“Mulan” won’t be the last Disney+ movie you’ll have to pay extra to watch

A lot riding on this new strategy.
A lot riding on this new strategy.
Image: Disney
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Disney tested a new movie release strategy in September when it put Mulan on its streaming service, Disney+, and required subscribers to fork over $30 to access the movie—in addition to the $7 they already pay each month. It’s unclear how successful the experiment was, but Disney revealed it was promising enough that it will keep trying it with other content.

On its fiscal fourth quarter earnings call yesterday, Disney CEO Bob Chapek hinted that streaming subscribers should expect to see more movies with the “premier access” label come to Disney+. He declined to say how many subscribers paid the extra $30 for the film, or how much revenue the company generated from it.

Whatever those figures were, Chapek said he was pleased with them. That is, until a controversy of Disney’s own making may have torpedoed the film’s financial prospects. The end credits of Mulan revealed it was partially filmed in Xinjiang, a region in China where Muslims have faced human rights abuses. Disney also gave “special thanks” to various Chinese government agencies, including one that the US commerce department sanctioned last year for its links to detention camps. That set off a #BoycottMulan movement on social media.

“We saw enough very positive results before that controversy started to know that we’ve got something here in terms of the premier access strategy,” Chapek acknowledged. “What we’ve learned with Mulan is there’s going to be a role for it strategically within our portfolio of offerings.”

Not every big-budget movie will be streamed with the extra price tag. Pixar’s Soul, for instance, will be released on Disney+ next month at no additional charge. Chapek said the “lifeblood” of its streaming service is still providing its base level of subscribers with great content.

The conversation around Disney’s streaming release strategies was part of a mixed bag of an earnings report for the company. As expected, Disney lost money in the quarter ($710 million)—but not as much as Wall Street was expecting. Though Disney’s core financials remained a mess due to theme park and theater closures, its stock jumped about 7% immediately following the report, for one simple reason: the growth in streaming subscribers. Neither box office figures nor theme park sales are Disney’s key financial metrics anymore.

Disney+ added 13.2 million subscribers in the quarter, growing its total to 73.7 million less than a year after launch. So long as the platform is growing, investors are happy.

That’s one reason why Disney will keep tinkering with its unique Mulan release strategy. If it helps grow the streaming service and speed up its path to profitability, then the company may be willing to give up potential box-office revenue—even when theaters return to normal operation.