A little over a week ago, we shared that Disney and Pixar’s Soul, which was originally scheduled for a theatrical release, will be released directly on Disney+ in December.

But, interestingly, the film will not be released at an additional cost like Mulan was. Why has Disney chosen this free, digital release route for Soul, and what could it mean for future films? We have some thoughts.

Let’s recap.

Soul was first announced some time ago, and Disney fans got an exclusive look at the film during last year’s D23 Expo. Originally, the movie was set to debut in the summer of this year. Due to the global pandemic, however, that release date was rescheduled to November 2020.

It was then announced that it would be skipping the theaters altogether and premiering directly on Disney+ in December for FREE! It’s not a purely digital release though.

In international markets where Disney+ is not available, Soul is set to be released theatrically but the release dates have not yet been announced. So let’s focus on that Disney+ release and what it means. 

Why Disney+?

Disney+ has undoubtedly been a success in Disney’s eyes. The company originally set a goal to have a subscriber base of 60 to 90 million within 5 years of its launch. As of August 3rd, 2020, Disney+ officially has 60.5 million subscribers and it has not even fully launched in all countries around the world. Yep, in just around nine months they hit their goal they were expecting closer to five YEARS. Crazy. 

In a press release about the film, Disney noted that “With over 60 million subscribers within the first year of launch, the Disney+ platform is an ideal destination for families and fans to enjoy a marquee Pixar film in their own homes like never before.”

This isn’t the first time a Disney movie has moved from theaters to Disney+ and not the first time that a movie has moved to the digital platform for free. Onward, which had a very limited theatrical run, cut off by COVID-19, was very quickly made available to purchase digitally, and later made its way to Disney+ for free. Both Artemis Fowl and The One and Only Ivan moved from theatrical to digital releases, and premiered on Disney+ for free.

So what about Mulan? Disney pushed its release a number of times before ultimately choosing to release it on Disney+ for an additional fee. They also announced it would eventually be available on the streaming service for free.

Disney is not alone in making these changes though, Variety has a whole list of over 30 films that were supposed to debut in theaters, but instead were released or are set to premiere on some kind of digital service instead.

There’s no denying that Disney is focusing much of its energy now on digital content. Recently, the company announced a massive restructuring of its entertainment and media divisions “with the primary focus being the Company’s streaming services.” In fact, Bob Chapek told CNBC that they are “tilting the scale pretty dramatically [toward streaming]” and seeks to increase its spend on new content.

Chapek also noted that managing the “content creation distinct from distribution will allow [Disney] to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it.”

CNBC notes that Disney is becoming more reliant on Disney+ because movie theaters have not been able to recover after the extensive closures due to the COVID-19 pandemic. But will the increased moves to digital streaming will only further hurt movie theaters?

Impact on Movie Theaters

While some fans may be thrilled to see this and other movies from the comfort of their own homes on Christmas day, many cinemas have been less than pleased. According to Variety, European cinema operators have said they’re “devastated” and “shocked and dismayed” by Soul‘s move to Disney+.

The International Union of Cinemas, which represents European cinema operators, said: “The vast majority of cinemas across Europe and indeed many regions of the world are now open and able to offer a safe and enjoyable return for audiences. Cinema operators have invested massively in offering the safest possible experience to their audiences on the basis of a promising schedule of new film releases.”

According to UNIC, the decision is “doubly frustrating for operators who were counting on the release after the film was previewed at a number of key European film festivals.” The UNIC feels that the release of new films “will make all the difference in encouraging people back to the big screen.” UNIC says decisions to bypass cinemas “will only delay the day that the whole industry is able to put this crisis behind it,”

Basically theaters are itching for a BIG family hit movie to be released so they can draw back the crowds. Soul could have possibly been it, and now that opportunity is gone.

The impact isn’t just being felt internationally. AMC Theatres has shared, as further published by CNN Business, that its cash would be soon depleted due in part to the reduced movie slate. In fact, AMC Theatres has shared that its existing cash reserves would be “largely depleted” by the end of 2020 or beginning of 2021. The shortage of blockbuster films has proven to be a significant problem for movie theaters. Aside from COVID-19 concerns, if there’s nothing “good” or “big” to see in the cinemas, why go?

But, Why is Soul Free?

When Mulan first premiered on Disney+, it did so at an additional cost, although it will eventually be available on the service for free. So, why is Soul being offered for free from the get-go? Disney has not made a statement on this, but this is what we’ve seen. As Market Watch notes, the decision to charge an additional $30 to see Mulan early had fans divided. Some felt the amount was worth it, while others indicated they would not pay the amount and would instead just wait until the movie is released for free in a mere matter of months. 

Some sources indicate that Mulan could have made $261 million in U.S. markets alone based on data collected between September 1st and September 12th, although others point out that these are only guestimates. Some indicate that Mulan made just over $30 million based on Disney+ subscriptions in its opening weekend, placing it very much in the “flop” category. Just how much money Mulan actually made is unclear, as Disney hasn’t shared that information. But Business Insider suggests that the decision to bring Soul to Disney+ for free could show that Disney was not particularly pleased with Mulan’s earnings.

Even if those weren’t the numbers Disney hoped for or expected for the film’s theatrical release, wouldn’t it be better to charge something for Soul and at least make SOME money, rather than none? One might think so. But, perhaps Disney is banking on the likelihood that the release of Soul will (like Mulan and Hamilton) will cause a significant increase in subscriber base and it’s possible that Disney is comfortable enough relying on this source of income, as well as merchandise, for the moment.

It’s possible Disney also took into account the divisive effect caused by their decision to release Mulan at an extra fee, and determined that they did NOT want to go through that again.

During a conference held in early August of this year, Bob Chapek indicated that Disney was “looking at ‘Mulan’ as a one-off as opposed to saying there’s some new business windowing model that we’re looking at,” according to Variety. It is possible that Chapek’s statement is true and Mulan was, in fact, a one-off.

Business Insider also notes that Soul is different being an animated film and likely cost far less to produce than Mulan, making a “free” release less financially detrimental.

What Could This Mean?

On the one hand — this change to a digital release for Soul could point to a greater increase in direct to digital premieres for more Disney movies in the future, either free or at an additional cost. Some investors have called on Disney to end its annual dividend to “divert more capital to new Disney+ content.”

But we have already seen that Disney is not jumping on the streaming bandwagon entirely. For example, instead of moving Marvel’s Black Widow to a streaming platform, the film is still set to debut theatrically, but the release date has been pushed back to 2021. Are they expecting the massive $$$ openings we’ve seen with other Marvel films and not willing to risk losing that going straight to digital?

While Disney may be refocusing much of its energy on digital streaming, Wired says that this won’t ultimately change Hollywood or result in similar changes from other studios. Why? Because other studios are not Disney.

Disney entered the streaming service with a MASSIVE back catalog of family classics, Star Wars films, and a whole “superhero team” including Fox, Pixar, ESPN, National Geographic, and Marvel, which is significantly more than other studios had to offer.

Wired notes that while some studios have shuffled a few of their movies to be available on streaming platforms, most other studios have opted to simply delay their release dates. Disney’s decision to move more theatrical films to digital release, according to Wired, shows that they “can burn off a title here and there and still remain ahead.” Disney’s movies accounted for approximately 33% of the total US box office in 2019. Disney’s closest competitor only accounted for 14%.

Still, just because Disney can afford to “burn off” some of its titles, does it mean it can afford to burn off MORE of its titles in the future? Not necessarily. It just means they can afford to do so…for now.

Disneyland faces a multi-million dollar loss due to its continued closures, and Disney has announced massive layoffs, so even though the Company is sitting on quite a bit of cash, things aren’t all perfect in the House of Mouse.

Some analysts have estimated that Disney’s earnings may not return to last year’s levels until 2024, international tourist spending may not return to normal until 2024, and Disney theme parks will have another lost year in 2021. Losses in one section of the company could impact other areas.

If the company begins to deplete its funds without a sufficient replenishment from movie releases, merchandise, theme parks, or other divisions, we may see more films delayed instead of released directly on streaming, or we could see films released for an additional cost, or the price of Disney+ may be increased. At this point it’s too soon to say which way the company will go.

Ultimately, Disney will need to and likely will continue to pivot and adjust to determine the best strategy to make the money it needs to pay its creatives to develop unique content for fans.

Click here to watch the new trailer for “Soul”!

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The post Why Is Disney Offering ‘Soul’ for Free and What Could This Mean For the Future of Films? first appeared on the disney food blog.