize elevated, audience-driven content; his testing business remains robust amid content proliferation.

Analysis

Market structure is bifurcating: winners are studios that can finance event “elevated” tentpoles and manage budgets (Warner/Discovery — WBD, legacy IP owners such as DIS, SONY), plus platforms that accurately test audience demand (NFLX). Losers are mid‑budget theatrical fare, riskier indie slates and smaller streamers unable to fund marketing; expect top 10% of releases to capture >50% of theatrical revenue over the next 12–24 months, increasing concentration and pricing power for hits.

Tail risks center on AI/IP regulation and rapid synthetic content adoption — assign a 10–25% probability over 12–36 months of restrictive legislation or major rights litigation that raises marginal content costs by 10–30%. Shorter horizons (0–3 months) are dominated by box‑office outcomes and awards season; medium (3–12 months) by slate rollouts and subscriber/margin reporting; long run (12–36 months) by structural shifts in consumption and IP rules. Hidden dependencies: theatrical rebound is highly correlated with consumer discretionary spending, where a 100–200 bps shift in unemployment or CPI could move attendance materially.

Trade implications: establish a 2–3% long position in WBD ahead of 2H‑25 tentpoles and size a 3–6 month WBD call spread (cap upside at 20–40%, cost ≤0.5% portfolio) to limit time decay. Add a 1–2% tactically long NFLX via 9–12 month LEAP calls (benefit from tested global hits) and run a relative‑value pair: long WBD / short DIS (1–2% each) into Q3 box‑office readouts to capture execution/portfolio differences. Rotate +3–5% into Media & Consumer Discretionary (exhibitors CNK/AMC selectively) and reduce allocation to mid‑budget streaming content producers by 2–4%, rebalancing after box office windows (check results at 30/60/90 days).

Contrarian angles: the market underprices the moat from tested-audience feedback and established IP — incumbents with deep catalogs gain pricing power if AI increases creation friction. Streaming multiples may be too lofty for firms that cannot produce repeat tentpoles; conversely, theater operators could be underowned if hit concentration persists. Watch for AI/IP rulings and three major summer releases (next 90–180 days) as binary catalysts that could flip these positions.

Key Decisions for Investors

• Establish a 2–3% long position in WBD (Warner Bros. Discovery) ahead of 2H‑2025 tentpoles; complement with a 3–6 month call spread sized to risk ≤0.5% portfolio to target 20–40% upside while capping premium loss.
• Allocate 1–2% to long NFLX via 9–12 month LEAP calls (captures global hit upside and testing advantage); size to tolerate 30–40% implied volatility moves and close on subscriber/earnings misses.
• Implement a pair trade: long WBD (1–2%) and short DIS (1–2%) into Q3 box‑office readouts — trade to profit from relative execution on tentpoles and budget discipline; unwind or trim after two sequential box‑office windows (~60–90 days).
• Rotate +3–5% into Media & Consumer Discretionary exposure (select exhibitors CNK/AMC for hit‑driven upside) while reducing exposure to mid‑budget streaming content producers by 2–4%; reassess after summer slate performance (30/60/90 days).
• Monitor regulatory signals (AI/IP bills, major court rulings) over the next 6–24 months — if a restrictive outcome occurs (materiality threshold: >10% expected increase in licensing costs), shift portfolio toward catalog owners (NFLX/DIS) and increase hedge sizing.