Disney said on Tuesday, in a surprise move, that its blockbuster feature "Mulan," which has been delayed from its theatrical release since mid-March, will hit Disney+ on Sept. 4, for a premium price of $29.99.
The film will be simultaneously released theatrically in certain markets that have open theaters and where the company hasn't announced plans to launch Disney+. It will be Disney's first effort to sell content on Disney+, on top of the monthly $6.99 subscription.
"We see this as an opportunity to bring this incredible film to a broad audience, currently unable to go to movie theaters, while also further enhancing the value and attractiveness of a Disney+ subscription with this great content," CEO Bob Chapek said during an earnings call.
As of Monday, Disney+ reached 60.5 million paid subscribers, hitting its goal of 60 million to 90 million subscriptions by 2024 four years early. The addition of "Mulan" to its catalog could entice even more subscribers to the service.
With the stipulation that Disney will release the film in regions where it doesn't plan to launch its streaming service, that means the film will likely reach Chinese viewers in theaters. "Mulan" was expected to be a big boon for Disney in China during its initial slated release back in March.
Canada, Australia, New Zealand and a number of countries in Western Europe, will also have access to the Disney+ version of the film.
The on-demand price tag is much steeper than usual and could go a long way to help recoup studio losses from earlier in the year. The economics are potentially even more favorable for Disney because the film is being launched on Disney+, not on traditional cable on demand, which means the company doesn't have to split the revenue.
"The rule book is being re-written to accommodate these unprecedented times, said Paul Dergarabedian, senior media analyst at Comscore, in an email. "Thus it should come as no surprise that unusual steps (some of which would have been unthinkable just a few short months ago) are being taken by many media companies to deal with the ever-changing marketplace dynamics that are in play during the pandemic."
"Mulan" had a production budget of around $200 million and a marketing budget that likely approached half that amount, so the company couldn't just put the film on Disney+ for no added cost.
"In terms of the premier access idea, as you probably know, Disney tent-pole blockbuster theatrical films can be fairly expensive to make and produce in order to get the quality that consumers expect from us and frankly to get the quality that we expect from us," Chapek said, adding that it's testing this model.
"We thought we would give it a try to establish a new window of premier access, to try to recapture some of that investment," he said. "We're going to have a chance to learn from this and to see whether that makes sense."