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Disney's Mixed Release Experiment Nears Potential End With Mixed Results... For Now

Aug. 02, 2021 8:00 AM ETThe Walt Disney Company (DIS)CMCSA, T14 Comments


  • Disney is a company steeped in tradition and one generally steered by steady hands - it is also one that usually gets the last laugh when doubted.
  • Disney, along with AT&T (via WarnerMedia) has throughout the pandemic been the most consistent companies to adapt to this new streaming normal, but coming at it from different perspectives.
  • This weekend marks the end (for now) of Disney’s hybrid distribution strategy which has had its share of ups and downs, ranging from strong subscription plays to a surprising lawsuit.
  • Most of the attention has been focused on “Black Widow,” which scored the biggest theatrical debut since the pandemic started, but also raised questions around both profitability and profit sharing.
  • Recently Disney also used the approach with “Jungle Cruise,” which defied the doubters and over-performed domestically, but still has a sizable way to go to recoup its production budget.

World Premiere Of Disney"s Jungle Cruise
Jesse Grant/Getty Images Entertainment

This article was amended on 8/2/2021 to reflect minor clarifying adjustments.

Remember the old adage – “those who forget the past, are doomed to repeat it.”

While it wasn’t coined to relate to investors, it doesn’t

This article was written by

A long time entertainment industry professional, I have worked with a number of top Hollywood studios and networks. With over a decade in the field I use my in-depth knowledge of film and television to inform potential investors about the viability of the many upcoming projects in the industry. Questions? E-mail me at TheEntertainmentOracle[at]gmail.com.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (14)

Disney won’t give up on the theater release model completely (nor will they give up streaming). They have the data now to remember that the window exists to protect their content investment in the first place. They turned a billion dollar gross movie into a 500 million dollar movie with account sharing and piracy cannibalizing the profits week one of release as opposed to it months later. I think the only thing clear by the box office and the digital download drop off the next week after same day release is that the window needs to remain for movies with the bigger budgets even with the recovery still happening.

That’s weird that China is choosing not to release Disney’s latest content as it usually does quite well there. Maybe it’s because China has a huge state sponsored theater/home grown content industry to support and is quite familiar with the effects of digital piracy (they used to be responsible for nearly all early release shaky cam footage movies back in the day).

Just a guess though as I haven’t read any reason as to why they aren’t releasing those in that market…

Those digital numbers look good only when you remember that they always had those digital sales before the movie theater release. By releasing their movies same day they just shorten their own profit window.

Account sharing is so easy and common as is just straight up regular piracy. In some countries it’s almost a right of passage to bootleg movies. As in people are considered stupid if they actually pay for a movie.

It’s unreasonable to assume that this trend will stop growing anytime soon especially if we’re talking about the global scale of that piracy problem (is the internet getting any slower? Piracy will always be a problem with faster internet speeds)….the theaters will remain a place in the revenue picture and studios will compensate the shorter window with increased revshares (leading to lower ticket pricing) to compensate for any lack of attendance.
Movie theaters are slowly going the way of every other company eaten by tech. Small, boutique outfits that can be flexible and offer something unique will be around (or the big guys but they're going to have to scale down massively), for the hardcore movie goer, but outside that the industry is dying a slow death. COVID has just accelerated it. A similar comparison is that this exact situation is happening in the shopping mall space. The ones adapting, (in high income demographics mostly) are still doing well. The big theater companies will be joining the graveyard of Blockbuster, Circuit City, etc in the not too distant future. BTW I have no positions in theaters or DIS. Seems like common sense to me how this is going to play out as we have seen it play out multiple times with new tech.
This is the new reality: "what we’ve seen is the two systems have the potential to co-exist and audiences will pick what’s best for them."
The market for the two have some overlap, but it is far from a complete overlap. Many (myself included) consider streaming a new movie at home to be BETTER than going to a movie theater.
Panda Value profile picture
You are incorrectly assuming that every Disney+ stream was done here in the United States.

Your points still stand, but factually your numbers are likely too high.
The Entertainment Oracle profile picture
@Panda Value Yes - that's true. However most reports are the Disney+ streams were mostly US led. My point when seperating out domestic/intl was that there are multiple ways you can read/spin the numbers, plus intl numbers are still heavily skewed in one directon b/c neither film played in China (yet).

"Similar to Black Widow, the bulk of Disney+ Premier spend, I understand, is coming from the U.S. as our market is more accustomed to making purchases on the Disney+ streaming service, while offshore markets are still adopting."

Panda Value profile picture
@The Entertainment Oracle You can do some path. On Black Widow they gave enough details to estimate that $37M of the $60M was domestic. I wouldn't call that heavily skewed.
The Entertainment Oracle profile picture
@Panda Value Even if it was an even split, you are looking at $110 million domestic ($80m theaters + $30m streaming). The main point I was getting at is the argument against the streaming option was the film would have broken $90m/$100m at the box office without streaming, which means nothing to Disney or its investors b/c with streaming it broke the $100m mark and they got to keep the full revenue.
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