CEO Chapek: Disney to Remain Flexible on Theatrical/PVOD Window

With the theatrical market slowly emerging from the pandemic era, Disney remains unconvinced about a return to the theatrical-first distribution model for original movies.

Speaking Nov. 10 on the company’s fiscal call, CEO Bob Chapek said that while the pandemic appears to be slowing, consumer attitudes toward the consumption of movies has changed. In the fiscal year, Disney released two theatrical titles, Black Widow and Jungle Cruise, concurrently on its $19.99 Premier Access premium VOD platform. That compared with Mulan, Disney’s first PVOD release, in the previous-year period. Widow generated $60 million in PVOD revenue in the movie’s opening weekend, the only film for which Disney has publicly disclosed PVOD sales.

“We had a number of titles released going to theatrical that will eventually go to Disney+, [and] what we’re seeing is some recovery of the theatrical exhibition market, which is a good thing,” Chapek said.

At the same time, the executive said the company is watching “very, very carefully” different types of movies, including family films, to see how different age demos react to theatrical releases and come back to theaters.

Of the top 12 movies at the domestic box office this year thus far, five are Disney titles, including No. 1 in ticket sales: Shang-Chi and the Legend of the Ten Rings, with $224 million in revenue ($430 million globally). The movie was not released concurrently on PVOD.

“We’re sticking with our plan of flexibility,” Chapek said. “We’re still unsure how the market place is going to react when family films come back with a theatrical-first window.”

He said theatrical movies released this have had a “fairly short” theatrical window in regards to the legacy window period.

“We’re doing that so we can get our films quicker to Disney+, but at the same time see if the theatrical market can kick back into full gear as we prime the pump with [new releases],” Chapek said, adding the studio would announce distribution on a title-by-title basis.

“We’re in kind of a flux and change, still,” he said. “While COVID will be in the rearview mirror, God willing, I think change in consumer behavior is going to be more permanent. So, we’re reading that on a weekly basis.”

Whether that “reading” includes more Premier Access releases and shorter windows from the already abbreviated 45-day exclusive exhibition period will depend on market conditions. The days of coddling exhibitors would appear over at Disney.

“We’re going to do what’s best for our shareholders, ultimately,” Chapek said.

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