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No Theaters, No Problem? Disney Will Release First Blockbuster Direct To Consumers

Big news #1: Disney is bypassing theatres and offering it’s 2020 tentpole film Mulan through premium video on demand (PVOD) for $30 starting September 4th.

Why this matters: The release of potential-blockbuster films such as Mulan and Tenent have been disrupted as theatres remain closed due to COVID-19 with no clear end.  It is unlikely that Disney will generate the same revenue/profit from this direct-to-consumer release though we would love to be wrong.

Chain reaction: If Mulan is successful, then Disney could choose to release other films through PVOD.

Disney’s playbook: Matthew Ball posted a thread on this topic, outlining three ways Disney could have released this through PVOD.

Big news #2: Universal Pictures and AMC Theatres have agreed to shorten the window that a movie has to be exclusive to theaters.

The theatrical release window for Universal Pictures and AMC Theatres:
1) 
Old – 75 days
2) 
New – 17 days

Standard theatrical release flow according to LightShed Partners:
1) Theatre – 0 – 2.5 months
2) DVD/VOD/rental – 3 – 6 months
3)
 Premium pay-TV (HBO, etc.) – 6 – 24 months
4)
 Network TV – 24 – 36 months

Why this matters: A part of the deal involved revenue sharing (≈ 20%) back to the theatre for PVOD rentals.

FYI: In a typical year, summer accounts for 40% of box office revenue.

More #1: 25 years ago, ‘Waterworld’ forever changed how we think about hits and flops

More #2: Six Movie Business Questions After Universal and AMC’s Historic Deal

More #3: Hollywood’s lost summer

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