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XColumn: 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.
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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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California Debates Data Privacy as SCOTUS Allows Abortion Bans
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
The United States Supreme Court called a Mississippi law banning abortion after 15 weeks constitutional on Friday, overturning the country’s founding abortion rights decision Roe v. Wade. The Supreme Court also upheld that there cannot be any restriction on how far into a pregnancy abortion can be banned.
When Politico first broke the news months before SCOTUS’s final ruling, a slew of bills entered Congress to protect data privacy and prevent the sale of data, which can be triangulated to see if a person has had an abortion or if they are seeking an abortion and have historically been used by antiabortion individuals who would collect this information during their free time.
Democratic lawmakers led by Congresswoman Anna Eshoo called on Google to stop collecting location data. The chair of the Federal Trade Commission has long voiced plans for the agency to prevent data collection. A week after the news, California Assembly passed A.B. 2091, a law that would prevent insurance companies and medical providers from sharing information in abortion-related cases (the state Senate is scheduled to deliberate on it in five days).
These scattered bills attempt to do what health privacy laws do not. The Health Insurance Portability and Accountability Act, or HIPAA, was established in 1996 when the Internet was still young and most people carried flip phones. The act declared health institutions were not allowed to share or disclose patients’ health information. Google, Apple and a slew of fertility and health apps are not covered under HIPAA, and fertility app data can be subpoenaed by law enforcement.
California’s Confidentiality of Medical Information Act (or CMIA), goes further than HIPAA by encompassing apps that store medical information under the broader umbrella of health institutions that include insurance companies and medical providers. And several how-tos on protecting data privacy during Roe v. Wade have been published in the hours of the announcement.
But reproductive rights organizations say data privacy alone cannot fix the problem. According to reproductive health policy think tank Guttmacher Institute, the closest state with abortion access to 1.3 million out-of-state women of reproductive age is California. One report from the UCLA Center on Reproductive Health, Law and Policy estimates as many as 9,400 people will travel to Los Angeles County every year to get abortions, and that number will grow as more states criminalize abortions.
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
LA Tech ‘Moves’: Adtech Firm OpenX Lures New SVP, Getlabs and DISQO Tap New VPs
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.
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Advertising technology company OpenX Technologies appointed Geoff Wolinetz as senior vice president of demand platforms. Wolinetz was most recently senior vice president of growth at Chalice Custom Algorithms.
Remote health care infrastructure provider Getlabs hired Jaime LaFontaine as its vice president of business development. L.A.-based LaFontaine was previously director of business development for Alto Pharmacy.
Customer experience platform DISQO tapped Andrew Duke as its vice president of product, consumer applications. Duke previously served as Oracle’s senior director of strategy and product.
Media company Wheelhouse DNA named Michael Senzer as senior manager of Additive Creative, its newly launched digital talent management division. Senzer was previously vice president of business development at TalentX Entertainment.
Fintech lending platform Camino Financial hired Dana Rainford as vice president of people and talent. Rainford previously served as head of human resources at Westwood Financial.
Kourtney Day returned to entertainment company Jim Henson’s Creature Shop as senior director of business development. Day mostly recently served as business development manager for themed entertainment at Solomon Group.
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
This Week in ‘Raises’: Miracle Miles Lands $100M, Fintech Startup Tapcheck Hauls $20M
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
In this week’s edition of “Raises”: An L.A.-based footwear company closed $100 million to boost its expansion into the global market, while there were Series A raises for local fintech, biotech and space startups.
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Venture Capital
Miracle Miles Group, an L.A.-based footwear company, raised a $100 million Series A funding round co-led by IDG Capital and Sequoia Capital China.
Deno, a San Diego-based software development startup, raised a $21 million Series A funding round led by Sequoia Capital.
Tapcheck, an L.A.-based financial wellness startup that helps workers access their paycheck before payday, raised a $20 million Series A funding round led by PeakSpan Capital.
Gemelli Biotech, an L.A.- and Raleigh, N.C.-based biotech startup focused on gastrointestinal diseases, raised a $19 million Series A financing round led by Blue Ox Healthcare Partners.
Epsilon3, an L.A.-based space operations software startup, raised a $15 million Series A funding round led by Lux Capital.
Global Premier Fertility, an Irvine-based fertility company, raised an $11 million Series C funding round led by Triangle Capital Corporation.
Vamstar, an L.A.- and London-based medical supply chain platform, raised a $9.5 million Series A funding round co-led by Alpha Intelligence Capital and Dutch Founders Fund.
System 9, an L.A.-based digital asset market-making firm focused on the crypto altcoin market, raised a $5.7 million Series A funding round led by Capital6 Eagle.
Myria, an L.A.-based online marketplace of luxury goods and services, raised a $4.3 million seed round from Y Combinator, Backend Capital, Cathexis Ventures and other angel investors.
Binarly, an L.A.-based firmware cybersecurity company, raised a $3.6 million seed round from WestWave Capital and Acrobator Ventures.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Decerry Donato (decerrydonato@dot.la).
- Vamstar Raises $9.5M For Its Medical Supply Chain Platform - dot.LA ›
- MaC Venture Capital Eyes $200 Million For Its Second Fund - dot.LA ›
- Los Angeles Venture Capital News - dot.LA ›
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.