Weekly E-Newsletter

With Exhibition on the brink, Paramount Decree topples, a symbolic thumb in the eye

A court ruling that dropped last week allowing movie studios to buy theaters (whether or not they want to — and they probably don’t) is the latest snub to an industry that’s been rattled by change for years, in particular since March and COVID-19.

The Take

Exhibition hasn’t been this pressured in a century. When the 1918 Spanish Flu shuttered theaters, many permanently, studios saw an opportunity and snapped them up, ruling the business until the Paramount Decrees in 1948 broke them up. More than 70 years later, it’s no surprise the law is toast. The landscape is very different and a handful of Hollywood majors including Disney and new royalty like Netflix and Amazon were exempt from it anyway.

But it’s ironic that the ruling – by U.S. District Judge Analisa Torres of the Southern District of New York — hit as the nation endures another massive health crisis that’s squeezing exhibition. PVOD is arguably tipping the balance toward studios as Wall Street and big credit ratings agencies struggle to assess milestones like AMC’s deal with Universal and Disney’s decision to release Mulan directly to Disney+.

What’s clear is that this time around studios are not sweeping in to buy the distressed assets. Sources tell Deadline that major movie studios have no plans to get in the exhibition. With their focus on streaming, they prefer to spend billions building up their own services than worrying about the local staffing, leases, property taxes, and city ordinances that come with running a theater. Also, let’s not forget that many have already been there and done that — i.e. Warner Bros. with cinemas it used to own abroad, and Sony with Loews in the mid-1990s.

At least one big chain, AMC Entertainment, may consider its own asset sales if things continue to go south, its CEO said last week.

Netflix and Amazon are the lone strategic buyers rumored on and off to be interested in buying a chain. Netflix bought the Egyptian in Hollywood and the Paris in New York City. But those were largely vanity plays. Sources at Netflix have insisted the streamer would never jump into the circuit business because it’s great at what it does and doesn’t need that exposure to an ancillary risk.

Source: Deadline

Mulan’s move to Disney Plus proves how quickly the pandemic forever changed entertainment

Disney’s live-action adaptation of Mulan will be released on Disney+ on September 4th for $29.99, the company announced today.

Disney executives walked through the new plan for Mulan’s release during an earnings call with analysts last week. The $30 fee will be on top of the $6.99 subscriber fee for Disney+ customers. The company told Insider that the $30 acts as a purchase — as long as people subscribe to Disney+, they’ll be able to access the film. Chapek also made it seem like non-subscribers can pay $30 for the film as well, but The Verge has emailed Disney to confirm.

“We thought it was important to find alternative ways to bring [Mulan] in a timely manner,” Disney CEO Bob Chapek said. In countries where Disney Plus is not available, Disney is releasing Mulan in theaters on the same date. The new release date follows Warner Bros.’ announcement that Christopher Nolan’s Tenet would get a staggered release. Tenet will open in approximately 70 international territories on August 26th before getting a limited release in the United States on September 3rd. It will go city by city in the United States as the country battles climbing coronavirus cases.

Mulan has faced a bumpy road. The film was originally supposed to be released on March 27th, got pushed to July 24th, and was delayed again to August 21st. Having Mulan on Disney Plus should help Disney a little, but whether it performs the way Disney needs it to remains unclear.

Source: Deadline

The Take (via Deadline)

Disney has essentially created a video-on-demand portal within its own streaming service, which will give Disney 100 percent of sales revenue, 100 percent control over how people watch the movie, and 100 percent of user data.

“We’re very pleased to be able to bring Mulan to our consumer base that has been waiting for it for a long, long time as we’ve had to, unfortunately, move our theatrical date several times,” Disney CEO Bob Chapek said on an earnings call.

Moving Mulan, a film that, in pre-COVID times, may have generated north of $1 billion at the box office, to Disney+ is a radical shift for the entertainment industry. While Chapek told analysts on the call that Disney is “looking at Mulan as one-off,” a Disney source told The Verge that “we put in enough work behind the scenes that this is definitely not a one-off.” Even with the new distribution path, Mulan isn’t likely to make what it would have in pre-coronavirus times, but it’s a new option that Disney executives are excited about. As Chapek spoke about the new launch model for Mulan, he stressed that Disney’s team is interested to “see what happens” both in terms of subscriber growth and how many people purchase the film.

Reading between the lines, Chapek doesn’t want to piss off theater owners associations, but he’s not trying to ignore the possibilities that Disney+ can do more. It would be obtuse to ignore an obvious, new revenue stream. That’s true while companies face ongoing economic turmoil amid the pandemic, and it’ll still be true after the beginning phase of the pandemic subsides.

Although the pandemic is to blame for the sudden shift in strategy for three of the world’s biggest film companies — Universal, Warner Bros., and Disney — the outcome seemed inevitable. Home entertainment revenue last year saw massive gains, largely driven by different types of streaming options. The pandemic has accelerated trends that likely would have played out in years to come; what may have happened in a decade occurred in mere months. Disney’s announcement felt like the rope finally snapping, and it has led to a series of existential questions. Will movie theaters survive? Will studios prioritize digital releases as conglomerates try to build their streaming bases?



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