Disney + is so successful it doesn’t need exclusive movie releases anymore

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Disney‘s (NYSE: DIS) The decision to exclusively theatrically release its remaining 2021 film roster was not just because the cinema had bounced back enough to support standalone feature films, but also because its Disney + streaming service became such a success that it does not need to support it artificially further.

Starting with The last duelOn October 15, Disney will offer cinemas a 45-day window of exclusivity for a series of films before they appear on the Disney + service.

While he touted the success of his summer lineup which saw five of the eight biggest domestic releases roll out of his studio as the rationale for the change, it’s also clear that Disney hitting the 116 million streaming subscriber mark means that he’s so successful that he doesn’t. need to channel the movies to the service to get people on board.

Image source: Getty Images.

Hit the ground running

Disney far exceeded expectations on Wall Street, which predicted the Entertainment King would add just 9 million new subscribers in the quarter and reach 112.4 million in total.

That would still be a significant number, but would be in line with the belief that Disney + ‘s growth was slowing after its fiscal second quarter report, when the service surpassed 103.6 million subscribers, but only added 8.7 million. new viewers.

It followed the rapid expansion experienced at the start of the pandemic and it was at this point that the need to add new content arose. With theaters being completely closed first and then allowed to open with limited capacity, the ability to generate the kinds of revenue needed to support big-budget movies was not there.

It also allowed Disney to tout its streaming service as having blockbuster tariffs that couldn’t be found anywhere else, although much of it was actually forgettable. It was Mulan, Soul, and the broadcast of the Broadway play Hamilton which helped attract millions of subscribers in 2020.

This year was the streaming debut of the Marvel movie Black Widow this allowed Disney to boast that the film made $ 60 million for the service. Yet it also spawned new controversy that threatened to eclipse and disrupt the streaming service.

Dissension in the ranks

While Black Widow ultimately made $ 80 million when it opened in theaters, and some $ 377 million worldwide, actress Scarlett Johansson said she was being left out of the money she would have made if the film didn’t. had not been exclusive to Disney +.

Because most of the actors are paid a salary to act, but then earn extra money from the box office proceeds, Johansson sued Disney for breach of contract, alleging that it unduly reduced the amount of money it was making. she otherwise would have gotten if the film had first been released in theaters.

A light bulb seemed to go out for other actors as well, who began to think about whether they should sue the studio as well. This Disney announcement that its movie lineup will be back in theaters gives it the chance to quell any other movie star uprising.

Certainly AMC Entertainment (NYSE: AMC) is pleased with the move, as CEO Adam Aron applauded the move and promised to “sell cargoes of tickets” for the studio.

Ready for the big screen

Certainly, the new release schedule can reasonably be framed by Disney as forged from the revival of cinema. His latest film, Shang-Chi and the legend of the ten rings, earned $ 152 million in domestic revenue and $ 264 million globally, even without access to China. This is testament to a recovering theater industry, albeit not at pre-pandemic levels.

But it also indicates that Disney doesn’t have to worry about its streaming service either. The strong growth in subscriber numbers that Disney + continues to enjoy means it can fend for itself without the crutch of exclusive movie debuts.

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Rich Duprey has no position in the stocks mentioned. The Motley Fool owns shares and recommends Walt Disney. The Motley Fool has a disclosure policy.

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