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Why Disney Can't Afford The Risk of Debuting Blockbusters on Disney+

ZachPerilstein ZachPerilstein Disney Reporter In these changing times, people are calling for Disney to release tentpole films like 'Mulan', 'Black Widow', 'Jungle Cruise', and others directly on Disney+. There are major reasons Disney can't afford that.

On November 12, 2019, a day that will forever be etched in Disney history. The company debuted its new streaming service Disney+. The service was the cherry on top for Disney CEO Bob Iger's tenure which saw Disney transform into a giant through the acquisitions of Pixar, Marvel, Lucasfilm, and 21st Century Fox. Disney+ was the crowning achievement, and it showed Disney wasn't afraid to risk it. Now about 50 million paying subscribers later. It's easy to consider that Disney+ was in fact a brilliant move.

Yet, Disney+ has had its fair share of struggles. In terms of original content, there isn't much. The Mandalorian is a cultural phenomenon, High School Musical: The Musical: The Series is winning people over, The Imagineering Story will be talked about forever by Disney Parks fans but the service still hasn't produced a lot of originals.

We've all seen the horror stories about Disney not wanting to greenlight series from franchises like The Muppets and TRON to a Disney book-based series Kingdom Keepers (which the series was being created by Kevin Smith). Disney+ isn't even a year old yet. And you can't just expect the people who run Disney+ to transform into Reed and Ted overnight.

Now, this brings us to the big question I've seen popping around.

Why not just drop Black Widow or Mulan on Disney+?

Subscribers are craving original content so of course, they are going to clamor for Disney to drop a blockbuster, tentpole film directly on their service. They are bored out of their minds in quarantine! Even with the changed world due to COVID-19. It is still too much of a risk for Disney to just plop their films on Disney+. Even if Disney went the PVOD (premium video on demand) route for Mulan and Black Widow. They would be leaving a TON of money on the table. Black Widow's budget alone is between $150 million to $200 million. Mulan's budget is reportedly $200 million.

Netflix doesn't even drop films with 200 million dollar budgets on its service. The highest they are going is $160 million and that's with The Rock, Gal Gadot, and Ryan Reynolds already attached and a streaming service that quite frankly invented the game everyone is playing.

Also, some family's don't know the amount of financial impact they will receive from the ramifications of COVID-19. So, let's pretend Disney puts Black Widow up on PVOD and they charge anywhere around $20-$70 that's probably way too much for families during this. That's one of the big reasons the PVOD route doesn't work. Yes, you can say movie theaters are expensive but there is a different value to it.

Even with a changed world from COVID-19. It's a better chance these blockbuster films will make more in theaters than at home. Disney+ is still a young service and it won't even be profitable until fiscal 2024. Disney's Studios and the box office are one of their biggest revenue makers. You just don't kill off your revenue maker. Killing your revenue maker in this scenario isn't disruption it is stupidity.

Disney moved Onward to PVOD than Disney+ so quickly due to COVID-19. It was even underperforming sadly before the world started to take COVID-19 more seriously.

Trolls: World Tour reportedly did record numbers through PVOD. Yet, Universal isn't revealing the numbers. It's easy for Universal to put Trolls: World Tour out to PVOD as an experiment. Even if the film was a sequel I don't think they had high expectations for it considering animation other than Disney is 50/50 at the box office right now. Universal still made the move to delay their Fast & Furious film a whole year.

It also doesn't matter if a film already has trailers out. A delay makes sense for Disney due to current circumstances. Moving Jungle Cruise back a year gives it a better chance to make more money at the end of the day. Can't just have it wasted on a simple Friday Disney+ drop.

If the film viewing ecosystem changes in a few years maybe Disney+ could incorporate a PVOD feature within its service but for now the risk is too large to be plopping potential blockbusters on a streaming service.

Although Disney Executive Chairman Bob Iger did mention that more films would be coming to Disney+ in the near future but obviously not the tentpoles. Artemis Fowl is making the jump to Disney+. I think Disney will also move The One and Only Ivan due to Wonder Woman 1984. Possibly that Beatles documentary will go straight to streaming but Iger seemed excited to have theatrical distribution rights for the doc so that may be unlikely now too. New Mutants is a whole different issue because 20th Century Fox films still have a streaming deal with HBO. So, one day that may actually get a theatrical release.

Disney's new theatrical slate for the rest of the year will have Mulan in July. With the optimistic outlook that the world is ready to open again. Soul got moved to November (which will be a stacked month for movies if nothing shifts). Black Widow also comes out at the beginning of November.

I don't expect any tentpoles or blockbusters to just drop on Disney+ in the future. Disney does well at the box office, and it's safe to assume they are betting on the box office to return to semi-normal in the future.

As for Disney+, they will have to continue to be creative. They will have to eventually greenlight new original series. Due to the world's current circumstances that is difficult right now. Disney+ can't become Netflix overnight. It will also be good if the service can avoid an additional paywall or PVOD feature for as long as possible.

Disney can't take a risk with their blockbusters. Disney has too much invested and there is simply too much to lose and not enough to gain if Disney went the PVOD or Disney+ route with any of their potential blockbuster films.

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Posted in Walt Disney Pictures,

ZachPerilstein ZachPerilstein Disney Reporter

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