As expected, Walt Disney Co.’s second quarter earnings this week were not positive. The media giant reported a 90% profit dip in Q2 as a result of business stresses caused by the COVID-19 pandemic. And for its main holdings like theme parks, sports broadcast rights and movie releases, we don’t have much information about when those parts of Disney will be back up and running yet.
Where Disney could control at least parts of its own destiny is with regard to streaming services — namely Hulu and Disney+. In April, TV[R]EV noted that all eyes would be on the two services to buoy Disney’s business in the coming months. While that may still be the case, Tuesday’s earnings call did not provide a ton of new information about how that would be done.
First, the good news: Disney says it now has 54.5 million global subscribers, which is second-most among all services — only behind Netflix (at 182.9 million). It’s large number, to be sure, though it’s also at least boosted in part by various sign-up deals. David Bloom wrote more about how Disney got to $50 million here, but despite the obvious caveat around self-reported numbers, Disney’s gradual expansion is picking up interest, even if the platform isn’t necessarily stocked with new video inventory.
Therein lie the questions going forward, however. While archival shows and movies, plus a handful of new series like the hit Star Wars spin-off “The Mandalorian,” were there at launch last November, they were supposed to give way to a fleet of new shoes rolling out in 2020. That hasn’t really happened to-date. And coronavirus concerns halted production on some of the biggest draws for the service, including Marvel shows like “The Falcon and the Winter Soldier” (scheduled for August) and “WandaVision” (December). We already knew that season two of “The Mandalorian” was still on schedule for October since it finished production early enough.
Earnings was a possible chance to address more on Disney+ plans and streaming strategy overall. Instead, we got “more questions than answers” as MarketWatch put it. And financial analysts expressed uncertainty as well following vague ideas around future digital film releases. Those films, as Disney noted, are headed to streaming on a case-by-case basis. Okay, so when do we know more about those cases?
With the live-action remake of Mulan still planned (rescheduled) to hit theaters in July, that’s likely to be the standard-bearer on planned cinematic releases. Should the film be rolled out in theaters to minimal fanfare and decreased audiences, perhaps it’s pulled to Disney+ (as Disney’s Onward was earlier this year). Doing so (or not) could also provide signs of how and when Marvel’s Black Widow is released as well. The movie — Marvel’s 24th and first since last summer — was set to be released in early May 2020 before theater closures pushed it to November.
Perhaps this is the more cynical view, but I don’t see a reality where theaters are crowded enough in 2020 to help any of these box office numbers hold a candle to what previous Disney movies (especially the billion-dollar Marvel films) have managed in recent years. That doesn’t mean theater releases won’t be able to make money at all. But with some sort of “Disney+ Box Office” rental program that costs $15-20 per month on top of the Disney+ subscription, perhaps that’s the better (and more lucrative) release method for the time being.
Despite not having the religious following Disney and Marvel respectively possess, Universal’s Trolls World Tour had a record digital release weekend in April — so much so that it led to a war of words between Universal and theater-owner AMC. Disney is likely waiting to know more before entering into their own theater spat. But realistically, the decision could very well be made for them.
For the time being, Disney+ can still be a liferaft for its parent company, but it’s still hard to tell exactly how right now. Adding more archival inventory is fine, but at some point, it’s not going to help add any more subscribers. New movies can do that. New shows — including animated ones that can potentially be handled without being on-site — can, too.
Disney+ still has a bright future for the company, but it needs a plan going forward. Just because initial ideas for 2020 were scuttled doesn’t mean the service can’t develop new plans to find some footing with its content once more.