Over the last few weeks, a number of high-profile movie releases have been delayed due to the spread of the novel coronavirus. No Time to Die, the new James Bond movie, will now be released in November. Mulan and New Mutants are delayed without any new release dates attached. F9 just accepted the L, as Universal set the release date back a full year. With all of these delays, many people have started to wonder: why not just release these films on streaming services instead?
Couldn’t Disney release its films via Disney Plus or Hulu? A year ago, Disney didn’t have a streaming service. Now, it has one of the most popular streaming services in the United States. There are two schools of thought here: release the movies early for rental on services like iTunes and Amazon (perhaps at a higher-than-usual price) or make them available to Disney Plus and Hulu subscribers as part of customers’ existing subscription plans.
Other studios are already doing it. Magnolia Pictures delayed the release of its documentary Slay the Dragon and changed the distribution release so that it’s available to rent from digital services. Another studio in China made its projected biggest film of the year free to all subscribers of its own streaming platform because of the novel coronavirus outbreak, as an example.
But the answer is simple: studios like Disney still earn an impressive return on investment when they release big tentpole, event movies in theaters. The global box office in 2019 alone saw $42.2 billion, up 1 percent from 2018. That’s the kind of money that no amount of streaming subscriptions can easily match.
Disney Studios co-chairman Alan Horn was asked in a recent roundtable hosted by The Hollywood Reporter about this exact scenario. Would Disney consider letting customers pay a little extra to have a movie playing in theaters released simultaneously on Disney Plus or Hulu?
“I think what the consumer would say is that they would like to have every film on every medium right away because it’s easy for them,” Horn said. “But we find that with all the event films we’re making...we remain committed to the theatrical window. That window has proven very important to us.”
Speaking on behalf of a company that accounted for 40 percent of the total domestic box office last year and generated a record-breaking $13 billion worldwide, that makes sense. The James Bond franchise was estimated to be worth around $20 billion in 2015. A Quiet Place grossed $340 million worldwide, which is an impressive feat for a horror film without preexisting IP. Even Peter Rabbit saw $351 million at the global box office. And just like Disney, none of those studios are willing to throw that kind of money away, even if it means losing out on marketing costs.
It’s the reason streaming services that offer theatrical releases at home — while not a foreign concept — largely haven’t worked out in the past. Napster co-founder Sean Parker tried to set up a service that offered first-run theatrical movies to people at home for a higher price. $50 could secure people the newest movies without leaving their homes. It didn’t work. While some studios, like Universal and Paramount, expressed interest in teaming up with Parker, two of the biggest studios that regularly dominate the box office, Disney and Warner Bros., didn’t want to get involved. Then there’s Red Carpet, a streaming rental service for the ultra-wealthy. Movies can cost up to $3,000 to rent and stream at home. It technically exists but only at a price that makes sense for studios to replace their theatrical income.
That said, Disney is already starting to pivot some of its theatrical releases to Disney Plus. Noelle, for example, was shifted to be a streaming exclusive despite being intended for theaters. And studios like Warner Bros. are devoting entire new studio arms to making midtier movies that might have failed at the box office but can work as HBO Max exclusives. Some Fox films will also become Hulu exclusives, former Disney CEO Bob Iger noted in a prior earnings call. These aren’t big event movies like Mulan or Black Widow, which have global appeal. Reminder: these streaming services are mostly domestic right now.
That means that it’s not impossible for a smaller delayed film — like New Mutants, an X-Men movie that’s been jerked around for so long it can practically be considered vaporware — to shift to streaming instead. In fact, of all the major films that have been delayed so far, it’s arguably the best candidate. Both Iger and Disney CFO Christine McCarthy specifically called out Dark Phoenix’s underwhelming performance as a major failure in August 2019. And Dark Phoenix was an X-Men movie with huge star power that still only grossed $65 million at the US box office, despite having a $200 million budget. New Mutants doesn’t have the brand name or the budget to match.
“The criterion for me when people come to me and say, ‘We want to have this movie made,’ I say, ‘There are two questions: Do I have to see it now and do I have to see it on a big screen?’” Horn said in that same interview. “And if the answer to both of those is yes, I feel like we have a shot.” New Mutants potentially exists in that gray area of big-screen success; films like Mulan and Black Widow definitely do not.
Still, Disney and Warner Bros., alongside Paramount, Sony, and Universal, have strong relationships with theaters. And taking films like Mulan, Black Widow, No Time to Die, and Wonder Woman 1984 — which are all near-guaranteed $1 billion global hits at the box office — and bringing them to Disney Plus or HBO Max is just a bad business decision for everyone involved.