All Roads Lead To Streaming For Disney, Even If Movies Are ‘Back’
Last Thursday, Disney announced it would add Doctor Strange in the Multiverse of Madness to Disney+ on June 22, surprisingly just 47 days after its theatrical debut on May 6.
Even though short theatrical windows are nothing new in light of the pandemic, it was assumed that there would be some long-term impact to the shift in consumer mindset around how to watch movies. When they have to wait fewer than two months to watch “free” (included in their existing service) on streaming, it’s a different equation than the old period of three-to-six months.
Yet even Disney’s own ideas around short windows seemed to indicate that a financially successful movie like Multiverse of Madness (No. 1 at the box office so far this year, per Box Office Mojo) would have more time in theaters… or at least more time between its arrival in theaters and when it lands on Disney+.
For context, Marvel’s Shang-Chi and the Legend of the Ten Rings waited 70 days between its U.S. theatrical debut and Disney+ start, and Eternals (far less critically or commercially successful) put 68 days in between. No one at Disney has indicated a set theatrical window for films going forward, but it’s at least understandable to wonder if they’re going to be shorter than 60 days going forward to help drive further subscriber interest on Disney+.
That sort of change won’t affect your diehard Marvel moviegoers, who will likely attend on the opening weekend no matter how short the window is. But for more casual moviegoers? Perhaps the distance is shrinking to a point where a good portion of existing Disney+ subscribers figure they’ll just catch the movie when it’s out on streaming in a month and a half.
An Ernst & Young study from 2020 indicated that shorter theatrical windows impacted both the box office and home video revenue (so, interest in the movie, theoretically). In late 2021, many studios seemed to come to the conclusion that 45 days was a good balance, but Disney wasn’t among those to jump at that idea. If that’s changed, it does change the math for movies, especially given how much the industry banks on Disney titles (including Marvel, Pixar and Star Wars). It also elevates the level of concern amid yet another “down” year for the box office.
After two rough years for theatrical releases due to the pandemic, December 2021 was supposed to be the sign the movie industry was desperate for. Despite rising COVID cases late in the year, Spider-Man: No Way Home put up one of the biggest opening weekends ever, and has since climbed to No. 6 by lifetime gross (according to Box Office Mojo). That success was supposed to be a sign that the 2022 theatrical release slate was safe and studio returns would return to “normal,” as the rest of American life seemingly did the same in the ensuing months.
Though there are still plenty of reasons to be optimistic about movies in 2022, you can also see that this year could create more question marks, even as the box office climbs well past 2020 and 2021 marks. Yes, Top Gun: Maverick set Memorial Day records, but this year is still way off the mark from 2019 (down 40% in year-to-date domestic box office according to Box Office Mojo).
If summer movies can resuscitate pre-pandemic demand, you’d think Disney will play a major role in the extent of that comeback.
Following up on the early May release of Multiverse of Madness, Disney is also responsible for movie releases including The Bob’s Burgers Movie, Lightyear and Thor: Love and Thunder. But Disney is also responsible for the success of streaming service Disney+, which would certainly benefit from shorter theatrical windows for those films.
Take into consideration that box office numbers for Multiverse show the movie continuing to make millions of dollars per day. But due to the dynamics of movie releases, cutting off windows earlier means less money for theaters, who have historically made more later in release cycles — while studios take home more from the initial weeks. So Disney and others are basically trading theater revenues for subscriber interest; avoiding taking an enormous hit themselves financially, but ultimately harming theaters and overall box office figures.
As streaming’s importance keeps growing, this push-and-pull will continue to arise for all the major studios, who largely own the biggest streaming services as well. If you can trade a $13-15 movie ticket for $7-15 per month in subscription fees, the math works out in your favor pretty quickly. If those subscribers were also going to see the movies anyway though and now they’re not, it’s a loss.
Disney’s willing to take the bet that they can continue to rely on theatrical while moving their business increasingly on streaming. Those elements could find themselves at odds soon. But for now, it’s a chance worth taking when they’re the box office’s biggest draw.
