Disney May Be Considering Bringing MULAN Straight To Digital To Maximize Potential Earnings

On a recent conference call between Wall Street analysts Michael Nathanson, Craig Moffett, and Nick Del Deo to discuss the ongoing coronavirus pandemic's impact on media, telecom, and tech companies, Nathanson shared some interesting insight on what moves The Walt Disney Company may be considering as we inch into the summer.

With their theme parks expected to open within the next few weeks and major theaters chains expected to reopen by the end of June, the biggest decision looming for the House of Mouse is the upcoming worldwide launch of Niki Caro's Mulan, and whether or not it may actually be more financially beneficial for them to bring the $200 million production straight to digital over a traditional theatrical release.

Nathanson says Disney will likely be more than happy if Mulan manages to rake in even 50% of the $1 billion many of the studios's 2019 blockbusters managed to make, "it will be a freakin' home run." However, with an increasing amount of uncertainty regarding whether or not audiences will actually return to theaters this summer when they reopen, there's really no guarantee Mulan will even be able to reach that marker. 

Even if theaters open in a majority of the United States, there is a growing possibility that theaters in some of the nation's biggest markets - New York, Los Angeles, Chicago and San Francisco - will remain closed into mid-August, possibly into the fall. 

While Disney has publically been very vocal about their desire to see all of their films released theatrically and have repeatedly expressed to exhibitors their intention to carry on with the current July plan, Nathanson isn't entirely convinced that Disney will stay on course as its release date nears. Outside of theaters being open, he explains that the studio would have to first "un-furlough a lot of their employees" in distribution and marketing, adding a significant amount of cost that they probably do not want to undertake at this time. "I don’t think it’s a given that Mulan‘s going to be released as we think.”

The alternative he proposes, which he speculates Disney may already be considering, is that Mulan may be sent directly to premium video on demand (PVOD) followed by an accelerated launch on Disney+ by Labor Day. They would essentially be following the precedent established by Trolls World Tour to maximize potential earnings in an effort to mitigate some of the unavoidable losses they'll be facing this year. 

He adds that a streaming-focused Disney+ release "could give Disney a bit of a boost and limit churn." The move could also help their stock price, “the story about Disney+ and Hulu has given the stock a bit of support... If they do kill Mulan, that could help the narrative. In a perverse way, that could be better for Disney stock in a long run than having Mulan go to theaters.”
 

Acclaimed filmmaker Niki Caro brings the epic tale of China’s legendary warrior to life in Disney’s “Mulan,” in which a fearless young woman risks everything out of love for her family and her country to become one of the greatest warriors China has ever known.