Yesterday’s announcement by Disney that the highly-anticipated blockbuster “Mulan” would forgo North American theaters and debut straight on the studio’s own streaming service was shocking, to say the least. Unlike Universal, which has publicly talked about needing to change the way theaters do business (and striking a controversial deal with AMC Theatres in the process), Disney has consistently sided with cinemas and the theatrical window. But with “Mulan,” it would appear the Mouse House is ready to do something very different. And as you might expect, cinema owners aren’t very happy.
For those unaware, the release of “Mulan” varies greatly from what Universal did with “Trolls World Tour” and what other studios have done with selling films to streaming services instead of hitting theaters during the pandemic. When “Trolls World Tour” arrived on PVOD in April, the thought was the film would eventually play in select theaters when they reopen, and the film would eventually have a small theatrical run. But it was clear Universal just used the film to test the PVOD waters, while also making sure cinemas got a cut eventually. Disney is doing something very different.
Instead of arriving on PVOD and in theaters, “Mulan” is heading for Disney+ (owned and operated by the studio) and will carry an additional fee of $30 (100% of which goes to Disney and isn’t shared by VOD providers or theaters). And though CEO Bob Chapek called the “Mulan” release a “one-off,” it’s clear that the technology developed to make this happen is more of a trial run to see if the studio can make a profit on PVOD and cut out the theatrical middleman.
Speaking to Deadline, one owner of a smaller cinema chain spoke to the outlet about the move by Disney. And in no uncertain terms, the theater owner was worried about the precedent this might set.
“This is a death blow to theaters — did we just lose Disney as a provider?” explained one anonymous theater chain boss. “Think about this, every exhibitor has to readjust and start over with everything in their rental deals. If all of the studios are going PVOD, we have to negotiate our terms by occupancy rates; R-rated movies will no longer play at 10 a.m., they’ll play at 7 p.m. and 10 p.m. We’ve just become a destination restaurant that has an upper level of entertainment. If you’re a mall 20-plex theater — you’re toast.”
And it’s not just US theaters that are affected by this. The decision to release “Mulan” on Disney+ is happening around the world, particularly in places where cinemas are struggling to reopen, such as in the UK. In a tweet from Kevin Markwick, who owns a cinema in the UK, the decision to release “Mulan” on streaming is just as hurtful.
“Thanks Disney chums, we’ll be here warm & waiting for you when you plan to return, having existed on thin air and love & cuddles and happy thoughts,” he tweeted. “Just give us a buzz when you are ready. I’ll be sleeping in a doorway outside the bank soaked in my own wee.”
The question that remains (and can’t be answered at this point) is what exactly the release of “Mulan” means for the future of the industry? Again, with that $30 per rental going straight into the pockets of Disney and the studio already acknowledging it has a subscriber base of 60+ million, it doesn’t take much for the film to earn quite a bit of cash. If 10 million subs buy “Mulan,” that’s $300 million in revenue for Disney. And if 50% buy the film, that’s a whopping $900 million. Obviously, a 50% buy-in for “Mulan” is pretty optimistic, to say the least, but with how well Disney markets its film offerings, it’s not a completely unrealistic option.
Needless to say, all eyes are on “Mulan” and its September 4 release. Could we witness Disney take the first shot in a big war with theaters or will it be much ado about nothing? We’ll find out.