The Walt Disney Co.’s much-publicized toe-dipping into premium video-on-demand waters began Sept. 4 with the availability of the live-action Mulan remake on subscription streaming service Disney+. The movie, which costs a one-time $29.99 “Premier Access” fee in addition to the $6.99 monthly Disney+ subscription, will stream for free to subs on Dec. 4.
The movie is available via the Disney+ app on Google Play, Roku and Apple TV platforms. The title is also available through the app on Amazon Fire TV, the e-commerce behemoth confirmed Sept. 4. Once purchased, access to Mulan remains eternal “as as long as you are an active Disney Plus subscriber,” according to Disney.
Disney, a longtime supporter of the traditional theatrical release window, opted for PVOD distribution for the reported $200 million Mulan production after repeated theatrical delays due to the coronavirus pandemic. In making the announcement, Disney CEO Bob Chapek reiterated the company’s support for the box office going forward.
The movie will have limited theatrical distribution in regions without Disney+ access, including China.
“We’re looking at Mulan as a one-off, as opposed to saying there’s some new business windowing model that we’re looking at,” Chapek said last month on the company’s fiscal call.
Mulan, about a young female warrior (Yifei Liu) who disguises herself as a man in the Imperial Army in place of her ailing father, has received positive reviews, including 81% approval on Rotten Tomatoes.
Hollywood may be slowly going back to work as the coronavirus pandemic ebbs and flows across the country, but don’t expect a groundswell of content to be flooding distribution channels, including movie theaters and digital in the short term, according to Wedbush Securities analyst Michael Pachter.
Speaking Sept. 2 on the virtual OTT.X 2020 Summit, Pachter said studio and TV production across Hollywood has been at a standstill since mid-March due to the pandemic, which he said translates into exhibitors, pay-TV and over-the-top video distribution struggling to fill the void with fresh content.
At the same time, the analyst does not have high hopes for this weekend’s major new releases: Warner Bros.’ Tenet and Disney’s Mulan — the latter debuting Sept. 4 exclusively for $29.99 on “Premier Access” behind the Disney+ paywall.
Pachter said that despite AMC Theatres re-opening 70% of its domestic screens, COVID-19 worries among exhibitors will limit seating capacity, undermining the fiscal impact of Tenet from The Dark Knight director Christopher Nolan.
Pachter doubts the movie will generate more than $50 million at the weekend domestic box office, which begins Sept. 3. The film generated $53 million over a five-day (Aug. 26-30) period across 41 countries outside the U.S. and China.
The movie is projected to match last weekend’s international box office take with the movie opening in China, Russia, Serbia, Slovenia, Nigeria and Ghana. Domestic projections hover around $20 million.
The analyst said Tenet is getting distribution via 2,000 screens in the U.S., compared with 3,700 screens for Nolan’s most-recent major release, Dunkirk. Pachter said Tenet performed comparably to Dunkirk internationally, with the 2017 film generating $50 million its opening weekend in the U.S.
“Pent up consumer demand with 50% [social distancing seating] capacity and 60% of moviegoers afraid of dying [of COVID-19]. Yes, I think [Tenet] will be a [U.S. box office] embarrassment,” Pachter said.
Meanwhile, premium VOD, which has seen some studios (notably Universal Pictures) bypass theatrical distribution, delivering direct-to-consumer access to movies, generated a lot of attention after Universal’s Trolls World Tour sold more than $100 million digital transactions during the early days of the pandemic.
Disney, which has for years eschewed PVOD for the traditional theatrical window, surprisingly opted to distribute Mulan direct-to-consumer after the film’s repeated theatrical debut delays. Pachter questions how many consumers will opt to pay $30 for a movie they could arguably rent two months later for $5.99.
“Studios that are trying [PVOD] are just starting to figure out how a [direct-to-consumer] release impacts downstream revenue, and whether or not this will be worthwhile to use as a distribution method in the future,” the analyst said. “What may work well in the current [COVID-19] environment may not meet the same high-water marks in a normal environment. I think, generally speaking, most Disney films need the theatrical release to maximize profits, and I don’t see this changing.”
At the same time, the analyst remembered asking former Universal Pictures Home Entertainment boss Craig Kornblau why the studio didn’t offer a $30 monthly all-you-can-stream subscription plan similar to HBO.
“Why would we do that?,” Kornblau responded. “There aren’t that many movies.”
Pachter believes people would pay out of laziness, maybe watching 10 movies a month. But the analyst says studios are run by executives afraid of change and losing their jobs — not forward thinkers.
“That’s why guys like [new WarnerMedia CEO] Jason Kilar and [ex-TikTok boss] Kevin Mayer depart,” he said. “Maybe [Kilar will] convince AT&T CEO John Stankey to change.”
That said, Pachter has praise for upstart SVOD platform Disney+, saying the platform is inexpensive compared with Netflix and Amazon Prime Video, and filled with content suitable for the entire family. He projects Disney+ will reach 150 million subscribers, attracting lower-income households — driven in large part by the service’s catalog of more than 600 programs.
“Bundled together with ESPN+ and Hulu makes Disney+ a no brainer,” he said. “It’s wholesome content, Marvel stuff aside.”
As expected, Pachter has the most concern for Netflix in the COVID-19 era. A longtime bear on the SVOD pioneer, Pachter said Netflix is running out of original content.
“Netflix cannot stay on this hamster wheel without as much content as it had in the past,” he said. “Everybody that has content locked up will get [consumer] eyeballs. Netflix will lose eyeballs.”
With Disney’s inaugural premium VOD launch of the live-action remake Mulan set for Sept. 4, the movie reportedly could be available for free to Disney+ subscribers three months later on Dec. 4.
The later release date was observed on a screen shot for the movie’s $29.99 Premium Access purchase price in the United States on the Disney+ app and first reported by ScreenRant. The December date has subsequently been removed from the purchase link. Scuttlebutt has long suggested Mulan would not be available for free (with a Disney+ subscription) until 2021.
Disney earlier in August announced the controversial decision to forgo a theatrical debut for Mulan after repeated exhibitor re-opening delays prevented the $200 million budget movie from releasing. The title was initially slated to debut in theaters on March 27, then pushed back to July and again to this month before being removed from the release schedule. The movie will still have a theatrical presence in markets without Disney+ access.
While studios such as Universal Pictures have embraced PVOD and transactional VOD in response to the pandemic, Disney has steadfastly supported the 90-day theatrical window underscored by the studio’s global box dominance in recent years through Marvel Studios, Lucasfilm (Star Wars) and Pixar Animation titles.
The upcoming Sept. 4 premium VOD debut of much-delayed live-actioner Mulan is Disney’s first foray bypassing theatrical distribution for direct-to-consumer access. The movie, with a reported production/marketing budgets around $200 million and $100 million, respectively, is the most-expensive direct-to-consumer release ever.
In the U.S., Disney+ subscribers will be able to buy the movie from $29.99. Subs who access Disney+ via Apple, Google Play or Roku will be able to purchase the movie on those platforms as well. The price is 50% higher than the typical PVOD release.
Outside the U.S., Mulan costs £19.99 ($26.42) in the United Kingdom; €21.99 ($26) in Spain and Italy; $34.99 ($25.32) in Australia and $39.99 ($28.94) in New Zealand.
In France, Disney+ subs can watch Mulan for free — at an unspecified later date. Disney is making the movie available theatrically in select foreign markets without Disney+ and with re-opened cinemas.
Disney released the first Mulan in 1998 as an animated theatrical feature film, grossing $304 million worldwide. A direct-to-video sequel, Mulan II, was released in 2004. The new live-action movie is based on “The Ballad of Mulan,” about a young girl (Yifei Liu) who masquerades as a man to take her sick father’s place in the Imperial Army. It’s a story of a young woman who must test her inner fortitude to rise to the challenges of a warrior.
If Mulan proves a success with consumers and theaters remain off-putting, Disney could follow up offering Marvel’s Black Widow, starring Scarlett Johansson, and Marvel’s WandaVision in November and December, respectively, on Premium Access.
The Walt Disney Co. is a longtime champion of preserving the traditional theatrical window, eschewing industry efforts to push premium VOD in the home for new release movies.
As a result, the company’s decision to offer the live-action remake Mulan directly to consumers on Sept. 4 for $29.99 is a one-time bet requiring maximum distribution.
To that end, Disney will sell “premium access” to Mulan to Disney+ subscribers via Google Play, Apple and Roku. The move is significant considering that when CEO Bob Chapek first announced direct-to-consumer access to Mulan on the the company’s fiscal call, it was through Disney+ exclusively. Now Disney will share Mulan revenue with Apple, Roku and Google.
The move suggests Disney might be having difficulty convincing Disney+ subs to directly purchase the film on its app.
“Starting Sept. 4, with Premier Access, you can watch Mulan before it’s available to all Disney+ subscribers,” Disney said in its FAQ section. “Disney+ will offer Premier Access to Mulan for $29.99 on DisneyPlus.com and select platforms, including Apple, Google and Roku. Once you have Premier Access to Mulan, you can watch as many times as you want on any platform where Disney+ is available. Your access to Mulan will continue as long as you are an active Disney+ subscriber.”
The movie thus far is not available through Amazon Fire TV, Sony PlayStation and Microsoft Xbox, despite the platforms affording access to the Disney+ app.
NEWS ANALYSIS — With its live-action feature film Mulan delayed three times at the box office due to the ongoing coronavirus pandemic, and theaters not slated to re-open (maybe) until later this month, Disney had to act.
CEO Bob Chapek reached back to his home entertainment roots and went where former CEO Bob Iger never ventured: premium VOD. Chapek, former president of Walt Disney Studios Home Entertainment, announced Aug. 4 that Disney+ subscribers would be afforded exclusive in-home access to Mulan on Sept. 4 for $29.99. The movie will be released simultaneously in theaters in regions internationally that do not have access to Disney+.
In crossing the PVOD line in the sand with theaters, Chapek dealt a major short-term blow to exhibitors that have come to count on Disney movies to drive attendance and concession sales. It was just over a year ago that Disney’s market share of the domestic movie theaters reached 35% ($1.88 billion) — surpassing the next two studios combined.
With Avengers: Endgame, Aladdin,Toy Story 4, The Lion King and Sony Pictures’ Spider-Man: Far From Home (produced by Disney’s Marvel Studios), Disney reigned supreme at the box office. Previous attempts at jumpstarting PVOD had largely failed because Disney refused to join. The studio ended 2019 with seven movies each generating more than $1 billion at the global box office — a fiscal tally replicated in 2018.
“We have a studio that is doing extremely well and a [90-day release window] formula that is serving us really well in terms of its bottom line,” Iger said last November.
How times have changed. And for Chapek, upending traditional distribution business models is part of his legacy. As home video boss, Chapek championed the shrewd “Disney Vault” release strategy for its legacy animation titles. The studio would take specific DVD/Blu-ray Disc movies out of retail circulation and put them into the “vault” for months, thereby allowing the studio to re-sell the movies to starved hardcore fans, families and general consumers.
For Mulan, which reportedly has upwards of $300 million in production and marketing costs, going straight to home entertainment allows Chapek to test the PVOD waters while leaving the door open to theatrical.
“In order to meet the needs of consumers during this unpredictable period, we thought it was important to find alternative ways to bring this exceptional family-friendly film to them in a timely manner,” Chapek said. “We see this as an opportunity to bring this incredible film to a broad audience currently unable to go to movie theaters, while also further enhancing the value and attractiveness of a Disney+ subscription.”
Chapek said the Mulan PVOD release would be (for now) a one-off experiment, and Wedbush Securities media analyst Michael Pachter believes him.
“It really is that they can’t afford to do nothing and wait for theaters to re-open,” Pachter said. “It will be more problematic for Marvel stuff down the road.”
Facing a stagnant theatrical market due to the coronavirus pandemic, Disney is going all-in to accelerate content distribution to consumers in the home.
Following a letdown in third-quarter (ended June 27) new subscription video-on-demand subscribers, Disney CEO Bob Chapek Aug. 4 was quick to announce that branded SVOD service Disney+ topped 60 million paid subscribers through Aug. 3 since its launch on Nov. 12, 2019. The platform ended the fiscal third quarter (ended June 27) with 57.5 million subs.
Disney+ has added almost 6 million subs since May 4 when Disney chairman Bob Iger announced the platform had attracted 54.5 million paid subs. That compares with nearly 11 million net new subs for rival Netflix during a similar three-month period.
In another blow to besieged movie theater operators, Chapek said the studio is rejiggering distribution of original content, including sending erstwhile theatrical releases to consumer homes on premium video-on-demand via Disney+.
Disney, which has dominated the global box office in recent years, had until now avoided PVOD, repeatedly pledging solidarity with theatrical distribution. That mindset has apparently changed with Chapek, former head of the studio’s home entertainment business.
On the heels of early digital releases of Frozen II, Pixar Animation’s Onward, Star Wars: The Rise of Skywalker and Broadway adaptation Hamilton to Disney+, Chapek said the continued shutdown of movie production and theaters, coupled with favorable consumer response to PVOD and transactional VOD, has altered the company’s distribution strategies.
As a result, Disney+ subscribers in U.S., Australia, New Zealand, and select countries in Western Europe will have premium VOD access to live-action feature Mulan beginning Sept. 4, priced at $29.99 in the United States.
The movie will be simultaneously distributed theatrically in certain markets where there are no announced plans for Disney+ and cinemas are open to consumers.
“We see this as an opportunity to bring this incredible film to a broad audience currently unable to go to movie theaters,” he said. The former home video executive said the revised distribution strategy “further enhances a Disney+ subscription.”
“Given the rapid changes in consumer behavior, we believe it is more important than ever that we continue to grow our direct relationship with our customers,” Chapek said.
Disney, in a competitive challenge to Netflix and Amazon Prime Video, plans to launch an international direct-to-consumer general entertainment offering through its Indian Star brand in 2021. Chapek said the platform would be “rooted” in content Disney owns, including ABC Studios, Fox Television, FX, Freeform, 20th Century Studios and Searchlight.
“In many markets the offering will be fully integrated with our established Disney+ platform from both a marketing and technology perspective,” Chapek said. “It will be distributed under the Star brand,” which Disney acquired through its $71 billion purchase of 21st Century Fox Corp. in 2018.
“We see tremendous opportunity to the direct-to-consumer space,” Chapek said. “In light of the success we’ve achieved thus far with our global DTC business … we intend to take full advantage of that opportunity.”
Disney+ is set to continue global rollout in Scandinavia, Belgium, Luxembourg and Portugal in September, and Latin America in November. The company is also rolling out a hybrid Disney+Hotstar branded streaming service in Indonesia Sept.5.
“By yearend, Disney+ will be available in nine of the top 10 economies in the world,” Chapek said. The CEO said the success of Disney+, ESPN+, Hulu and Hulu with Live TV (combined 100 million subs) underscores the company’s focus on direct-to-consumer distribution.
“This is a reaffirmation of our [DTC] strategy … and to be more aggressive in our growth,” Chapek said.
Warner Bros. July 27 disclosed the tentative Sept. 3 re-scheduled theatrical release of Christopher Nolan’s espionage thriller Tenet, starring Robert Pattinson and John David Washington. The film is launching next month in 70 international territories.
The movie, along with Disney’s live-action Mulan, has been widely considered the studios and exhibitors’ path back to some normalcy at a domestic box office ravaged by the coronavirus pandemic shutdowns. Tenet was originally slated for July 15 and then continually delayed due to surges in virus infections across the country. Influx of new content into theaters would then follow with fresh home entertainment titles on digital and packaged media.
Aug. 26 — Belgium, Bulgaria, Croatia, Denmark, Egypt, Estonia, Finland, France, Holland, Hungary, Iceland, Indonesia, Italy, Korea, Latvia, Lithuania, Portugal, Serbia, Slovakia, Sweden, Switzerland, Turkey, Ukraine and the United Kingdom.
Aug. 27 — in Australia, Austria, Bahrain, Canada, Czech Republic, Germany, Greece, Hong Kong, Israel, Lebanon, Malaysia, Middle East, New Zealand, Poland, Saudi Arabia, Singapore, Taiwan, Thailand and the United Arab Emirates.
Aug. 28 — East Africa, Ghana, Nigeria, Norway, Romania, Slovenia, Spain, Vietnam; Sept. 3 in the U.S., Kuwait and Qatar.
Disney has pulled live-action Mulan from its theatrical slate, citing ongoing concerns with the coronavirus pandemic. Disney has not announced a replacement date. The move follows Warner Bros. yanking Christopher Nolan’s espionage thriller Tenet from its box office slate.
COVID-19 infections have now topped 4 million in the United States, according to Johns Hopkins University. AMC Theatres earlier July 23 announced it would delay re-opening 600 theaters in the U.S. until the middle of August from the previously-delayed July 30 date.
“Over the last few months, it’s become clear that nothing can be set in stone when it comes to how we release films during this global health crisis, and today that means pausing our release plans for Mulan as we assess how we can most effectively bring this film to audiences around the world,” Disney said in a media statement first reported by Variety.
Like Tenet, the latest delay for Mulan is the movie’s third, following separate pushbacks to July 24 and Aug. 21 from the film’s initial March 27 release date.
With Disney still slated to release Marvel’s Black Widow in November from its original May debut, further delaying the superhero movie to 2021 would result in the first year Disney has not released a Marvel title at the box office since 2009.
As expected, Walt Disney Studios June 26 announced it is delaying for the second time the theatrical release of live-action feature film Mulan to Aug. 21 from the movie’s previously-delayed debut on July 24. The film had been originally slated for March 27.
The big-budget remake of the 1998 animated movie that generated more than $300 million at the global box office is being pushed back due to a resurgence of coronavirus infections throughout the country, notably California, Texas and Florida.
“While the pandemic has changed our release plans for Mulan and we will continue to be flexible as conditions require, it has not changed our belief in the power of this film and its message of hope and perseverance. Director Niki Caro and our cast and crew have created a beautiful, epic, and moving film that is everything the cinematic experience should be, and that’s where we believe it belongs — on the world stage and the big screen for audiences around the globe to enjoy together,” Alan Horn, co-chairman and CCO, and Alan Bergman, co-chairman of The Walt Disney Studios, said in a joint statement.
The delay, coupled with Warner Bros. pushing back Christopher Nolan’s international espionage thriller Tenet to Aug. 12, is another setback for major exhibitors such as AMC Theatres, Regal Cinemas and Cinemark, which have staked much of their fiscal return on re-opening screens with new content.