Early assessments of this past weekend's stream-at-home release of the Walt Disney (NYSE:DIS) flick Mulan aren't exactly thrilling. The movie itself earned good enough reviews, even if the live-action remake wasn't quite as critically acclaimed as 1998's animated version. But theater ticket sales and online rentals both seemed lackluster... at least according to movie industry insiders.
Ho-hum interest in Mulan may not be an indictment of the movie, however, as much as it is an indictment of the relatively high price Disney was seeking for a digital rental of the film. Other studios and distributors likely just learned that not even the highest of high-profile studios can command $30 for online access to a new feature film.
Then there are a couple of other secondary hurdles Disney set up for itself.
For the record, lots of movie theaters are still closed due to COVID-19. Even where they are open, patrons may be steering clear. Walt Disney didn't even bother trying to place Mulan in North American theaters first. Instead, the film originally slated for worldwide theatrical release was repackaged as a premium-on-demand (or PVOD) movie rentable to existing Disney+ subscribers.
It was mostly an experiment. CEO Bob Chapek acknowledged last month," ... we find it very interesting to be able to take a new offering, our premier access offering to consumers at that $29.99 price and learn from it and see what happens not only in terms of the uptake of the number of subscribers that we get on the platform, but the actual number of transactions on the Disney+ platform that we get on that PVOD offering."
Even by experimental standards, though, Disney can't be happy with the initial return on the $200 million it reportedly spent to make the movie. The modest $6 million box office estimated for its theatrical opening weekend is a letdown of course, though a palatable one given the environment. Far more disappointing, however, is the assessment of Deadline's unnamed experts on the matter, who suggested "Disney may not have earned great presales on Disney+ for Mulan."
Exactly what that means isn't clear, but it's not a stretch to suggest the high-priced Mulan mostly flopped in terms of total rental purchases, as well as serving as a draw to the Disney+ streaming service itself.
Mobile app-download monitoring outfit Sensor Tower noted a clear surge in downloads of Disney's streaming app in front of Mulan's debut. Apptopia saw it as well. Neither app market research organization said it drove the same depth of download growth that took place in July, however, right before free-to-watch Hamilton made its way to the streaming platform. As powerful as Hamilton may be, Mulan is arguably a much more marketable product to families with kids.
Not like the others
Don't misread the message. Mulan does appear to have steered some new prospects toward Disney+. Given the studio backing it, though, one might have expected a smashing, lauded (even if unquantified) success.
Jeff Shell, chief of Comcast's (NASDAQ:CMCSA) studio arm Universal, certainly cheered his company's success with April's direct-to-consumer release of Trolls World Tour. The streaming-only flick reportedly reached the $100 million revenue mark in less time than its theatrically released predecessor did, prompting Shell to talk boldly about bypassing theaters with other new films in the near future.
AT&T (NYSE:T) hasn't been quite as forthcoming with numbers for its animated feature film Scoob! from its Warner Brothers unit. It didn't downplay its success, either, but Scoob! raced to the number-one PVOD slot at a couple of important digital rental venues even faster than Trolls did. The response was strong enough to prompt CEO John Stankey to comment during AT&T's April call, "We're rethinking our theatrical model and looking for ways to accelerate efforts that are consistent with the rapid changes in consumer behavior from the pandemic."
Mulan, in contrast, took the entire weekend to reach the top of the Disney+ "Trending" ranks, held off for a couple days by the well-loved but aging The Simpsons franchise.
And there's the rub. Given the similarities between Scoob!, Mulan, and Trolls World Tour (namely, they're aimed at kids), Walt Disney's response to Mulan feels like it fell short. The first weekend is usually the best weekend for a new movie, regardless of how and where the title is available.
Pricing is the key
The overarching, obvious difference is price.
At $29.99 a pop, Mulan is the most expensive premium-on-demand rental yet. Trolls was pushing matters at its initial rental price of $19.99. Scoob! pushed it even farther, with an initial rental price of $19.99 and a digital purchase price of $24.99. That additional $5 to $10 appears to be a big stumbling block.
This premise certainly jibes with July data from media research outfit CVM Insights. The company said the average price a consumer would be willing to pay to view a new superhero movie at home is just a bit higher than $14. Action and adventure flicks merited a little less than $14. The survey further indicated that live action movies for families and kids were worth a little over $11 per rental. Scoob! and Trolls modestly outpaced those numbers at their launches, but not radically so. Walt Disney was asking for a figure of between $16 and $19 more than TV Time's respondents said they'd be willing to pay, on average. Given that, it can't come as a surprise Mulan hasn't been a home run.
Of course, limiting access to Mulan to existing Disney+ subscribers probably didn't help either. Neither did assuring Disney+ subscribers before the release that the film would be free to watch three months later.
There is one upside to the lukewarm response to Mulan. At least now studios know what doesn't work all that well.