For various reasons, Disney rejects the term “premium video on demand,” or PVOD, in reference to its release via Disney+ of Mulan on Friday. But regardless of the label for it, the release will be as closely watched as any in recent Hollywood history, even that of Tenet, which arrives in theaters the day before.
Mulan is a $200 million, live-action remake of the 1998 Disney animated film. Days after its March 9 premiere at the Dolby Theater in Hollywood, its scheduled March 27 release fell under a dark cloud due to COVID-19. After postponing the release multiple times, hoping to salvage the highly profitable theatrical window, Disney in early August decided to shift it to its Disney+ streaming service — only with a twist.
Instead of making it available as a PVOD title, a la Trolls World Tour and many others in recent months, or dropping for all subscribers a la Hamilton, Mulan will arrive via a brand-new venue within Disney+ called Premier Access. Subscribers to the $7-a-month-Disney+ will need to pay an additional $30 to watch it before it is made available as a basic offering to all subscribers. (Disney hasn’t indicated the timing of that broader, no-extra-charge release.)
Premiere Access is available via disneyplus.com and within the Disney+ app on third-party platforms like Apple, Google and Roku. Existing Disney+ subscribers can get Premier Access to Mulan by paying the $30 fee directly on DisneyPlus.com. Any Disney+ subscriber springing for Premier Access to Mulan will be able to download it watch it an unlimited amount of times as long as they remain an active Disney+ subscriber.
Amazon Fire TV is not one of the in-app payment partners as of now, so any Disney+ subscriber watching through Fire will need to go out to disneyplus.com and verify the purchase before returning. That’s true of a few other platforms as well. But once Mulan is purchased, it is positioned like other Disney+ titles in the user interface — it will be found on the home page and can be added to subscribers’ Watch List.
Disney did not make any executives available to Deadline to discuss the strategy of the move. CEO Bob Chapek, in announcing the plan during the company’s August 4 earnings call with Wall Street analysts, described it as a “one-off” that will allow the company to “learn.” From a data standpoint, it appears the company will be in control. Unlike PVOD releases, which depend heavily on third parties like MVPDs or tech distributors, Disney will capture all of the data.
Financially, the ultimate takeaways are anybody’s guess and the math is also the back-of-the-envelope kind. Based on tracking in March, Mulan was on course for an opening weekend in the $75 million to $85 million range and projections had it collecting about $750 million at the global box office. With theaters now open again in many international territories, the film is still expected to get a theatrical run — but, significantly, not in places with access to Disney+. That includes major territories like the UK, France, Italy, Spain, Germany, Japan and Australia. China has not yet confirmed a theatrical release, but the market is showing signs of strength again after a long idle period.
Translating the usual P&L outlook to a much more streaming-focused environment is complicated. Essentially, in order to reach the neighborhood of what Disney would take in from the kind of box office Mulan was expected to generate, a $30 purchase would have to be made by at least 10 million subscribers. In early August, Disney announced it had 60.5 million subscribers around the world.
While Mulan has altered the thinking about windows, especially coming as Universal and AMC reached a groundbreaking agreement on a 17-day window for select releases. But for Disney, which has been struggling through a dire 2020 climate marked by theater, travel and sports closures, a bold decision had to be made.
“Rather than simply rolling it into a free offering, we thought we can test anything when you have your own platform,” Chapek said. “We’re trying to establish a new premiere access window to capture that investment we got (in the film). We’ll have a chance to learn from this. From our research under a premiere access offering, not only does it get us revenue from our original transaction of PVOD, but it’s a fairly large stimulus to sign up for Disney+.”
Benjamin Swinburne, an analyst with Morgan Stanley, called the Mulan release in a recent note to clients “the next major test case” for an industry overhauling the custom of having films stay in theaters for at least two-and-a-half months. “We see DTC and PVOD as long-term structurally beneficial to film studios, and likely less cannibalistic to moviegoing than feared.”
Michael Morris of Guggenheim, who, like Swinburne, has a “buy” rating on Disney shares, said he is a bit less certain. “Charging current Disney+ subscribers another $30 for a film requires a broader consumer understanding that the availability is a special event,” he wrote in a research note. “We are optimistic but not convinced that consumers value windowing given that Netflix, the streaming video benchmark, does not utilize the practice.”