Needless to say, 2020 has been a dismal year for theaters. We now know that at least the first half of 2021 will remain so. And more, with the latest news on how Disney Plus continues to shorten distribution windows.
The coronavirus forced most countries to shut down their theaters, sparking a chain reaction that ended with the creation of many studios – the ones that would go theatrically – directly on OTT services or streaming platforms.
After some pioneers, Disney was the first Major who hit hard with the launch of Mulan on Disney Plus for an additional 24 euros / 30 dollars.
Since then, Disney has continued to bet in this manner, also playing with the direct release formula with no additional payout (as happened with Soul Yes Hamilton). Now he will try a third modality with the first of Raya and the last dragon, What arrives at the same time in theaters and Disney Plus, but, again, with an additional payment.
Windows squinting with Disney
Added to this is a piece of news that we learned this week. Nomadland, Chloé Zhao’s film awarded at the Golden Globeswill arrive at Disney Plus – in its Star brand in Spain – just five weeks after its theatrical release and at no additional cost.
The game involvesstrengthen the model in which the first window – historically cinema – is no longer shortened, something that can have important synergies for the future of the industry, and of course very bad news for theaters.
Nomadland -distributed by Searchlight, acquired with the FOX package in 2018 by Disney- is definitely part of the Disney offer that could test theaters, but due to the current situation, and the launch of Star, it seems the decision was obvious .
The economics of distribution, also tested
But shortening the theatrical performance is also drastically disrupting the industry-wide method of income distribution. The theaters, although it changes according to the markets, remained at the beginning of the screening of a film with 60% of the revenues it obtained. When you switch to other windows (digital rental, DVD, cable TV, free TV or digital subscription) the percentage of the distributor’s income is higher.
Until not long ago – a pandemic through – digital subscription distribution was the last, but it has grown strongly due to the situation. And Disney is taking advantage. Both when it cedes the broadcasting rights on other platforms – where it retains 80% of it, as if it were in DVD format – and in the case of its own (Disney Plus), where it practically has to bear only management fees. In a few words, Releasing a movie from your property on Disney Plus inexpensively. Of course, he also loses opportunities.
Date of high on disney plus now and save with the annual subscription, with which you can enjoy its entire catalog of series and films. He understands unlimited access to all premieres already Star. To Marvel and Star Wars content, and great animated films from Pixar.
In case of Mulan, at a cost of $ 300 millionIt could easily have been salvaged if it had been shown in theaters. Because the cinema also serves as a catalyst for the rest of the windows. Few people can now fuel DVD sales or offer free TV broadcast rights when a movie is already on Disney Plus.
Bob Chapek changes his talk about consumption at home
This is particularly relevant in the case of Disney, which in 2019, the last pre-COVID year, starred in the top 10 box office premieres and had End of Game the highest grossing film of all time.
Perhaps that’s why Disney CEO Bob Chapek tried in December to point out that the cinema showcase will always stay there. “We had a $ 13 billion box office last year (2019), and that’s not something to be overlooked. “.
However, this week Chapek was more open to signaling a trend change. “Consumers are probably more impatient than they have ever been, especially since they have now allowed themselves the luxury of having titles at home practically whenever they want,” he said. he said at a Morgan Stanley technology and media conference. “I’m not sure there is a return. “
“Of course, we don’t want to do anything like chopping off the legs of a movie theater. But the old approach, in which a film could be out of theaters and still not available for viewing at home, is no longer viable ” , did he declare.
I said, by shortening the time between windows, it looks like this will be the new normal. The question remains how many weeks will they stay exclusively in theaters when normalcy returns.
Black Widow could be the definitive case
Disney’s bet so far seems to have worked out well, at least when it comes to its streaming platform. A few weeks ago, at their investor conference, they announced that had exceeded 94 million subscribers worldwide, exceeding the forecasts set for the coming years.
Know how much of this is attributable to new registrations for these premieres or to the resonance of such series such as The Mandalorian or more recently Wandavision it is complicated. Although, based on Disney data, it appears that at least Soul Yes Hamilton yes, they pushed that number. With Mulan, theatrically released in China and with a high production cost, there are more doubts.
The next big turning point will surely be Black Widow, whose delayed release is now scheduled for May. Will Disney also dare to leave it out of theaters to pass it off as an additional payment on Disney Plus? Of course, with moves like HBO Max’s in the US, it doesn’t seem so far-fetched.
The decision is surely based on how they believe the pandemic may still impact the influx of theaters despite being one of the most anticipated premieres. But gradually, Disney has more data to know how profitable it is to shorten the window of the cinema with its blockbusters. Something which, if positive, could forever change the way the audiovisual market showcases work.