Will This Release Permanently Change The Movie Industry?

Prior to the COVID-19 pandemic, Disney was planning on releasing their live-action version of "Mulan" in theaters in the second half of 2020.

Disney sunk a reported $200 million into the movie and is looking to recoup their investment.

Disney executives had a decision to make on "Mulan" and their other movies that were in the can.

Should they:

1) Wait up to 2-3 years and release "Mulan" once things return to "normal"?
2) Take the loss and add "Mulan" to their Disney Plus streaming offering?

In the end, Disney chose a third option that may or may not transform the movie industry forever.

On September 4th, Disney will offer "Premier Access" of "Mulan" on their Disney+ platform.

Disney will charge you $29.99 to stream the movie for as long as you are a member of Disney+.

At some point, Mulan will become available to all other users of the platform, though likely not for at least a year.

In addition to being available on the Disney Plus platform, Apple (iOS, Apple TV), Google and Roku will also be offering the purchase of "Mulan" via in-app purchases.

Disney confirmed that they will be paying between 20-30% of the revenues to these platforms for any sales that are generated via in-app purchases.

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There are currently more than 60 million members of Disney Plus.

On top of that, "Mulan" will likely be aggressively marketed by Apple, Google, Roku and possibly Amazon (Amazon hasn't yet come to a deal with Disney).

After all, 30% (which is what Apple charges, Roku is less at 20%) of $29.99 is a pretty nice take for the likes of Apple and Google, and the movie will sell itself.

The question is - what type of interest will the movie draw?

Let's be generous and figure that 10% of all Disney Plus members buy "Mulan".

That would represent total revenues of a little under $180 million. Throw in the numbers from Apple, Google and Roku, and the number would obviously go quite a bit higher.

Estimates had "Mulan" bringing in roughly $750 million from global box office sales, though if Disney can do anything close to $200 million, they would likely be ecstatic.

We don't have much to go on in terms of how much "Mulan" could bring in. The only other data point is the April 10th direct-to-PVOD release of "Trolls World Tour", which has roughly brought in roughly $100 million in revenues so far.

Given the power of the Disney brand, the 60 million+ Disney Plus subscribers and the fact that Apple/Google/Roku are on board, I would expect that "Mulan" will absolutely smash the "Trolls World Tour" numbers easily.

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Disney has said that this is a "one-off", though this is clearly not true.

If "Mulan" does really well - 10-15 million buys, resulting in $300-$450 million in revenues - there is no doubt that this would be a game-changer in the movie industry.

The direct-to-PVOD format would cut out the middleman - the movie theatres - and also likely result in more people signing up to the Disney Plus service, which is a prerequisite for buying "Mulan".

This would result in more profit for Disney, and would almost certainly have them considering a permanent change in their method of delivering movies to the public.

If "Mulan" is a big hit, can you imagine what type of numbers a Pixar or "Marvel Universe" movie could do?

The answer to this question surely has the minds of Disney executives spinning.

There is a tremendous amount on the line on September 4th.

In fact, the fate of the entire movie theater industry could be at stake.

After all, people's habits change, and COVID-19 is going to permanent alter the movie watching habits of people. If Disney can smoothly deliver new movies to people at home for a reasonable price, many people may never feel the need to watch a movie in a crowded and loud movie theater ever again.

Filed under: General Knowledge