Disney Says More Movie Releases Could Skip Theaters, Sees “Some Changes” To Release Strategy During And After COVID-19

Mulan Yifei Liu #BoycottMulan

Disney CEO Bob Chapek praised theatrical moviegoing during the company’s earnings call Tuesday, but said “case by case” decisions on how films roll out will be made during the COVID-19 pandemic and beyond.

“We very much believe in the value of the theatrical experience,” he said in discussing Disney’s fiscal second quarter. “But we also believe that either because of changing and evolving consumer dynamics or because of certain situations like COVID, we may have to make some changes to that overall strategy. … We’re going to evaluate each of our movies as a case-by-case situation, as we are doing during this coronavirus situation.”

He cited the release of Artemis Fowl, which is heading directly to Disney+ streaming in June without first playing in theaters due to its “demographic appeal” on the streaming service. Major tentpole releases for the rest of 2020 have all been pushed back in order to try to take advantage of the “power” of theaters as a revenue driver, Chapek noted. Mulan, which was pushed once already, is slated to test the waters on July 24, though the outlook is highly uncertain.

In 2019, Disney made about $13 billion in global box office receipts, sharing roughly half of it with exhibitors. Releasing films directly to consumers, by contrast, would boost margins, but the well-oiled marketing machine built up over the decades has been optimized by Disney in recent years. A change to the first release window would have a dramatic effect on other revenue pegged to box office. Still, rivals like NBCUniversal and WarnerMedia have also talked about re-examining the traditional 90-day theatrical window in light of their own streaming efforts, plus the economic and societal toll of COVID-19.

Chapek’s sentiments during his first time on the Wall Street hot seat since becoming CEO in February, were not as provocative as those offered by NBCUniversal CEO Jeff Shell. After Universal’s Trolls World Tour bypassed theaters, Shell publicly clashed with AMC and other major theater owners. Even so, by the company’s usual custom of offering only sweetness and light about movie theaters, Chapek’s remarks seemed capable of unsettling exhibitors, who already face a perilous future.

Disney, which subsumed the Fox film pipeline last year, controls a huge chunk of the theatrical marketplace, with market share in North America of at least 40%. Because of the scale and economic model of its release slate — with seven of its 2019 titles clearing $1 billion at the global box office, circumventing theaters doesn’t make economic sense. Migrating titles costing hundreds of millions to $7-a-month Disney+ isn’t a tradeoff that would work anytime soon.

As to what kind of climate will greet the release of Mulan, “We’re going to get a pretty good idea about that because there’s a competitive movie that opens up one week before ours,” Chapek said, referring to Warner Bros.’ Tenet. “At that point, we’re hoping that there’s some return to some semblance of normal in terms of the number of screens that are opening and the number of showtimes. … Our fingers are crossed.”

There has “got to be incredible pent-up demand” for moviegoing, the CEO added.

This article was printed from https://deadline.com/2020/05/disney-says-more-movie-releases-could-skip-theaters-vows-some-changes-to-release-strategy-amid-covid-19-crisis-1202926837/