“The consumer is probably more impatient than they’ve ever been before,” he said of the market shifts during Covid-19, “particularly since now they’ve had the luxury of an entire year of getting titles at home pretty much when they want them. So, I’m not sure there’s going back. But we certainly don’t want to do anything like cut the legs off a theatrical exhibition run.” Moviegoers, he added, won’t “have much of a tolerance for a title, say, being out of theatrical for months” and “just sort of sitting there, gathering dust” before migrating to streaming or other windows.
Chapek made the comments at a virtual investment conference hosted by Morgan Stanley. It was one of his few appearances outside of an official corporate function since becoming CEO about a year ago.
During that brutal year, of course, Hollywood has contended with an existential crisis in the form of Covid-19. The virus decimated the box office and has left only 45% of North American theaters able to function more than a year into the pandemic. Total domestic box office of $11.4 billion in 2019 won’t likely be equaled until 2022 or 2023, most analysts believe.
For Disney, which controls up to half the market and has released top blockbusters under the Marvel and Star Wars banners, it is not a casual decision about how long to play films in theaters. Chapek noted that a middle path — the “Premier Access” simultaneous deployment of streaming and theaters — would remain a distribution option for the foreseeable future. On Friday, animated feature Raya and the Last Dragon will go out via that method, costing $30 to subscribers to Disney+.
No specific number of days in release was bandied about by Chapek or moderator Benjamin Swinburne, a media analyst at Morgan Stanley. Among other major studios, Warner Bros has done away with theatrical exclusives altogether, while Paramount and Universal have either shrunk or announced plans to shrink the usual window from 74 days to more like 30 or 45. As he has in other public settings, Chapek noted the company’s 11 billion-dollar-grossing theatrical releases in 2019. “That is a big deal to us, and that will continue to be a big deal to us,” he said. At the same time, “We realize that this is a very fluid situation.”
Addressing the streaming business more broadly, Chapek said “four-quadrant appeal” has played a key role in the dynamic growth of Disney+. Since its launch in November 2019, it is almost at 100 million subscribers in several dozen countries and is projected to clear 200 million over the next three years. Chapek said the fact that 50% of its subscribers globally do not have kids was a key driver and an unexpected one.
“What we didn’t realize was the non-family appeal that a service like Disney+ would have,” he said. “That is the big difference.”
As to the rest of the company’s streaming portfolio, Chapek said its most recent addition, Star, will feature a lot of local-language programming. The non-U.S. general entertainment service, which began its global rollout last week, will have 50 original series by fiscal 2024, the exec said.
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