2020 has been a bad year for the cinema industry, and Disney may help to drive another nail in the coffin. The company announced that the film would available in the US on its streaming service, Disney+, from 4 September for a rental price of $29.99. Although plans have not been confirmed for the UK, it is understood that the same situation will apply, and the decision has gone down poorly. Many cinemas were hoping that the film would be one of the blockbusters to help bring the industry back to life – with a strategic move like this, Disney is effectively turning the lights out.
For years, cinemas have operated on an exclusivity window – they get to show the film for a period of a few months first, before it is released anyway else. This results in a tiny amount of profit for the cinemas, which is bumped up by snacks and drinks. This is why there was such an uproar in May, when Universal released Trolls World Tour on streaming. If the film was profitable, and other studios followed suit, the cinema’s business model would collapse. It was widely believed that Disney, which made $13.2 billion in ticket sales last year, would be the last studio to go digital – now, that security is gone.
With a strategic move like this, Disney is effectively turning the lights out
Phil Clapp, chief executive of the UK Cinema Association, said: “With cinemas across the UK now continuing to re-open and welcome back their customers, the decision by Walt Disney Studios yesterday to put Mulan on their Disney+ service and not into cinemas will be seen by many as hugely disappointing and mistimed. For many this will seem step backwards rather than forward. Rather than playing a great new family film in the best place possible to see it, the cinema theatre, audiences are instead being encouraged to stay home and pay a premium price to watch it.”
Some analysts believe that, despite the pandemic facilitating a turn to streaming, it’s hugely unlikely that the summer blockbuster season will go. Richard Broughton, an analyst at Ampere, said: “It makes sense during the lockdown to experiment when there is pretty much no box office performance for a film to achieve. The straight-to-digital strategy may make sense for smaller titles, but it doesn’t for blockbuster films when cinemas reopen properly, even if the theatrical market is depressed next year.”
It’s certainly true that many studios have chosen to push films back, rather than go digital. No Time to Die, Wonder Woman 1984 and the next Fast & Furious film are all waiting for a profitable global cinema release. Christopher Nolan is insistent that Tenet comes out in cinemas. But most of these studios aren’t Disney, with a massive streaming infrastructure in place. Disney+ has long passed 60 million subscribers, four years ahead of internal projections, and it’s expected that the release of Mulan will drive those numbers higher. If Disney limits its big releases to streaming, there’s a huge incentive for people to subscribe.
Disney has tried to downplay the move, but the reaction has been considerable
Bob Chapek, Disney’s new chief executive, told investors that the release of Mulan was a “one-off”, and not a permanent strategic shift. However, he said that it would be a valuable experiment to find out how much the film increased subscriber numbers and global revenue (Disney gets a much greater cut of revenue on streaming than it does at the box office). There are already rumours that, if Mulan proves a success, Black Widow may then be released on Disney+ too.
Disney has tried to downplay the move, but the reaction has been considerable. Empire said that the release was “potentially devastating news for theatre chains and us, the moviegoing public”, while The Telegraph said Disney was “behaving as though it wants our cinemas to die”. Disney has reportedly sent a letter to UK cinema operators apologising for the decision, but apologies do little for an industry struggling to survive. I said in May that the release of Trolls World Tour is unlikely to be the end of cinemas – if Disney gives up on them, however, the industry doesn’t have a hope.