Morgan Stanley hosted a virtual event yesterday with Disney CEO Bob Chapek. Topics were discussed about Disney’s plans for streaming, theme parks, direct to consumer, theatrical releases and more.
During the event he was asked about how they planned on handling theatrical releases and windows moving forward from this time when theaters were mostly shuttered.
His answer involved a lot of of him looking up to the ceiling and moving his eyes around, which was odd, but it sounds like they plan on continuing theatrical releases with some changes.
Here’s what Chapek said:
“Well we believe in the power of exhibition, to build our franchises. In 2019, the last normal year we had, we had 11, billion dollar films, and so that is a big deal to us. And that will continue to be a big deal we believe but we realize this is a very fluid situation and it’s fluid for two reasons.
Obviously the short term impact was longer than we wanted it to be, but the short term impact of COVID on the number of screens that are open, consumers willingness to actually go back into theaters but there’s also the fundamental changes that are happening in consumer behavior, which for me are much more profound and of course their catalyzed by the first issue, which is COVID itself.
And so we’re watching…consumer behavior and preferences to see how long term those preferences are going to shift and that’s one of the reasons we talk about flexibility so often. We want to have a more nimble organization that one of the reasons we did the reorganization knowing that the sands under our feet are shifting, consumer behavior is shifting, consumer preferences are shifting, and we want to make sure that as that happens we are on the front end of the wave, anticipating those changes.”
Then he’s asked about how the windows of release will likely change as it’s probably not ever going to be like it was before COVID again. If Disney will have a “Shorter theatrical window around the tent pole releases.”
Chapek indicates they are going to continue watching the situation to see but says:
“I think the consumer is probably more impatient than they’ve ever been before, particularly as they’ve had the luxury of an entire year of getting titles at home, you know pretty much when they want them, so I’m not sure there’s going back, but we certainly don’t want to do anything like cut the legs off of a theatrical exhibition run. But we like to let the consumer be our guide in all situations (No. No they don’t) and I don’t think they have much of a tolerance for a title being out of theatrical for months, yet it hasn’t had it’s change to be thrown into another distribution model, just sitting there getting dust.”
A couple of points to discuss here:
1. Consumers haven’t had an entire year of getting titles they wanted at home. They got a couple releases from Disney/Marvel that were not already planned for streaming, but a lot of titles, from many studios, have been pushed back months or years. So no. Consumers have not gotten what they wanted when they wanted it.
2. The idea that they let the consumer be their guide in “all situations” is not true. People have been calling them out about ‘Star Wars’ and social media behavior and they’ve done very little, and even allowed certain people to double down. People have spoken out against the re-theme of Splash Mountain and they aren’t changing it. People have been upset about the removal of the Annual Passholder program and they aren’t changing it. They had incredible price increases and lots of complaints but they didn’t change it. Disney hasn’t let “consumers be their guide in all situations” for years.
3. It sounds like they are going to shorten the time between theatrical release and Direct-to-consumer. Given that they completely restructured to focus on a Direct-to-Consumer model, this shouldn’t be a surprise to anyone. They benefit by doing so. In this instance so will the consumer.
Overall this is good news for consumers that don’t want to go to theaters for whatever reason.
You can watch a replay of the conversation HERE.
What do you think? Comment and let us know.
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