Once a demon slayer, always a demon slayer. Or at least, that’s the hope.
Sony Pictures is in talks with Netflix to make an animated sequel to KPop Demon Hunters, sources tell The Hollywood Reporter. The fantasy musical has turned into the sort of cultural sensation every Hollywood studio or streamer tries to hunt down, even at great expense, but rarely finds.
The events of the past few days — including Netflix dropping a surprise sing-along version of the Sony Pictures Animation film in theaters over the Aug. 22-24 weekend, or Demon Hunter becoming the most-watched English-language film of all time on the streamer — are reigniting the debate as to whether Sony’s film empire gave away the keys to the kingdom in 2021 when handing the movie over to Netflix to release, versus bankrolling a big-budget theatrical title on its own from a first-time feature director (Maggie Kang) with no major stars.
More often than not, box office observers and rival studio execs say Sony made the safe and even the right call, considering that original animation is on a downward spiral at the box office in the post-pandemic era (known animated IP fares better). Even Pixar isn’t immune. This summer, Elio, also an original story, opened to $21 million, the worst debut in the history of the storied animation studio founded by Steve Jobs and later sold to Disney. Elio topped out at $73 million domestically and $152 million globally against a net budget of $150 million before a major marketing spend (ouch).
Some say Sony should have held out and taken the full-blown theatrical route, even if it was a financial risk. “It was certainly a mistake for Sony to give it up,” says one insider on the exhibitor side. “Sounds like this was new IP, they didn’t think it would land and was just bad luck for them.”
But there’s a silver lining: When it comes to profit margins, a studio hopes for a range of 10 percent to 12 percent. In the case of Demon Hunters, Sony could be looking at 20 percent to 30 percent.
The deal for the first Demon Hunters — which was part of a larger, multi-title pact struck during the depths of the pandemic in 2021 — saw Netflix agreeing to cover the film’s entire $100 million budget in addition to paying Sony a fee of $25 million, or 25 percent of the budget and certain other costs. Sony also receives a piece of soundtrack sales, as well as music publishing fees for certain songs. Merchandising rights, however, are off limits to the studio.
On Tuesday, Netflix announced that KPop now ranks No. 1 on the list of most-watched English-language films with 236 million total views, ahead of previous crownholder Red Notice, starring Dwayne Johnson, Ryan Reynolds and Gal Gadot. That’s quite a feat for a film such as KPop that’s a two-quadrant movie targeting families and females 25 and younger. (Netflix’s all-time top 10 list is based on views in a title’s first 91 days of release.)
And the film’s soundtrack now holds the distinction of being the first to have four simultaneous Top 10 hits on the Billboard Hot 100, led by Huntrix’s “Golden.”
Sony also gets a portion of the money Netflix is paying Sony’s animation company Imageworks, home of the visually groundbreaking, Oscar-winning Spider-Verse films (like Spider-Verse, an Oscar campaign is being planned for Demon Hunters).
For the deep-pocketed Netflix, the victory of Demon Hunters is sizeable, and underscores the importance of keeping kids and families happy as part of its overall strategy to keep subs satiated, which is Netflix’s top concern. One source says kids are watching Demon Hunters again and again, or six to eight times on average (for some, it’s more).
Insiders on both sides say the Sony-Netflix partnership has gone smoothly (although of course they would say that). It is true there was a built-in bond: Netflix animation head Hannah Minghella worked for years at Sony, including with now-Sony animation head Kristine Belson. In a recent statement to THR, Netflix head of film Dan Lin went out of his way to give a shout out to Sony, saying that he and Minghella are “thrilled to be supporting” Kang and co-director Chris Appelhans “and Kristine Belson and her team at Sony Animation” as their studio partner.
In the same exchange with THR, Lin noted that Netflix allows its films to build an audience organically and over time. That’s a luxury theater owners can’t afford to offer if a film has a sluggish start. “As word of mouth spread and social media caught on, we saw viewing really take off and the movie became a cultural phenomenon — it’s one of the only films to grow its audiences in its fifth and six weeks of release,” Lin said.
Kang and Appelhans have spoken in the broadest of strokes about a possible sequel. But the more pressing issue is arriving at a deal between Sony and Netflix. Put another way — Netflix cannot make a sequel without Sony, and Sony cannot make a sequel without Netflix.
Stay tuned.
