Pressing Pause on the Film Industry

By Kevin Schlieder (12)


Arguably one of the most affected industries during the era of Covid-19 is film. Every production company and film studio has encountered the same issue of not being able to release their movies in theaters. While there were some production companies that held off and did release their film in theaters like Warner Bros Pictures and Syncopy’s latest partnered film, Tenet, others such as The Walt Disney Company went another route: streaming. The immediate success of Disney’s streaming service Disney+ has caused the company to restructure their business model to emphasize streaming.


On August 4, 2020, Disney made the announcement that their latest live action film, Mulan, would be skipping a theatrical release and instead going directly to Disney+. Although it was initially set for a March release, “we’ve had to unfortunately move our theatrical date several times,” said Disney CEO Bob Chapek in an interview with The Verge. 


Disney realized that there was no end in sight for their pushbacks and decided to release the film on their streaming service. For an additional $30 on top of the already $7 per month, Disney+ users could start streaming Mulan on September 4th.


Mulan was expected to financially perform exceptionally well. Disney’s last major live action recreation, The Lion King, made over $1.657 billion dollars globally on a budget of $260 million. Mulan, on the other hand, only made $66.8 million globally on a budget of $200 million. Disney planned to rely heavily on China as their primary market; however, due to national relations between America and different areas in China that involved filming, the movie was boycotted and banned in the country. Overseas, the first week brought Mulan $10.9 million only to drop by 72 percent and make $6.5 million the week after.


A little over a month after Mulan’s release, Disney announced that they would be restructuring their current business model. Their new 3 tiered model would focus on creating direct to consumer content for Disney+, global distribution, and commercialization. 


“I would not characterize it as a response to Covid. I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway. We are tilting the scale pretty dramatically,” said CEO Chapek in an interview with CNBC’s Julia Boorstin on Closing Bell. After seeing the commercial success of Disney+, it made sense to continue to focus on content for the platform.

Fellow Disney+ subscriber and Ayala Engineering teacher Mr. Michael Collins believes that this new business model is beneficial to not only the film industry but also society as a whole. 


“I think it provides another way to experience film and many families can't necessarily afford a night at the movies with all the popcorn, snacks, and treats. That could easily approach $100. I think streaming and live theater could coexist. Many times people are just sick or don't want to go out, but still want to experience a new film release,” said Mr. Collins.


Most consumers believe the future of cinema will rely on theaters providing services and features that augment the movie going experience that cannot be easily replicated at home. 


“I have been to several theaters with the reclining seats, gourmet food, and beverages, and I have found those environments very pleasing,” said Mr. Collins. “As it is now, I have to sneak my Albertos burrito into Harkins when I want something beyond popcorn. I could see strategic partnerships from certain food chains and theaters to drive both business models. Theaters that incorporate my senses like smell and motion (like a simulator) could be some ways for theaters to evolve.”