The live-action remake heads to Disney+, but…

After being repeatedly pushed back from its March 27 release, Disney’s Mulan will released via the Disney+ streaming service for a one-time video-on-demand (VOD) fee of $29.99 which is on top of the monthly $6.99 subscription fee. In announcing the September 4 release, Disney CEO Bob Chapek insists that this is not a new business model for the House of Mouse. In the same earnings call where the company revealed a near $5 billion loss over the past quarter due to the pandemic, he stated, “We’re looking at Mulan as a one-off as opposed to saying there’s some new business windowing model that we’re looking at.”

With its cinematic calendar in turmoil, Disney has already pushed back many of its future releases back by up to a year, while bypassing movie theaters altogether for some smaller offerings, such as Artemis Fowl, Magic Camp and The One and Only Ivan, the latter two of which have had their cinematic release dates turned into streaming release dates.

Despite its being delayed, Mulan still had its world premiere in Hollywood on March 9, 2020, just as heightened precautions were being put in place in the US. The film was originally to have hit the sliver screen in November, 2018, but that it was subsequently rescheduled to March 27, 2020, or about 15 months later. It is perhaps due, in part, to this delay that prompted Disney leadership to proceed with the streaming release rather than waiting for theaters to reopen more broadly. In fact, Disney is taking a hybrid approach. In most countries where theaters have reopened, the movie will appear on the big screen. However, in countries where Disney+ is available, Mulan will bypass the cinemas. This has particularly angered exhibitors in the UK where 40% of theaters have reopened under the government’s controversial “back to work” policy and where the film along with the similarly delayed Tenet were seen as being critical to partially salvaging the lost summer movie season.

Venturing into the unknown

With its move, Disney is walking a very fine line. Its decision represents both a reversal of previously stated intent to ensure a theatrical release for what was expected to be yet another successful live-action remake of one of its classics, as well as being an acknowledgement that this mode of release is going to break that box-office streak. In addition, Disney was mindful of the damage done to Universal with its release of Trolls World Tour, which caused first AMC and then Regal Cinemas to announce a boycott on showing future releases from that studio. Disney’s decision comes less than a week after Universal and AMC announced on July 28 an agreement allowing the studio to release some films 17 days after their theatrical debut, drastically reducing the time between theater and home releases. Regal and Cinemark have not yet signed on and Disney has long been a champion of the theatrical experience. But, the question remains that if Mulan finds even a modest level of success will Disney still view it as “one shot”?

By going this route, Disney is expressing confidence in its 10-month-old streaming service which has, unlike its other divisions, benefited from the various lockdowns. During the same earnings call, Disney announced that they had reached 100 million subscribers across all of its streaming services – something that it took Netflix eight years to accomplish. In particular, 60 million of those subscribers are for Disney+, meaning that the company has achieved its 2024 goal some four years early, putting it among the leaders of the Streaming Wars.

Disney had expected a solid opening week domestic box office of $80-90 million. That would have put it in line with Aladdin’s $91.5 million in May of 2019 before going on to over a billion in global box office. With a budget of $200 million, however, Disney is banking on overseas ticket sales – especially in China – to make up the difference and boost the film to profitability. That may take longer than anticipated given the resurgence of the Covid-19 virus in Hong Kong as well as in parts of mainland China. In addition to the United States, Disney+ is also available in Canada, Australia, New Zealand, the U.K. and other parts of Western Europe, where Mulan will be available for VOD at somewhat varied prices.

It remains to be seen, whether the pent-up demand for the movie will be sufficient to overcome the ongoing economic uncertainty. For households with children, a $29.99 price tag for a family movie night is a comparative bargain when a night out at the theater can easily run into $50-60 or more. It’s unlikely that Disney will see nearly the same amount generated as if it had been released as scheduled, but a key difference means that just looking at the numbers will tell the whole story. With a theatrical release of a hot property like Mulan, the studio gets about 90% of the first week’s ticket sales (the theater itself makes money off the concessions, that’s why the $7 soda), with the amount decreasing over the following weeks as the theater gets a bigger cut. With Disney releasing the movie on a service it already owns (as opposed to having to go through DirecTV or Comcast), Disney gets ALL of the money from the fee. For the first week, that’s likely only a 10% boost, but if Mulan truly has legs and word of mouth encourages others to pay the $29.95 for it over the following weeks, then that becomes an even bigger difference. And, even for those who are willing to wait, the new content may encourage many of the 128.85 million US households who don’t already have Disney+ to sign up.

While Trolls certainly established that this method of distribution can be profitable for a smaller-budget film, $200M is a pretty steep climb. The $29.99 is $10 more than what Universal charged for Trolls, but Disney has considerably sweetened the pot. Mulan won’t be offered as a rental that expires in 48 hours. Instead, Disney confirmed on August 5, that the subscribers will OWN the movie (at least as long as they remain subscribers). In this regard, it’s following the well-trod path of buying digital downloads from Apple or Amazon. And given that an older, lesser movie like Titan A.E. goes for $14.99 on Apple, suddenly that $29.99 price tag, while on the higher end, is not unreasonable.

But wait, there’s more

To be certain, these are not normal times. And, Mulan is not a scene-for-scene remake of the original animated feature. Mushu the dragon (voiced by Eddie Murphy) is absent for one. Likewise, Captain Li Shang was dropped as Mulan’s (Liu Yifei) love interest in the wake of the #MeToo movement. The witch Xian Lang (played by Gong Li) has been added as Mulan’s principle adversary. Additionally, the live action movie is also not a musical, instead some of the themes being used as background scores. Even with the delays, Disney still has faith in the movie, having announced in April that there would be a sequel in the near future.

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