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State of the Screens

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

By August 6, 2020November 15th, 2021No Comments

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:
Old – 75 days
New – 17 days

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

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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