Walt Disney Company Q3 Earnings Report

[SwirlTheCitrus]

I think the worry for some is this will become more frequent and could lead to other things that would’ve probably been included in Disney+ to now be an up charge.

I feel like this is a necessary evil right now if we want Disney to continue to create new content without the ability to have a theatrical release.

 

[hertamaniac]

In no way was Mulan ever a direct to DVD movie, the comparison is silly. This isn't The Little Mermaid 5, Journey to Shell Kingdom.

And why would they test the waters about just dumping this into the market direct to DVD? That's not a test, that's just giving up potential revenue. They already have estimates on Bluray/rental sales. I don't think the potential market is any different than normal release. Maybe a tick higher rental sales in today's environment.

The test is finding out how much money they can make by bypassing a theater release with a stream release.

I look at a simultaneous release as a potential of maximizing revenue. And I think the current market conditions do equate to higher rental/disc sales. I think they are leaving money on the table by not having a simultaneous release.

There are DTB movies and there are theatrical targeted movies (which sometimes never achieve it). Mulan was also not targeted to be a DTC movie either.

 

[dlavender]

I look at a simultaneous release as a potential of maximizing revenue. And I think the current market conditions do equate to higher rental/disc sales. I think they are leaving money on the table by not having a simultaneous release.

There are DTB movies and there are theatrical targeted movies (which sometimes never achieve it). Mulan was also not targeted to be a DTC movie either.

I think they may not have the time to ramp up production on discs and get it out on time. They want this out now. Just a total guess on my part.

Also, this is a twofold approach. They not only want current subscribers to hit "buy now", they also want to drive non subscribers to the platform to join and hit "buy now". IMO it's not going to work, but Disney has surprised me before with what will sell.

 

[hertamaniac]

I think they may not have the time to ramp up production on discs and get it out on time. They want this out now. Just a total guess on my part.

Also, this is a twofold approach. They not only want current subscribers to hit "buy now", they also want to drive non subscribers to the platform to join and hit "buy now". IMO it's not going to work, but Disney has surprised me before with what will sell.

I agree with the distribution timeline challenge of hard media. There is no doubt in my mind that the Disney+ model is much more profitable for them. They want that impulse purchase and instant gratification. But, to me that doesn't mean you ignore another avenue of supplementing revenue with disc sales/rentals; they are not mutually exclusive.

 

[YesterDark]

What really is new here is the price point, right?

We can go back and forth on pros/cons, but testing out a $30 + price of subscription is what is at stake here for a streamed release.

IMO it would perform better at $20, but they have the research...

It's a new world. It's always better to start high and drop the price if there isn't demand. You really can't raise it dramatically if it's a success so why leave money on the table? They can always change the price to $20 after 4 weeks. They don't have to negotiate (I think) with anyone to do that.

 

[dlavender]

Yeah I do wonder about that. I personally know 3 people who paid for it.

From my very limited research it looks like the week it came out on demand it was number one and the second week it was number 2.

No financial numbers come with that, but I assume for those two weeks it made a pretty good sum. Not sure why that surprises me but it does.

I will say we were all probably "thirstier" for content in March/April, but maybe not.

 

[YesterDark]

I look at a simultaneous release as a potential of maximizing revenue. And I think the current market conditions do equate to higher rental/disc sales. I think they are leaving money on the table by not having a simultaneous release.

There are DTB movies and there are theatrical targeted movies (which sometimes never achieve it). Mulan was also not targeted to be a DTC movie either.

How are you losing money? If you release it simultaneously, no one is going to buy the $30 ticket price. They'll just go buy the disc. The premium price is about watching it NOW and not in 3-6 months whenever the release it digitally across the market. If that price point or delivery method is not agreeable with you, you are going to end up buying it anyway when it's available. Or just stay subbed to D+ in 6-12 months when it goes to the platform.

 

[dlavender]

It's a new world. It's always better to start high and drop the price if there isn't demand. You really can't raise it dramatically if it's a success so why leave money on the table? They can always change the price to $20 after 4 weeks. They don't have to negotiate (I think) with anyone to do that.

That is true. I wonder if October it becomes $20 and November $10, assuming a Christmas D+ total rollout.

Really going to depend on initial demand and reviews. If it does extremely poor I doubt they go the stair step approach and most likely it goes straight to $10 or they just don't bother until its free.

 

[hertamaniac]

How are you losing money? If you release it simultaneously, no one is going to buy the $30 ticket price. They'll just go buy the disc.

I said the pricing delta is what you can control and drive the revenue models. In one model, you charge more for the DTB option since that gives ownership/sharing. But, the DTC via Disney+ can be at a lower initial price knowing longer term profits. I can play the number game and say the DTC could be $25 and the DTB could be $35. You build in the losses of not having a DTC via the DTB sell price.

 

[BrianL]

They didn't skip 3. https://en.wikipedia.org/wiki/The_Little_Mermaid:_Ariel's_Beginning

Man, I only knew about 2 - and the series of course.

 

[firefly_ris]

I will say we were all probably "thirstier" for content in March/April, but maybe not.

Yep, I think that definitely helped... Those 3 people? All people trapped in their homes in WNY in March with multiple young children. I was the only cheapskate who didn't break, lol.

 

[YesterDark]

That is true. I wonder if October it becomes $20 and November $10, assuming a Christmas D+ total rollout.

Really going to depend on initial demand and reviews. If it does extremely poor I doubt they go the stair step approach and most likely it goes straight to $10 or they just don't bother until its free.

Christmas is bluray, D+ won't be for another 3-6 months.

Just my guess.

 

[dlavender]

Christmas is bluray, D+ won't be for another 3-6 months.

Just my guess.

Could be.

I'm going Christmas D+ rollout, you are going March-June 2021 D+ rollout.

Who else is in?

 

[mattpeto]

Could be.

I'm going Christmas D+ rollout, you are going March-June 2021 D+ rollout.

Who else is in?

This will be one to watch for sure. Disney would set a bad precedent if Mulan goes free on D+ any sooner.

 

[ParrotBill]

I think the worry for some is this will become more frequent and could lead to other things that would’ve probably been included in Disney+ to now be an up charge.

Yep. And that it is such a steep upcharge and hangs by the thread of your subscription. That charge is FIVE movie tickets! Someone sat there and said well the average family of 3 will watch it twice so we will give them a bargain and price is LESS than the cost of 6 movie tickets! Hooray for us! If it success we will see more of this kind of "early access" money grabbing... which means later access for those wanting to buy in Vudu or wait for free access in Disney+. It's creating a tiered system of privilege for those who can throw money at these things. That's unfortunate but a pattern we've seen emerging at the parks too.

 

[Jrb1979]

Yep. And that it is such a steep upcharge and hangs by the thread of your subscription. That charge is FIVE movie tickets! Someone sat there and said well the average family of 3 will watch it twice so we will give them a bargain and price is LESS than the cost of 6 movie tickets! Hooray for us! If it success we will see more of this kind of "early access" money grabbing... which means later access for those wanting to buy in Vudu or wait for free access in Disney+. It's creating a tiered system of privilege for those who can throw money at these things. That's unfortunate but a pattern we've seen emerging at the parks too.

It was only a matter of time. These companies need to get the money they lost from all the cord cutters. So now they will charge more for streaming.

 

[BrianL]

Yep. And that it is such a steep upcharge and hangs by the thread of your subscription. That charge is FIVE movie tickets! Someone sat there and said well the average family of 3 will watch it twice so we will give them a bargain and price is LESS than the cost of 6 movie tickets! Hooray for us! If it success we will see more of this kind of "early access" money grabbing... which means later access for those wanting to buy in Vudu or wait for free access in Disney+. It's creating a tiered system of privilege for those who can throw money at these things. That's unfortunate but a pattern we've seen emerging at the parks too.

Five movie tickets? Here even the matinee is $9.00 for adults (I think kids are $7 but not sure). Evening prices are I think $12.00, and higher for 3D or IMAX - and this is a relatively cheaper market. I wish movie tickets were still 6 bucks! I think the $30 is a bit steep considering you must also have D+, but it's in the ballpark. I think they are experimenting with what the market will sustain.

 

[TwoMisfits]

Five movie tickets? Here even the matinee is $9.00 for adults (I think kids are $7 but not sure). Evening prices are I think $12.00, and higher for 3D or IMAX - and this is a relatively cheaper market. I wish movie tickets were still 6 bucks! I think the $30 is a bit steep considering you must also have D+, but it's in the ballpark. I think they are experimenting with what the market will sustain.

Discount Tuesday became as busy at theaters as Saturdays in the last 2-3 years (it was so big, the movie market would comment on it). The joke was the discount Tuesday was family movie day...and families came out in force for the $5-$6 tickets (depending if you were in a suburban or urban market).

Only other family showings that sold out so quickly so far ahead were 1st weekend 1st showing discounted matinees...

So, most middle class families were paying $5-$6/ticket for most family movies...and that's gonna be 5-6 tickets at this price point...

 

[karly05]

Could be.

I'm going Christmas D+ rollout, you are going March-June 2021 D+ rollout.

Who else is in?

I agree with @YesterDark.
The $30 Sept release on D+ is their substitute for a theatrical release.
Blu-Ray/Digital purchase releases of these things had gotten down to about 3 months post theatre release pre-Covid, and Blu-Ray in time for Christmas seems logical.
Timing for "free" D+ has been weird this year, but I'll take a general "next spring."

 

[dlavender]

I agree with @YesterDark.
The $30 Sept release on D+ is their substitute for a theatrical release.
Blu-Ray/Digital purchase releases of these things had gotten down to about 3 months post theatre release pre-Covid, and Blu-Ray in time for Christmas seems logical.
Timing for "free" D+ has been weird this year, but I'll take a general "next spring."

That does seem the most logical.

I still think it doesn't do that well and they cover by releasing it site wide to up subscriptions over the holidays.

We will see.