BUSINESS
6:05 AM PDT 8/12/2020
due to
Pamela McClintock
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With an American theatrical release ruled out, the studio gambles with a Sept. debut on Disney + for the $ 200 million tin pole.
When Disney removed Mulan from the release calendar, the company tacitly acknowledged that it was bad to address a date when Americans could return to theaters. That decision set the stage for an even more dramatic move by Disney, which on August 4 said it would release the live-action remake on Disney + beginning September 4th.
Disney’s plan to sell Mulan for $ 29.99 for streamer customers in the US and other select countries, the film – whose release on big screens was delayed three times due to the new coronavirus and widespread cinema closures – makes it the center of premium video-on-demand revolution. Like Universal, which signed an unusual pact with AMC Theaters on July 28 to create a 17-day PVOD window, Disney is experimenting with top-speed pricing for home viewing as the pandemic wears off. “PVOD is sure to stay here,” sums up Screen Engine / ASI CEO Kevin Goetz. “COVID-19 is not responsible for the success of PVOD, it only accelerates the unmatched.”
In particular, theater owners were crushed when Disney CEO Bob Chapek de Mulan unveiled during the company’s fiscal third-quarter revenue call. (The company’s share rose more than 10 percent the day after the news, even though the conglomerate reported a loss of $ 4.7 billion during the period.) “We now have a bit of chaos in the exhibition sector due to the movement that Disney just made, “says Wall Street analyst Eric Handler of MKM Partners. “The studio for many years was the biggest fan of the theater window, and now they’re here with a big tent pole movie and they’ll be with Disney +.”
While Chapek told investors Mulan is a “one-off”, he also said it is a prime opportunity to test the appetite for PVOD. The Niki Caro-directed movie sent to the living room may have less to do with a $ 200 million profit on the tin pole than with Disney’s laser-like focus on growing Disney +, which has more than 60 million subscribers in just nine months has attracted a much less robust original release cadence than streaming leader Netflix.
Experimenting with PVOD makes sense for Disney, as it seeks to grow its streaming business, says Rosenblatt Securities analyst Bernie McTernan, adding that “they would not be able to turn this off if it were not for the coronavirus.”
Since the pandemic forced all U.S. theaters to close in mid-March, about 14 movies that would otherwise have had a traditional theatrical run have gone to PVOD, according to Screen Engine. Unlike gross tax, PVOD revenue is not reported, although Universal has revealed that Trolls World Tour earned $ 100 million in rentals in the first few weeks of the sequel in the US
So far, the cost of renting new titles – inclusive Trolls World Tour, Universal’s The King of Staten Island en Warner Bros. ‘ Scoob! – has been $ 19.99 for 48 hours. Mulan costs $ 10 more. One big difference: Those who pay will have access to it Mulan as long as they sign up for Disney +.
LightShed media analyst Rich Greenfield asks how many people will pay a premium to see Mulan upon release, especially since the film, which has a PG-13 rating, “sketches older” than other Disney titles, so the powerful can not appeal to families with young children. IN THR/ Morning Consult interview conducted on 6-10 August., However, indicates that there is question. Neidat Disney said Mulan went to the streamer, interest in seeing it among a nationally representative sample of 2,200 adults with 11 percentage points up compared to early June, when the film was still slated for a theatrical release. About 19 percent of Disney + subscribers said in the survey that they would be “very interested” in buying Mulan, with another 23 percent saying they would be “somewhat interested” in buying the title.
One benefit of the film’s debut on the Disney + platform for PVOD is that Disney can bypass marketplaces such as iTunes and Amazon Prime to keep more of the profits. While the revenue sharing for home entertainment is always more generous than one of the checkouts, studios that rely on digital retailers for their PVOD releases should forget about 20 percent of each rental.
Find out how Mulan must act on PVOD to break even is a complicated calculation given a number of factors, including the fact that the film will still play in some markets on the big screen – including China. Greenfield suggests that Mulan, if it were only a global PVOD release on Disney +, would have to sell 29 million units to equal $ 1 billion in worldwide gross cash. That estimate, however, excludes theatrical revenue from markets where it can play in cinemas; the benefit of signing up for new Disney + subscribers; and the potential for monetization by windowing Mulan on third-party PVOD platforms.
Handler points out that Disney’s announcement was not far behind, as it was after Universal unveiled its digital release plan for it. Trolls, but, he says, “If you’re an exhibitor, you should be afraid that Disney is using this as a test balloon.”
This story first appeared in the August 12 issue of The Hollywood Reporter magazine. Click here to subscribe.
