Disney+ is so successful it no longer needs exclusive movie releases

disneyit’s (NYSE: DIS) decision of exclusive theatrical release its remaining 2021 movie slate was not just because cinema had rebounded enough to support standalone feature films, but also because its Disney+ streaming service became such a hit that it doesn’t need to support it artificially more.

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

While he touted the success of his summer lineup that saw five of the eight biggest domestic releases come out of his studio as justification for the switch, it’s also clear that Disney has turned the corner of 116 million streaming subscribers means it’s so successful that it doesn’t need to funnel movies to the service to get people.

Image source: Getty Images.

Hit the ground running

Disney far exceeded Wall Street expectations, which had forecast the king of entertainment to add just 9 million new subscribers in the quarter and come in at 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.

This follows the rapid expansion experienced at the start of the pandemic and it was then that the need to add new content arose. With cinemas first closed completely and then allowed to open with limited capacity, the ability to generate the kinds of revenue needed to support big-budget films was not there.

It also allowed Disney to tout its streaming service as having blockbuster fare that couldn’t be found anywhere else, though much of it was actually forgettable. It was Mulane, Souland 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 which allowed Disney to boast that the film made $60 million for the service. Yet it also spawned a new controversy that threatened to overshadow and disrupt the streaming service.

Discord in the ranks

While Black Widow eventually earned $80 million when it opened in theaters and some $377 million worldwide, actress Scarlett Johansson said she was cut from the money she would have made if the film didn’t hadn’t been exclusive to Disney+.

Because most actors receive a salary for acting, but then earn extra money from box office receipts, Johansson sues Disney for breach of contractalleging that it inappropriately diminished the amount of money she would otherwise have gotten had the film been released theatrically first.

A light bulb seemed to go out for other actors as well, who began to wonder if they should sue the studio as well. This announcement by Disney that its movie lineup will return to theaters gives it the chance to quell any further movie star uprisings.

Certainly AMC Entertainment (NYSE: AMC) is happy with the move, as CEO Adam Aron applauded the decision and promised to “sell truckloads 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 last movie, Shang-Chi and the Legend of the Ten Rings, earned $152 million in domestic revenue and $264 million worldwide, even without access to China. It speaks to a theater industry in recovery, even if not at pre-pandemic levels.

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

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