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Why Disney+ Made Sense for ‘Soul’ and ‘The Croods’ Could Be Next to Move

As "Soul" skips domestic theaters in favor of Disney+, the potential implications include Universal moving "The Croods" to PVOD.

Soul

“Soul”

Disney/Pixar

When Disney announced that Pixar’s “Soul” would vacate its November 20 theatrical release and debut on Disney+ December 25 was not a surprise. Theaters, particularly in the U.S., are shaky, and more so after Regal shut down nearly all of their domestic locations this weekend.

The surprise is it will premiere as a regular offering on Disney+ rather than go the “Mulan” route and make it a Premium VOD extra for subscribers. Here’s why they did this, and what this could mean:

Disney is wary of opening top films in theaters

The majority of U.S. theaters reopened, but no films of note following “Tenet.” After “No Time to Die” moved to April, “Soul” on November 20 would have been the first. That would have made it a kind of “Tenet” sequel — a second chance to jumpstart the business. However, as when they moved “Mulan” to stream, the approach is the same for “Soul”: Let someone else go first.

(third from left) Delta Dawn (Kelly Clarkson) in DreamWorks Animation's "Trolls World Tour," directed by Walt Dohrn.

“Trolls World Tour”

DreamWorks Animation

Family films do well on PVOD

With “Trolls World Tour,” Universal likely has collected well over $100 million in their share of revenues from domestic PVOD. “Scoob!” for Warner Bros., a less expensive film, also did well. The pricey “Mulan” may not be as profitable, if it even breaks even, but at $29.99 it may have brought in the most revenue. Meanwhile, there’s no indication that family audiences will return to theaters next month in sufficient numbers. “Soul” is more likely to get more attention at home.

Why no extra charge?

The future in home viewing lies in PVOD and in subscription; “Mulan” is unique in that it tried both. PVOD is a rival system to subscription platforms, to which Disney has made a multi-billion commitment. With that in mind, why create an upcharge that promotes the alternative? Just as it brought “Hamilton” to debut on Disney+ this summer, streamers need grade-A fresh content to retain and add subscribers. E

DreamWorks

Competition with “Croods: A New Age” 

Universal’s sequel to their 2013 worldwide animated hit “The Croods” (domestic gross $200 million+ adjusted) is set to open in theaters November 25, five days after the previously planned “Soul” date. However, “Croods” is also expected to debut on PVOD December 23. With “Soul” on Disney+ for no extra cost, that is a potential problem for “Croods” (which expected to cost $19.99). Expect competitive gamesmanship to follow.

Universal’s deal with AMC guarantees nationwide play for “Croods,” but is that deal so firm that the studio has to stick with theaters? It certainly helps that they no longer are competing in theaters head to head, but will the PVOD play matters more?

Here’s where the dominos could start falling. With “No Time to Die” and “Soul” gone, what impact will that have on still-open theaters? AMC and Cinemark have said they plan to stay open, but we can assume their plans are flexible; they have to be. They will look for hopeful signs in the performance of 101’s comedy “The War on Grandpa” — the first significant wide release  since “Tenet.”  Staying open also may encourage Warner Bros. to keep “Wonder Woman 1984” on December 18, along with other titles still scheduled for Christmas.

Both Universal’s “Freaky” (November 13) and “Croods” are offered to theaters with PVOD windows three and four weeks later, respectively. If most major circuits agree (including a reopened Regal), Universal has incentive to keep the theatrical dates. If others don’t, and/or Regal stays closed, does Universal have the option of a Thanksgiving PVOD?

If so, that would seem likely. It would be consistent with a common move of every major distributor since March (“Tenet” the stand out): When in doubt, take the non-theatrical alternative.

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