Just Stream It: Disney’s Stock Price Responds To Their Mulan Announcement

By Doug Norrie and Sofia Yang | 3 months ago

just stream it

Almost every major 2020 theatrical release still left on the calendar now exists in a state of delayed limbo. Hollywood is currently sitting on a ton of content, with movies scheduled for release now delayed for as much as a year and the next coming months without any big screens to project on. 

It’s led to two decidedly different outcomes in the world of big and small screen entertainment. Streaming services are reaching peak use highlighted and almost embodied by the viral sensation of Netflix’s Tiger King, a show I might be the only person in America to not have watched yet. This is just one cherry-picked example of how new streaming content is “valued” in our current climate. New and old content on these services are getting many more eyeballs than usual right now.

On the other end, movie studios are, by and large, taking the opposite approach. Almost every studio has chosen to shelve big upcoming box office films in favor of release dates way off in the future, or just indefinitely held for some later time.  But as time wears on, Hollywood is beginning to wake up to the idea that theaters may not come back and they may have to rework their model to cater entirely to streaming.

Disney Gives In To The #JustStreamIt Movement

In what can only be counted as a huge, huge victory for the #JustStreamIt movement, Disney has relented and decided to release Mulan on streaming platforms through Disney+.

Shortly after the announcement that Mulan would stop waiting for the pandemic to end and go direct to streaming, Disney saw an immediate impact on their stock price. It went up, it went up big time. They saw a 10% boost in their stock price after the announcement, a signal that investors are on board with the #JustStreamIt movement as a better path to profit than sitting on money makers and refusing to release them.

The movie had been slated as a theatrical release in the spring of 2020 but the Coronavirus shut down movie theaters before that could happen. Since then, Disney has been shuffling release dates and insisting they would only release Mulan as a theatrical film, but now that the COVID-19 epidemic seems basically endless they’ve been forced to give in and will indeed release Mulan direct to streaming on Disney+ September 4, 2020.

There is a catch though. Though Mulan will be on Disney+ it will not be free to Disney+ subscribers. To get access to the movie, in addition to a standard Disney+ subscription fee, you’ll have to pay an additional  $29.99 fee to rent Mulan. This is pretty much in line with a standard premium VOD rental fee being charged for other theatricals which have skipped theaters and released on platforms like Amazon Prime. The difference here is that Mulan is a much, much bigger movie than any of the others we’ve seen go direct to streaming in the COVID-19 pandemic.

It’s believed there will also be some sort of theatrical release for Mulan in the scant few locations where movie theaters are actually open, but that’s to be determined, and there are so few of them it’s largely irrelevant at this point.

For their part Disney insists this is a one off thing and that they will not release any of the other blockbusters the #JustStreamIt movement has been pushing them to release on streaming, like Black Widow. Don’t believe it. It was just a few weeks ago they were saying the same thing about Mulan. What this really is, is Disney testing the waters to see how well direct to streaming works. They’re about to find out, as studios like Universal have found out, that’s it’s just as profitable as a theatrical release (and in some cases moreso). And even if wasn’t, as the Coronavirus pandemic wears on and movie theaters go out of business, they’re going to have no choice.

Get ready, the #JustStreamIt movement has just scored its first of what are sure to be many victories. Hollywood is going streaming and this is the first big step.

How Fans Can Make #JustStreamIt Happen

This isn’t the time for the kick-the-can-down-the-road approach. This is the time to give fans what they want. As a fan, this is the time for you to make yourself heard. Use the links below to tell Hollywood’s movie studios what you want.

  • CLICK HERE to tell Marvel/Disney to release Black Widow streaming. #FreeBlackWidow
  • CLICK HERE to tell Warner Bros. to release Wonder Woman 1984 streaming.
  • CLICK HERE to tell Sony Pictures to release Ghostbusters: Afterlife streaming.
  • CLICK HERE to tell Paramount Pictures to release Top Gun: Maverick streaming.
  • CLICK HERE to tell Universal Pictures to stick it to AMC and release Fast & Furious 9 streaming right now!

Hollywood In Chaos

As the Coronavirus pandemic wears on with no end in sight, Hollywood is being thrown into chaos. Their hopes for things getting back to normal by the fall are rapidly evaporating as evidenced by the recent decision to pull Tenet from the release schedule without setting a new date for its debut. Analysts are now predicting there will be no new movies released in theaters until January of 2021 at the earliest and many suggest it may not be until the summer of 2021.

It’s not just a problem of releasing the content Hollywood already has, it’s also a problem of producing new content. Productions which were trying to resume shooting are now suspending as various states like California re-tighten their Coronavirus restrictions. And that means for you, the consumer, that in a couple of months even streaming providers like Netflix are going to run out of new content to show you… and they won’t have anymore for at least a year.

Right now insiders are claiming everything is in a total panic. Hollywood would like to start releasing some of the movies they already have finished on streaming as a stopgap way to make money. Meanwhile movie theaters are playing hardball and threatening bans and in some cases even lawsuits if they do so. Something has to give here and I suspect what will give is that at some point, Hollywood will start releasing their theatricals on streaming.

Indeed WB is reportedly planning to do just that. They’ve announced they will release Zack Snyder’s Justice League direct to HBO Max, and most believe this is just the first step towards releasing their bigger theatrical releases like Wonder Woman 1984 on HBO Max as well.

Those threats from movie theaters become less and less persuasive as a means to keep Hollywood from streaming their movies the longer things wear on. AMC has already told their employees to start preparing for them to go out of business. There seems to be virtually no way most movie theaters will be able to survive if they aren’t allowed to fully open until Summer of 2021. By then, those theaters will all be out of business. Given that, it makes no sense for Hollywood to listen to their demands since, they won’t be around to play Hollywood movies anyway. It seems that the big studio execs are slowly starting to realize this.

AMC And Universal Pictures Strike A Just Stream It Deal

In one of the most insane and self-destructive moves ever made by a national corporation, AMC Theaters announced on April 28, 2020 that they will no longer show movies owned by Universal Pictures. The move comes as a direct response to Universal admitting that by digitally releasing Trolls World Tour instead of waiting until theaters reopen from the Coronavirus pandemic, they made a lot of money. Predictably, AMC has now backed off on that threat and they’ve reached a deal with Universal.

That new deal between Universal and AMC is big news for the #JustStreamtIt movement, since it allows Universal to stream movies like Fast & Furious 9 without AMC throwing a fit. That’s the good news. The bad news is that as part of the deal they just agreed to with AMC, they can only stream those big movies 17 days after they’ve shown in an AMC Theater. Additionally, Universal (for some insane reason) will share revenue they earn from streaming their movies with AMC.

That’s a problem since AMC Theaters aren’t open in most parts of the country, and probably won’t be open there any time soon. Presumably the goal here is that Universal will let AMC show its movies in whatever theater it does have open, and then 17 days later stream it for the rest of the country where movie theaters aren’t open. So that means if you’re somewhere like Alabama you’ll get to see No Time To Die two weeks before anyone in California is allowed to.

It’s a step in the right direction, but it’s probably not a big enough step. It’s disappointing that Universal basically caved here and handed over a bunch of free money to AMC, money the probably didn’t deserve. And in the process, Universal screwed over the vast majority of movie fans who no longer have movie theaters they can go to.

Removing Awards Obstacles

Streaming
Ana de Armas in No Time To Die

One of the big obstacles preventing movie studios from skipping theaters and releasing them on streaming are the rules of various awards committees. Awards like the Golden Globes and the Oscars require movies to have screened in an actual movie theater in order to qualify for their award. That is now changing.

In response to the changes in the industry caused by COVID-19, the Golden Globes have announced that movies won’t actually have to screen in a theater in 2020. You just had to have had a release planned, but you don’t actually have to have shown the film. Basically any movie, regardless of where it premiered, can now qualify for a Golden Globe.

You might think being nominated for an award wouldn’t matter to big movies like Black Widow or No Time To Die anyway. It’s not like they were ever going to win best picture. But those movies do tend to win technical awards, and those awards matter greatly to studio marketing departments looking for excuses to get more people watching their films.

The Oscars have now followed suit and have also relaxed their rules to allow movies to skip theatrical release. The need to pander to awards is no longer a factor and movie studios are free to #JustStreamIt.

Hollywood Beginning To Rethink The Theater Model

Most recently WarnerMedia, the company that owns Warner Bros. studios, announced in an April 22, 2020 earnings call that they are “rethinking our theatrical model”. Elaborating COO John Stankey said of movie theaters, “Don’t expect that’s going to be a snap-back… I think that’s going to be something that we’re going to have to watch, the formation of consumer confidence, not just about going to movies, just in general about being back out in public.”

We’ve heard similar rumblings from sources inside Paramount Pictures. The same source which broke our now confirmed scoop about Star Trek: Pike tells us execs there are having similar internal discussions about rethinking the theater model. Specifically they’re wondering if they’d be better off releasing Top Gun: Maverick on streaming services over the summer rather than waiting and hoping audiences come back to theaters by its current December 2020 release date. They aren’t ready to pull the trigger yet, but Paramount may test the waters by releasing The SpongeBob Movie: Sponge on the Run direct to streaming in August.

It’s a start, but it’s a small start. It’s time Hollywood started making plans to release their biggest movies on streaming services, rather than delaying them until 2021. For those Hollywood execs trying to make up their minds, here’s why it’s time to #JustStreamIt

1. Make More Money Streaming

Streaming Trolls

There’s reason for hope that streaming service sales will begin to replicate and exceed box office numbers while also testing the market to see if this strategy will work for other movies. From a mathematical/monetary perspective, it’s an interesting gamble, but one that’s becoming less of a gamble.

Trolls World Tour was the first major theatrical release to abandon theaters and go straight to streaming. In only three weeks Trolls World Tour earned over $100 million in rental sales. The original Trolls movie only made $150 million total in the United States, and it took that movie five months to do it in movie theaters.

It’s also worth noting that Trolls World Tour is a terrible movie. It’s been widely panned by just about everyone and it’s objectively worse than the original. Yet thanks to video on demand, it’s turning a huge profit for Universal Pictures.

Considering, when movies are “rented” to theaters they derive around a 50-55% revenue split on average with the split grossly favoring the movie to start and ramping down over time. But if you consider the average cost of tickets for a family (and Trolls is a family flick) this rough $20 number probably works out in the studio’s favor if the actual viewing (purchasing) numbers replicated the number who’d walk into theaters. That last part is, of course, the big “if”. 

It’s a gamble, but as movies like Trolls World Tour test it out and find success, it’s becoming less of one. And at this point, waiting to release your movies is a gamble too (more on that in a minute). Releasing them on streaming might actually be the safer bet, between the two risks.

2. Audience Goodwill

Mulan streaming

I get that “audience goodwill” is a nebulous term meant to play on the kind hearts of viewers. I recognize that people don’t root for movie studios the same way they might for sports teams or even celebrities who’ve shown acts of generosity during this time. It’s unlikely most viewers even know the studios who bring them movies on a film-to-film basis (outside of maybe a Pixar flick).

So while it’s unlikely the goodwill extends beyond the initial watching, there are big-time press benefits to being first toward an industry shakeup centered around the consumer rather than the almighty dollar.  Those benefits will, in particular, go to the first movie studio to actually do it. The race is on to be first to release a major theatrical release on streaming platforms. You don’t want to be the last movie studio to give the audience what they want.

3. Content Starved Audiences Lead To Increased Viewership

Wonder Woman 1984 release

As Tiger King has “proven” folks are itching for new things to watch and new content to engage with as streaming services are taxed with big-time growth in time spent on platforms. Adding content now to streaming services, especially anticipated movies like Black Widow, would almost undoubtedly draw many new eyes from those who weren’t necessarily used to getting new releases this way.

Marvel fans have taken to the theaters in droves for more than a decade now and would prefer seeing these films on the big screen. But with that option gone, there’s definitely a market who would just choose to watch it at home because it’s “new”. People are starved for something to watch right now and for a movie like Black Widow or Ghostbusters: Afterlife that could mean an even bigger audience that it might have gotten were it merely released theatrically.

4. Chaos Is A Ladder

Afterlife release

Some streaming services are seeing this disruption as an opportunity. HBO has started the #StayHomeBoxOffice movement by offering some of the most popular content on its platform free for the next couple of weeks. SlingTV is giving out multi-week free trials while platforms like Hulu, Netflix and Showtime are also going free for 30 days.

While they are a bit different services than what movie studios would be offering with one-off purchases for movies, or in the case of Black Widow, streaming as part of Disney+, what it does speak to is others in the industry realizing folks are expanding quickly out of their traditional methods of watching content. I suspect it’s in large part because there’s a clear need for more options. Movie studios are literally sitting on these right now. 

5. An Overcrowded Release Schedule In Under-Crowded Theaters

Top Gun Maverick

Ask yourself a simple question that I’m sure movie studios are asking themselves right now, probably nervously: When is the next time you’ll feel comfortable going to a crowded movie theater? The answer likely ranges somewhere between “A long time from now” and “Never”.

That second piece has to have studios and the theaters themselves really quaking. Pushing a movie release even a year from now in no way guarantees flicks return to previous levels of profitability.

We’ve seen likely a global shakeup that includes nervous ideas around gathering in large crowds. And I don’t think that fear is something that will just dissipate over time. There’s a chance it never totally comes back, at least in how studios project revenues. Which would only double down negatively if the release schedules become packed with almost double the movies because everything was paused. Which leads me to the final piece:

6. Revenue Now Is Better Than None At All

Black Widow streaming

To project a full return to post COVID-19 theater numbers is likely complete and utter folly. There’s simply no real case to be made moviegoers will return in droves to pack theaters even for the most anticipated releases. That could easily lead to a tragedy of the commons scenario for the movie industry across the board.

Even if audiences are willing to start packing movie theaters again, Hollywood is now in a situation where there may literally be no movie theaters left for audiences to go to. As of April 3, 2020 word is that the nation’s biggest theater chain, AMC, is already expected to go into default. With no major releases even scheduled until the fall now, there’s very little chance they’ll have any locations left to open their doors when the big movies finally arrive again.

AMC is likely to be the first movie theater casualty of the Coronavirus, but it won’t be the last. How many movie theaters will actually be left by the time this is over? The answer, increasingly, looks like it’s going to be: not many.

There’s a strong case to be made here to offer movies up now online and either hope to boost an already active streaming service (Disney+ for example) or take the $19.99 where you can get it and call it a day. That’s a tough pill to swallow, but it could be the right approach. 

The Argument Against #JustStreamIt

Numerous people have stepped up to argue against the possibility of streaming big Hollywood movies ever happening. The most famous force against it right now is director Kevin Smith. Smith had this to say on his podcast about whether Disney will #FreeBlackWidow…

I think [releasing Artemis Fowl on Disney+] is a smart play. I don’t think you’ll ever see that happen with a Marvel movie. I don’t think they’re gonna play their big money cards. Think of it as somebody sitting there playing Uno. They just laid down a skip card to buy themselves some time. Artemis Fowl, they’re like, ‘Skip. You can watch that on Disney+.

They’re not gonna stick a Marvel movie on Disney+ because they’ve got some Marvel TV shows coming, and they gotta keep them Marvel movies valuable. Because those movies make fucking money, man, legit fucking money.

Smith’s argument is the same one that most Hollywood executives are probably making to each other on Zoom right now. And that argument would totally make sense in an environment where people will be going back to movie theaters a month or two from now. But that world does not exist.

People will not be going back to movie theaters a month or two from now. California’s governor for instance, recently indicated that large gatherings may not be permitted until late in 2021. By that time most movie theaters will no longer be in business. It’s April 15th as I write this and AMC, the nation’s largest theater chain, is already about to file for bankruptcy. Anyone who thinks they’ll still be around if they aren’t allowed to start selling tickets until 2021 is kidding themselves.

And even if, by some miracle, these theaters manage to survive this long winter and actually still be in business by the time Hollywood is able to release their movies in them… will people want to go back? It’s going to take a very, very long time before people aren’t afraid to gather in groups again. Even after the Coronavirus is over.

So maybe Hollywood’s blockbusters would make more money in movie theaters… if movie theaters were a thing that was still going to exist. But that was January of 2020 thinking. It’s not January of 2020 anymore. We’re living in a post-COVID world. Everything has changed and it isn’t changing back. They can either change with it and #JustStreamIt, or they can keep pretending everything is going back to normal when it isn’t and die.

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