Will ‘Mulan’ Make Money?

Disney is getting down to business to defeat the coronavirus slump. The studio’s decision to release its live-action version of Mulan exclusively on Disney+ has the potential to change film exhibition–both during the pandemic and after.

Mulan will hit Disney+ on Sept. 4 for $29.99, but there are some caveats.

First: The rental is only accessible to Disney+ subscribers, meaning the price for the rental just jumped up to $29.99 plus a monthly subscription rate of $6.99/month (or $12.99/month for a Disney+, Hulu and ESPN+ bundle).

Second: This won’t be a typical 48-hour video on demand rental. Mulan will be available to paying renters for as long as they have a Disney+ subscription. So, in theory, it’s $30 (or $37) up front to be able to rewatch as many times as you want, as long as you keep paying for a subscription.

That’s a steal of a deal, according to a very informal poll I conducted among my  friends this weekend. A one-time fee of $30 to let your kids watch something indefinitely that would have cost a family of four at least $100 in a theater for one night? That’s just simple math for families, and that’s what Disney is counting on.

Disney CEO Bob Chapek said during the company’s third quarter earnings call earlier in August that Disney+ now has 60.5 million global subscribers. That’s nearly $423 million in streaming revenue a month at $6.99 a subscription. Reports have placed Mulan’s budget at around $200 million. Factor in about $150 million for a typical marketing campaign, and Mulan needs to make at least $350 million to break even.

Let’s say half of Disney+’s subscribers shell out the money opening weekend to see Fa Mulan bring honor to her family and defeat the Huns. That’s $907.5 million right there, which would be the biggest opening weekend of any Disney remake so far.

This arrangement seems designed to be mutually beneficial to both the House of Mouse and the moviegoer. According to the most recent numbers, the average American movie ticket costs $9.37. Disney would have to sell at least three times as many tickets as rentals to make the same amount of money (exclusive VOD takes out the middleman of theater fees), and consumers who don’t want to keep their subscriptions would have to watch the movie three times just to make the rental worth it.

But what about people who don’t have kids or who don’t have the funds to pay $30 to see the live-action version of a film that already exists as a perfectly fine animated feature? Others surveyed in my very informal poll said they’d be happy to just rewatch the 1998 original. But that’s only available as a Disney+ exclusive, too, unless you want to pay three dollars to rent it elsewhere.

Disney+ is the first streaming service to try this “premiere access” method. And it’s clearly a subscription gambit. After the Trolls: World Tour VOD controversy earlier this year, AMC Theatres and Universal came to an agreement that Universal could put its films on VOD after just three weeks of theatrical distribution, a huge shortening of the typical theatrical window that other studios might start to explore. Every studio is trying to navigate the new world of theatrical exhibition during the pandemic. CEO Bob Chapek has said this premiere access move is a test run for the future.

To cap it all off, this exercise in coronavirus capitalism also has ties to the biggest movie storyline so far this year. As luck would have it, Disney is releasing Mulan against a limited Tenet opening. Christopher Nolan is releasing his latest film like an indie by slowly opening it in some cities worldwide and then rolling it out to a wider audience. That film, according to reports, will need to make $450 million before it turns a profit. Will Hollywood switch to an on-demand exhibition model, or go back to a slow rollout method? Whatever happens the weekend of September  4 could change how Hollywood does business for years to come.

Or maybe not. Remember Quibi?