Last Friday, Walt Disney Co (NYSE: DIS) updated its 2021 schedule, announcing that its remaining films due out this year will all debut exclusively in theaters.
Encanto, a new musical with scores from Lin-Manuel Miranda, will get a 30 day exclusive run in theaters before migrating over to Disney+.
Meanwhile, hot ticket viewings such as Marvel's new "Eternals," directed by Oscar-winner Chole Zhao, and Steven Spielberg's reboot of a West Side Story," will run in theaters for 45 days. The same goes for Disney's other planned releases, including "The Last Duel," "Ron's Gone Wrong," and the "Kings Man."
The news came as a welcome lifeline for struggling cinema owners, whose difficulties filling seats during the pandemic era have only been compounded by major movie studios newfound habit of releasing many of their biggest titles straight to streaming, with Disney proving no exception.
Shares of AMC (NYSE: AMC) were up 3.05% on Monday following the announcement. However, shares of Disney opened the week slightly down.
AMC's CEO, Adam Aron, tweeted that Disney's move was a "smart, wise decision," adding that "AMC will sell boatloads of tickets for you!"
Disney's surprise change in distribution strategy was likely due to the spectacular performance of its latest Marvel title, "Shang-Chi and the Legend of the Ten Rings," over the Labor Day weekend.
The film managed to grab $90 million over the four-day period in both the U.S. and Canada, smashing all previous records set during the summer's final holiday weekend. The surprise results likely made it clear to Disney's top brass that the public was still willing to brave a trip to the movie theater despite resurgent COVID cases around the country.
"As confidence in moviegoing continues to improve, we look forward to entertaining audiences in theaters," said Kareem Daniel, Disney Media & Entertainment Distribution Chairman Kareem Daniel.
Nevertheless, Disney's strategy of releasing titles onto both small and big screens has proven fruitful thus far. 2021's top-grossing film, Black Widow, released both in theaters and on Disney+, pulled in $80 million from U.S. box offices during its opening weekend, while later earning $60 million from $30 at-home purchases of the film.
However, Disney's strategy has not been without controversy. The star of Black Widow, Scarlett Johansson, has launched a high-profile lawsuit against the studio, alleging its dual release cut into ticket sales, negatively impacting her compensation.
Nevertheless, before its debut, Disney saw "Shang-Chi," as a test-case for a "theater first" distribution strategy.
"On 'Shang-Chi,' we think it's actually going to be an interesting experiment for us," said Disney Chief Executive Bob Chapek ahead of the film's release in August. "The prospect of being able to take a Marvel title to the service after going theatrical with 45 days will be yet another data point to inform our actions going forward on our titles."
No doubt the rest of 2021 will give Disney even more data points to chew on.