Disney, Warner Bros, Universal, and Paramount are currently locked in a cutthroat battle to dominate the streaming landscape. Each of these studios now has their own streaming service, but their approaches wildly differ at the moment. And the surprise wildcard to their hoped success? It’s too early to tell, but current signs point to movie theaters being one of the prime battlefields left to conquer, or in Disney’s case, re-conquer.
Netflix is undoubtedly the streaming titan at this current moment. The now 7-year-old service (in terms of original content) boasts over 74 million subscribers in the U.S. alone and over 207 million worldwide. That’s a staggering number compared to the competition. But Disney has seen rapid, unprecedented growth with the launch of Disney+ less than 2 years ago, achieving over 103 million subscribers worldwide as of Spring 2021. Remember, Disney+ is only available in around 50 countries (and counting) compared to 190 for Netflix, so major growth is still on the horizon.
A year ago, it seriously looked like Disney’s flagship service—not even getting into its sidekick hustles like Hulu and ESPN+—could be on a nonstop march to cultural dominance. But that victory lap might be a little premature. When looking at the films currently impacting pop culture, it’s hard to find a single Disney movie in 2021 generating the kind of interest it absolutely needs to fuel merchandising and theme park revenue.
Aside from its breakout Marvel shows, Disney is short on phenomenons.
That might sound like an unfair standard to levy against the company, but this is the cold state of Hollywood circa 2021. As films get more and more expensive to make, they require more and more billion-dollar juggernauts to keep the cash flow stable. Again, the real money comes from your pocketbook at Disneyland, when you buy a T-shirt with Luca and Alberto on it.
This is why Disney’s streaming strategy has been taking obvious notes from Netflix in a few major ways. In the case of Pixar films, they’re just dumping these movies on the service with almost no theatrical presence aside from what they need to satisfy awards parameters. Others, like Raya and the Last Dragon, Cruella, and the upcoming Black Widow, include theatrical wide releases in addition to premium-tier access on Disney+ for an extra fee. But as the summer movie season continues to heat up, this refocus on box office success might be too little, too late.
Looking at the highest-grossing films at the box office this year, Disney has been noticeably overshadowed by its “underdog” competition so far. With the exception of Cruella at #4 and Raya and the Last Dragon at #6 domestically, the studio that once carried 2/3rds of the highest grossing films worldwide in 2019 now trails by a huge margin to Paramount, Universal, and Warner Bros, who currently top the #1-3 spots respectively with A Quiet Place Part II, F9: The Fast Saga, and Godzilla vs. Kong.
What’s going on, here?
Some might blame Disney’s hyper-fixation on boosting streaming service subscriptions, seemingly at the expense of their box office prospects. But Warner Bros’ own up-and-comer app, HBO Max, has been even less restrictive with its movies being available to stream and see in theaters at the same time. Unlike Disney+, moviegoers have been able to stream big blockbusters on HBO Max for 30 days, right when they go to theaters. The result? Warner Bros currently claims 4 out of 10 titles on the highest-grossing films domestically, the most of any studio at the moment.
To be clear, a variety of factors need to be recognized for the sake of context. The timing of these releases and the hype around their presentation being “movie theater friendly” need to be considered (looking at you, Godzilla vs. Kong). But even critically panned films like The Conjuring: The Devil Made Me Do It and Mortal Kombat have been sizable hits for Warner Bros, regardless. Elsewhere, Paramount and Universal are still keeping a solid line of separation between their major blockbusters and their fledgling streaming services, which could be the main reason why A Quiet Place Part II and F9 currently own the #1 and #2 spots.
No matter how you slice the streaming pie, the strategy moving forward might start to weigh heavily again toward box office dominance. Unlike binge-able, episodic series that can carry conversations for weeks, movies just don’t make as big a splash when unceremoniously shuffled to streaming. There’s a good chance families at home perceive streaming originals as VOD titles, fairly or unfairly. The stigma of a film not being “good enough” for theaters is still a real thing for a lot of people scrolling thumbnails at home. And Netflix probably shares a big chunk of the blame.
Disney is poised for a box office comeback.
As we move into the second half of 2021, I think we can reasonably expect Disney to push hard on marketing their next few films as ones you need to see in theaters (then maybe watch later on Disney+). Black Widow will likely be a big hit this summer, but there’s also Shang-Chi, Jungle Cruise, Encanto, and Eternals. These films are all primed to find their way on the Top 10 chart this year, and that’s not mentioning some of Disney’s carryover content from the Fox deal. West Side Story, for example, has real potential to be one of 2021’s biggest movies during the holiday season, and by that point, we might be even closer to pre-COVID “normalcy” for the movie industry.
Even if we aren’t, one lesson from the streaming experiment of 2021 appears to be pretty clear at this point. Movies still have a stake in big-screen, event entertainment. Breaking through the noise of pop culture remains inextricably tied to box office success. And that will likely remain true even if theaters become niche venues within the next decade.