It's an understatement to say we live in an unprecedented time right now. It's something that few if any industries were actually prepared for, and that includes Hollywood. Movie studios have been scrambling to figure out how to stay afloat when movie theaters, the primary source of revenue, are all closed for business. The response from many studios was to release recent theatrical films on Digital services in what is being called Premium VOD. Some movies have already shown some degree of success with the model, which makes one wonder if it could become the new normal. Disney isn't giving up on theaters, but it's leaving the door open to some long term changes.
During Disney's Q2 Earnings Call yesterday, Disney CEO Bob Chapek was asked if Premium VOD would become a permanent part of Disney's release plan. Chapek stopped short of that idea, but did imply that all future movies will be reviewed individually to find the best path forward whether that's theaters or Disney+ or other digital platforms, though major film releases will still be planned for theaters. According to Chapek...
We very much believe in the value of the theatrical experience overall to launch blockbuster movies... But we also believe that either because of changing and evolving consumer dynamics or because of certain situations like COVID, we may have to make some changes to that overall strategy just because theaters aren't open or aren't open to the extent that anybody needs to be financially viable. So, we’re going to evaluate each of our movies as a case-by-case situation, as we are doing during right now during this coronavirus situation.
Thus far one movie, Artemis Fowl, which was set to see a theatrical release at the end of this month, will instead hit Disney+ in June. At this point, that's the only scheduled movie to see that change. Everything else has simply been delayed to a new theatrical release date. However, Chapek's comments here do imply that perhaps other films in the pipeline, that were planned for theaters, might get shifted elsewhere.
For the most part what Disney's CEO says here reinforces a trend we've already seen Disney, and really every other studio as well, making. Rather than seeing a lot of movies hitting theaters, that might see different levels of box office success, the shift is to major blockbusters only hitting theaters. Chapek makes it clear that we're not going to see major changes to the way Marvel or Star Wars movies come to market, but everything else? That's an open question.
Artemis Fowl was by far the riskiest movie on the Disney release schedule, it was certainly not a guaranteed blockbuster. It's clear that was part of the reason that movie among all the other was shifted away from theaters and over to Disney+.
At the same time, Bob Chapek also says "changing and evolving consumer dynamics" are also part of the decision making process, and that's entirely outside of the theater closure situation. Streaming had been growing in popularity for years. It's the reason Disney+ exists in the first place. Those consumer dynamics will continue to change, and as they do, things could begin to change more drastically as it pertains to theatrical releases. We'll have to wait and see.
