Column: What Mulan Could Mean for Disney+ and the Future of Movie Distribution

Kelly O'Grady
Kelly O'Grady is dot.LA's chief host & correspondent. Kelly serves as dot.LA's on-air talent, and is responsible for designing and executing all video efforts. A former management consultant for McKinsey, and TV reporter for NESN, she also served on Disney's Corporate Strategy team, focusing on M&A and the company's direct-to-consumer streaming efforts. Kelly holds a bachelor's degree from Harvard College and an MBA from Harvard Business School. A Boston native, Kelly spent a year as Miss Massachusetts USA, and can be found supporting her beloved Patriots every Sunday come football season.
Column: What Mulan Could Mean for Disney+ and the Future of Movie Distribution

Looking for something to do this holiday weekend? Grab the (microwaved) popcorn and 'let's get down to business.'

Disney is releasing its live-action remake "Mulan" on Disney+, with potentially groundbreaking implications for how tentpole films are usually released.

If you're a Disney+ subscriber, you can gain exclusive access — but you will have to pay $29.99 on top of the monthly subscription fee. To purchase, head to your Disney+ app on Apple, Roku and Google platforms or to Disney+'s website. You'll retain the film for as long as you remain a Disney+ subscriber. But if you're planning to catch "Mulan" when it's added to the general Disney+ library, you'll have to wait until December 4th.

I worked as a senior analyst at Disney when it was just beginning to devise how to bring its content direct-to-consumer. This is another shrewd business experiment for the media giant to test out a little disruptive distribution. Streaming has become a core part of its strategy as the pandemic wreaks havoc across traditional revenue streams. And as many users hop between streaming services, the "Mulan" release may give Disney+ a well-timed incentive to keep customers from cancelling subscriptions while they await the next season of "The Mandalorian." Giving its users sustained access to one of 2020's only films — and a key addition to its princess franchise at that— could give Disney+ a stickiness advantage over its competitors.

So how should you evaluate whether Mulan's release is a success?


The New Economics of the Release

Let's consider the pure revenue economics of the film. From the outset, the potential audience pool is smaller compared to a wide theater release. By limiting purchases to Disney+ subscribers, you eliminate the prospect of reaching every individual that has access to a theater. And while not everyone frequents theaters regularly, the number is certainly higher than the service's subscriber base.

"Mulan"'s debut may incentivize new Disney+ sign ups though, adding to an already hefty base of around 60 million subscribers. Now, "Mulan" is the first Disney live-action remake to receive a PG-13 rating for "sequences of violence" — something which may deter parents from picking it for family movie night — but that could be counterbalanced if the movie can draw in the young male demo, where strong female-led films tend to struggle.

These recent live-action films have grossed anywhere from around $400M to $1.7B worldwide. A key caveat to remember is that on Disney+ entire families will watch "Mulan" together, rather than purchasing a separate ticket for each viewer at the theater (families, this is actually a steal for you). So if we assume "Mulan" measures up against its peers creatively, roughly a quarter of those 60M subscribers would have to pay $29.99 to compete on the low-end performance of ~$400M. And to pass the coveted $1B mark? Over 50% of Disney+ users would need to purchase access.

Now, this back-of-the-envelope math solely considers Disney+ and does not take into account that "Mulan" will receive a traditional release in countries where cinemas are open and Disney+ is not available — like China. Regardless, the Disney+ release will have to convert a significant portion of its base to bring in as much as a traditional theatrical release — albeit a base of proclaimed Disney fans.

Streaming Subscriptions

The complicating factor is that a dollar spent with the streaming platform is more valuable to Disney than one spent at the theater. With a traditional release, cinema distributors take about 40-50% of box office revenue over a film's run, whereas an Apple or Google will only take 30%. And if a subscriber purchases directly via the Disney+ website, Disney keeps 100%… not to mention the increased revenue from potential new signups. It is an intriguing nuance that will certainly impact Disney's evaluation of future release strategies.

Business Unit Monetization

The other key aspect is the business unit halo effect. What makes Disney special is its franchise monetization engine. Although difficult to quantify, Disney evaluates how intellectual property can be leveraged beyond a film, into merchandise, experiences, and spin-offs. Social distancing has revealed where that engine is vulnerable. Disney won't be able to repeatedly engage fans on a theme park ride or at retail stores, which could make it difficult to build a strong franchise. The Disney+ release will not address those challenges. Further, downstream revenue from DVD and digital sales will suffer from this move. There is no need to buy another copy of "Mulan" when your purchase lives in your Disney+ app.

Branding and Data

There is significant upside to be captured, though. When subscribers can rewatch "Mulan" whenever they like, it makes it much easier and faster for Disney to create a legion of superfans and to build brand affinity. Further, the direct access to "Mulan" purchasers' data is invaluable — something impossible to capture for theatergoers. When the pandemic does pass, Disney will have a more sophisticated understanding of its fans and can use that to better engage consumers across its businesses. They will know you're not only a "Mulan" fan, but that your family also frequently watches "Frozen"; don't be surprised if you get a targeted invite to hang with Olaf at the parks.

With all these dynamics at play, how the "Mulan" experiment turns out will have important repercussions not just for Disney, but Hollywood in general. While I doubt the movie's success or lack thereof will completely overhaul the way movies are currently released, I think that we will see lasting changes, from the way studios experiment with a variety of distribution methods to a reduction of the length of time movies stay in theaters.

Different studios are likely to have different strategies for each of their films, but the belief that a tentpole movie needs to start with a theatrical release is about to be tested.

___

Kelly O'Grady heads up video for dot.LA and serves as chief host & correspondent. You can watch her speak about Disney here. Find her on Instagram @kfogrady and email her at kelly@dot.LA.

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Fuel Innovation: 7 Unforgettable Team Building Experiences in LA
Image Source: Discover LA

In today's competitive business landscape, team building activities have emerged as a crucial tool for fostering a positive work environment, enhancing productivity, and crucially, improving employee retention. Studies have shown that such activities help employees feel valued, with one report indicating that 93% of those who felt appreciated were more motivated at work. Importantly, team building events may improve retention rates, as employees who feel connected to their colleagues and company culture are more likely to stay long-term. With these benefits in mind, let's explore some of the most engaging and effective team building activities available in Los Angeles.

Pickleball

Image Source: Modern Luxury Angelino

Pickleball is a fantastic team bonding activity because of the easy-to-grasp rules and gentle pace make it perfect for everyone, regardless of age or fitness level. The game thrives on communication and teamwork, as players must collaborate and strategize to outplay their opponents, boosting team cohesion. Plus, the lively, fast-paced action sparks friendly competition and laughter, creating a fun and spirited atmosphere that brings everyone closer together. Los Angeles boasts numerous pickleball courts that are easy to rent if you have your own equipment. If you need additional assistance organizing your pickleball outing, there are plenty of full-service companies ready to handle every detail for you.

Resources: Pickle Pop, Corporate Pickle


Escape Room

Image Source: The Escape Game

Escape rooms are a great way to build camaraderie. They require participants to work together, combining their problem-solving skills and creativity to overcome challenges and puzzles. The immersive and time-sensitive nature of escape rooms fosters collaboration and communication. Additionally, the shared experience of tackling complex tasks and reaching a common goal helps build trust and foster positive emotions among colleagues.

Resources: The Escape Game, 60Out


Day Trip to Catalina Island

Image Source: Love Catalina

Catalina Island is a perfect day trip for a team because it provides a break from the usual work environment, allowing team members to relax and connect in a new setting. Shared experiences during the trip, such as exploring new places and participating in fun activities, help build stronger relationships and foster a sense of camaraderie. There are numerous team-building activities such as an arboreal obstacle course, an island tour, scavenger hunts and more.

Resources: Catalina Island Group Activities


Top Golf

Image Source: Topgolf

Topgolf is an excellent team building event because it provides an inclusive, relaxed atmosphere that accommodates players of all skill levels, fostering personal connections and improving team morale. The unique blend of competition and entertainment creates an ideal setting for building trust, enhancing communication, and revealing hidden skills among team members. Additionally, Topgolf offers structured team building packages with guided activities, discussion prompts, and lessons on culture, change, collaboration, and strategy, making it a versatile and effective platform for strengthening relationships and boosting overall team performance.

Resources: Topgolf El Segundo


SoFi Stadium Tour

Image Source: Discover LA

A SoFi Stadium tour offers a unique, behind-the-scenes experience of one of the world's most advanced sports venues, allowing team members to explore exclusive areas like premium suites, team locker rooms, and the player tunnel together. The tour provides a shared, memorable experience that can foster camaraderie and spark conversations among team members, regardless of their interest in sports. Additionally, the stadium's state-of-the-art features and impressive architecture can inspire creativity and innovation, while the group setting encourages interaction and collaboration, making it an engaging and enjoyable activity for teams of various sizes and backgrounds

Resources: SoFi Stadium Group Tours


Corporate Volunteering

Image Source: L.A. Works

Volunteer work serves as an excellent team building activity by uniting employees around a shared, meaningful cause, fostering a sense of purpose and collective accomplishment. It provides opportunities for team members to collaborate in new ways, often revealing hidden strengths and leadership qualities that may not be apparent in the regular work environment. Additionally, engaging in community service can boost morale, enhance the company's reputation, and instill a sense of pride among employees, leading to improved workplace relationships and increased job satisfaction.

Resources: Habitat for Humanity, L.A. Works, VolunteerMatch


Corporate Improv Sessions

Image Source: Improv for the People

A corporate improv class encourages spontaneity, creativity, and quick thinking, skills that are valuable in the workplace. It promotes active listening and collaboration, as participants must work together to create scenes and respond to unexpected situations, fostering better communication and trust among team members. Additionally, the playful and often humorous nature of improv helps break down barriers, reduces stress, and creates a shared positive experience that can improve team morale and cohesion long after the event.

Resources: Improv-LA, Groundlings, Improv for the People

🎬 Paramount and Skydance Are Back On
Image Source: Paramount

Happy Friday Los Angeles! Hope you all had a fantastic Fourth!!

🔦 Spotlight

Paramount and Skydance Media have rekindled talks to merge after negotiations abruptly halted in June. The proposed deal, contingent on approval from Paramount’s board, aims to combine Paramount’s extensive media holdings—including CBS, MTV, and Nickelodeon—with Skydance’s film expertise showcased in hits like "Top Gun: Maverick." This merger signals a potential transformation in the media landscape, positioning the new entity to compete more effectively amid challenges from streaming services and the decline of traditional cable TV.

Led by Shari Redstone, Paramount’s controlling shareholder via National Amusements, the deal represents a pivot towards revitalizing Paramount’s strategic direction amidst financial struggles and shareholder concerns. The involvement of major investors like RedBird Capital Partners and David Ellison underscores the financial backing aimed at stabilizing Paramount’s operations and addressing its $14 billion debt burden. Importantly, the agreement includes provisions to protect National Amusements from potential legal challenges, addressing previous hurdles that stalled earlier negotiations.

The deal also includes a 45-day period for Paramount to explore alternative offers, highlighting continued interest from other potential buyers like Barry Diller’s IAC and media executive Edgar Bronfman Jr. This flurry of activity underscores the significant stakeholders’ interest in Paramount’s future and its potential as a key player in a rapidly evolving media industry.


🤝 Venture Deals

LA Companies

  • Sidecar Health, a startup that offers personalized health insurance plans to businesses that allow members to see any doctor and pay directly at the time of service, raised a $165M Series D led by Koch Disruptive Technologies. - learn more

LA Venture Funds


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