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Disney Hints at a Shifting Theatrical Strategy, but Not on VOD

The company isn't ready to smash any windows yet, but CEO Bob Chapek hinted that theatrical releases may be less important in the future.

Colin Ferrell and Ferdia Shaw in "Artemis Fowl"

Colin Farrell and Ferdia Shaw in “Artemis Fowl”


Nobody does tentpoles like Disney. But now the studio synonymous with franchise titles is hinting that it may rethink its theatrical mindset and send more first-run titles to Disney+.

During the company’s mixed Q2 earnings call Tuesday, CEO Bob Chapek offered this answer when asked if the company was considering PVOD as a means to boost revenue while theaters are closed:

“We very much believe in the value of the theatrical experience overall to launch blockbuster movies, as you know we had seven billion-dollar films in calendar year ’19,” he said. “But we also realized that either because of changing and evolving consumer dynamics, or because of certain situations like COVID, we may have to make some changes to that overall strategy, just because theaters aren’t open or aren’t open to the extent that anybody needs to be financially viable.”

On the one hand, his answer is clear: Because the coronavirus outbreak has forced theaters to close, Disney is reevaluating its film-release plans. Like how the company is now releasing Kenneth Branagh’s “Artemis Fowl” YA adaptation on Disney+ on June 12, rather than in theaters as originally planned, following the outbreak. (That move was “based on the demographic” of the service, Chapek said.)

But Chapek’s answer was also pretty vague — exactly what “changing and evolving consumer dynamics,” other than those spurred by the coronavirus, does Disney have in mind to inform its strategy?

“We’re going to evaluate each one of our movies on a case by case situation, as we are doing with this coronavirus situation,” he said. “All our other tentpole movies have been rescheduled theatrically for later in the year, so we very much believe in the power of that launch platform for our big movies.”

After nearly every theater in the US — and across most of the world — has been closed for going on two months, the first cinemas are beginning to reopen in Texas. The big chains are taking a wait-and-see approach, with NATO previously hoping for reopening to begin in earnest by the end of May.

As Disney readies to release the first three movies on its calendar — “Mulan” on July 24, “The Empty Man” August 7, and “The One and Only Ivan” on August 14 — it’s looking increasingly likely that audiences just won’t be able to show up en masse, due to a patchwork of opened and closed theaters, auditorium caps, and a possible lack of comfort among the population concerned about the threat of infection.

Those three films, then, could serve as test balloons to the question of financial viability in a post-lockdown theatrical world. The crown jewel of Disney’s 2020 calendar, “Black Widow,” isn’t dated until November 6, which would place it in what some in the industry are expecting to be a summer blockbuster season shifted to the fall. But what happens if the $200-million “Mulan” bombs?

“Black Widow” will be Disney’s first Marvel release since “Avengers: Endgame,” which went on to become the highest-grossing film of all time with $2.8 billion in returns. It’s hard to imagine Disney walking away from that kind of profit possibility only to release “Black Widow” on Disney+, which is already stocked with a cadre of MCU titles and upcoming new ones, including the Nick Fury series “Fury Files,” dropping May 15.

One thing is more certain: Disney seems uninterested in PVOD. After Universal’s $20 “Trolls World Tour” rental experiment was enormously successful, the studio found itself in a war with AMC and Regal after suggesting it would begin releasing first-run movies in theaters and on-demand.

For Disney, the choice is either theatrical or Disney+. While theaters need Disney tentpole-grosses more than the studio needs them, Chapek’s vagueness was a carefully calculated response to avoid adding Disney to the list of combatants in the theater-studio war.

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