How Disney’s Premium-Subscriber Model May Revolutionize Cinema

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In the age of modern technology and its increasing capabilities, it seems that no old-fashion system is “safe” from the threat of digital media. One such system is television itself. The seemingly ancient entertainment system now has to compete with platforms such as Netflix, Hulu, Disney+, and Amazon Prime, to name a few. These services provide a viewer with hundreds of shows and movies on demand for roughly $15 a month, as opposed to a typical cable plan that might cost someone upward of $100 a month. Disney+ specifically, is relatively new to the streaming service game, but has accumulated a massive following because of its notable reputation and rights to popular studios like Marvel and Pixar. It launched on November 12, 2019 and, in August of 2020, it gained more than 60.5 million subscribers worldwide. From March 2020 to April 2020, 20 million subscribers joined– from December 2019 to March 2020 there was only an increase of 7 million subscribers. This large increase is due to the spike in COVID-19 cases and the consequent “lockdown” that forced everyone to stay at home and find some way to stay entertained. As theaters across the country closed, companies panicked as to how they would get movies out to viewers. For Disney, they decided to experiment with an online release for their latest live-action remake Mulan on Disney+, with the additional fee of $29.99

This was not Disney’s first time releasing a movie straight to its streaming service, but it was the first time subscribers had to make an in-app purchase to access a new release. Earlier in the year, Disney released both Lady and the Tramp and Artemis Fowl straight to their platform, skipping theaters entirely. However, that was a deliberate choice rather than a last-minute strategic pandemic maneuver. Originally due to be released on March 27th, 2020, Mulan saw several release date pushbacks before finally scheduling to September 4th 2020, exclusively on Disney+ and for an additional fee of $29.99 Elaine Low, a senior reporter at Variety, explained to NPR in an interview why she believes Disney decided to enact the extra fee. She explains that because the movie was intended to be a big blockbuster for Disney, a big budget, specifically $200 million, was allocated to make it. However, because of the uncertainty surrounding the movie’s release, in addition to the closing of its major theme parks, Disney had to strategize how to make up for the financial hit suffered due to the pandemic. Low states their studio revenue has gone “down 55% year over year for the quarter. Their theme parks and consumer products, which is a hugely lucrative business– down 85% year over year.” This additional fee on a service that they knew was going to continue to bring in money over the lockdown was a way to possibly alleviate this hit for the company. 

This places obvious restrictions on who can then access the movie. Not only is this an extra fee within a service that people already have to pay monthly for, it’s quite expensive for the average movie viewing. In the days of pre-COVID, one could see a movie in theaters for about $10. Now, that $10 appears as pocket change when compared to Mulan’s $30 extra fee. Although no one can view this fixed price as actually being cheaper than an average theater ticket, as long as you are watching with more than three people, this feature severely restricts the number of people able to access the movie. Not only was it not released in theaters, which already restricts access to the general public, the imposition of an additional fee discouraged some subscribers to not watch the movie. Furthermore, because of the financial hardships the pandemic has brought, the additional $30 was too expensive for some. According to a Pew Research Center survey, about a quarter of adult Americans have had some trouble paying their bills and a third dipped into savings or retirement accounts to keep up with finances since the coronavirus outbreak. It is then difficult to imagine that someone who is struggling to keep up with the monthly subscription fee will find an extra $30 for a single movie. So, while the movie is seemingly available to all of its subscribers, it is restricting itself from those who may be financially struggling.

It is interesting to note that this is the first time Disney+ has had such a feature. While Disney CEO Bob Chapek has said that Disney is “looking at Mulan as one-off”, he also has mentioned that the Disney team is interested to “see what happens”  in terms of subscriber growth and number of people who did purchase the film. It is no surprise that Disney+ has appealed to so many people as a streaming platform. Cultural phenomena such as The Marvel Cinematic Universe, Pixar Studios movies, and the Star Wars films are all available on the platform. It is also for this reason Disney can likely experiment with paid features within the platform and not fear losing their subscribers. As Disney continues to produce big films while many theaters are still closed, it would not be surprising if this model makes a reappearance on this platform at some point. 

Source: The DisInsider

Although Mulan will likely not make back the $200 million budget it paid for, it earned a total of $35.5 million from streaming alone in its first weekend. Perhaps with a lower budget and more user comfort in paying the fee, Disney might start to make money off of these movies again. While some suggest Mulan was considered a failure for Disney, due to their next feature, Soul, already decided to be released on Disney+ with no added cost, some regard it as a success because it proved that people were willing to pay an extra $30 to access the movie. Despite a possible failure on the first test of this model, Disney has a loyal fan base to attempt a second, or third test to see if viewers will adjust to this new method of movie releases. While the US currently has no visible future to return to full normalcy, especially for non-essentials like theaters, companies like Disney will have to get creative to make money and find new ways to release films. The Mulan-model might just be the future of what the theater experience used to be. 

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