Disney 18+??

Disney is bowing to certain market realities.

No, not about Minnie.  Get your filthy mind out gutters.

I’m talking about Black Widow.  Mickey the Great and Terrible has been holding back Natasha’s first (and likely, only) solo outing from a theatrical release for months now.

However, it now looks like she is going to follow in Wonder Woman’s footsteps and be dumped on streaming.

Hollywood is without question an SJW wasteland but when it comes to business matters, they are as conservative as you can get. No real surprise there, since movies are by their nature a pretty high-risk business and all companies try to manage risk as best, they can. Frequently, American film studios are the slowest to react to a new business opportunity. 

I saw an article not too long ago, (clearly written by a Millennial) that claimed that the VHS changed how we watched movies in the Seventies.  Except it didn’t.  The first attempt to do that was a laserdisc player and it was an epic fail (In the United States, Asia was a different story). Yes, it was overpriced and the media was read-only but that wasn’t the issue.

We just weren’t used to consuming movies on demand. It was a problem no one had.

Now a problem that everyone had was missing an episode of their favorite show. It’s hard to explain this to Millennials and especially Zoomers, but we structured our lives around our TV viewing schedule. Because if you missed an episode of your favorite show your only hope of seeing it was to wait for summer reruns. If you missed it then it was gone forever unless that series got picked up for syndication. There was simply no possible way to see it again.

Worse still was the torment of having two favorite shows on at the same time.

The VCR answered these problems that everyone had.

BUT it wasn’t a medium for watching movies in the privacy of your own home.

Not at first anyway. The studios still felt that re-releases of old movies every seven years or so, combined with sales to TV networks were the gooses that laid golden eggs. 

Their view of releasing movies on VHS was, “Are you kidding? Once that we publish a film, we can’t make money by re-releasing it. Worse still we would be giving up control of the product!” 

However, Young Turk producers finally made their case to the Studio Moguls.

Young Turk Producer: Look, boss, nobody is going to watch Eat My Dust or Breaker, Breaker in the theaters ever again. They are R-rated so the networks won’t buy them, and neither will UHF. Let’s give this video cassette thing a shot because we literally have nothing to lose here. There is no production expense at all because the movie is already made, and they are not making any money in the vault. Bottom line: anything we make is pure profit.

Old-Timey Mogul: Well, as you say our risk does appear to be non-existent, and perhaps there is a market for… HOLY SHIT! WHO JUST GAVE US THAT LICENSE TO PRINT MONEY?!?!

However, that was just the B-movies for a long time. The A-list movies stayed in the vault. In consequence, there were a few movies that took off on home video when they hadn’t in the theaters. Tron, Terminator, and Blade Runner off the top of my head. 

However, by the mid-eighties, it was apparent that the vault was a dead revenue stream. The reason was simple. Nobody would rush to see these movies in a theater ever again because we all knew that “sooner or later it will be out on tape.” 

By 1995 everything was out on tape within months of its release in the theaters.

They were quicker on the uptake when it came to DVDs. The view had switched to, “hey, a new format is a chance to sell our old content again.” Once a format was agreed upon there was a big push to put everything out on Blu-ray and eventually discontinue DVD as a format. That hasn’t really worked out because of a new and terrifying phenomenon called “Streaming.”

Corona came along at a big turning point in Hollywood. Everyone is starting up a streaming service which has led to another Young Turks Rebellion behind the scenes in Hollywood.

Young Turk Producer: Why are we pumping all this money into theater exhibited movies? The risk to reward is gigantic. It ties up a shitload of resources (which is to say money). And how big is the payoff when you add it all up? Sure, Variety likes to go on about this billion-dollar blockbuster or that one but at the end of the day, I ain’t seeing a billion dollars. The theater take is somewhere between fifty percent to seventy-five percent depending on the country. We have to pay a shit-ton in marketing. We get pealed on the exchange rates and then we also got to pay percentages to all the big stars in the production. And oh yeah, taxes and other bribes. Look at the Force Awakens; worldwide gross two billion, profit seven hundred million.

Old Timey Mogul: That was seven hundred million Disney didn’t have before.

Young Turk Producer: How much money did they make on John Carter?

Old Timey Mogul: Point. So, what do you have in mind?

Young Turk Producer: Change how we do business. Our business is streaming movies now, so lean forward and commit. Forget the mega-tentpole films. We need a ton of medium budget content that we can make quickly and stream instantly.

Old Timey Mogul: But what about the theaters?

Young Turk Producer: Screw. The. Theaters.

And the theaters were already in a lot of trouble even before the plague blew into town.

I recently discovered something.  That the money the studios gets from the theaters is on a sliding scale. During the opening week the studios get a criminal 90% of the revenue. With the box office take shifting toward the theaters in the next few weeks of release.  Ideally, this works out to something like a 50/50 split in the end with the studios using the early lion’s share to retire the junk debt they used to finance the movie.

The problem for the theaters is, what happens if the second- and third-weeks box office crashes through the basement?

Imagine how happy the theaters were with Ghostbusters (2016)? Or John Carter? Or Cats?  Bombs hit the theaters a lot harder than they used to.

On top of that, the studios have gobbled each other up. There are only the Big Four left standing.

When the multi-screen theater mega-plex came into being in the 1970s every single screen had a different film on it.  But by the time Corona hit, it was normal to have at least half the screens in one cineplex showing the same movie.

Films aren’t competing with each other like they used to. The tent-poles were so expensive that the studios went out of their way to avoid a release date that conflicted with another tent-pole.  That lead to a lot less big tent poles coming out.  Consequently, the theaters were making less and less money per screen. Naturally, they had to raise the prices (ticket price averages are up 105% over the past twenty years).

Which meant they sold less tickets.

Which meant they made less money.

Which meant they had to raise the prices.

Rinse and repeat until the nickelodeon collapses. There was a reason the theater chains were so pissed at Universal when they released Trolls World Tour on VOD back in April.

I don’t think it’s possible to overestimate the importance of Disney+ to Mickey the Great and Terrible.  Keep in mind I said it was ‘important’ to Disney Entertainment, I have not said that it is ‘profitable’ because that streaming service won’t be in the black for quite some time.  But that doesn’t matter so long as it fulfills the much more urgent task of keeping Disney’s stock price over-inflated.  Unbelievably Disney stock actually went up after it’s disastrous fourth quarter earnings call.  As of this writing it is sitting at near pre-plague prices.

And the only reason it’s doing that is the “success” of Disney +.  

Of course, there is very little doubt that Disney+ is a Potemkin’s Village kind of “success.”  The vast majority of the subscribers are free accounts that were given out promotionally.  And those few people who ARE paying for their subscriptions are doing so at the rate of $7 per month, (I don’t have access to Disney’s internal numbers so take it with a big grain of salt when), the Dark Herald declares; this is absolutely a loss leader price.  There is no way in hell Disney can be charging this little and turn a profit.

And right now, they don’t dare raise the prices.  Why? Because there would be quite a few cancelations then, and that would immediately damage the oh, so, precious stock price.

However, Bob Cheapek and company know that they have to find some way to make Disney + perform, somewhere near where they claim it’s performing. 

The answer is simple. A new subscription for tier; Disney 18+.

There is the chance that this leak is a fake.  I admit that. But this is exactly what Disney needs to do with their somewhat too family-friendly streaming service. 

Think about it.  They now own the very successful Deadpool franchise but can’t put it on Disney+.  Sure, they could put it on Hulu but Hulu ain’t the thing keeping those share prices afloat. Remember Hulu is EXCLUSIVE to the American market. Whereas Disney+ is already international. 

Besides, constantly vaulting Marvel projects between Disney+ and Hulu would create a lot of brand confusion when Mickey the Great and Terrible least needs it.

And VOD has not worked out for Disney.  Mulan was a catastrophic failure in every way available to it, critically, commercially and worst of all was public relations.  

At $7 a head, Disney+ is allegedly grossing about a half billion per month.  I personally doubt it’s doing anywhere near that well, but we’ll take them at their word as a “let’s pretend” thing.  Assuming (and this is a very bad assumption) that all of Disney+ subscribers go up to the 18+ plan that doubles the base fee, then Disney will be grossing close to a billion a month off of streaming.  At that point the drowning giant will have its nose above water and can start swimming again. 

More importantly, there are strategic decisions that have to be made at this point.  Black Widow is supposed to be the linking film between the Ironman era Avengers and the Captain Marvel era Avengers.  Marvel needs to get it out there before they can begin Phase IV.  A-N-D, Black Widow is probably costing about a million per month in interest payments alone. While Disney was clearly planning on this one breaking a billion dollars at the box-office, they have reached a point where the few hundred million they would claim as profit won’t make any kind of a difference to their current financial abyss. 

Black Widow is a potential blockbuster but it’s also a potential bomb.  Nobody knows if the audiences are coming back yet. And if it does bomb, the almighty Disney stock price takes a very unwelcome hit. Making it the halo property of a new streaming tier is zero (or at least very low) risk to Mickey the Great and Terrible’s corporate value.

Using it to headline a streaming tier that actually makes Disney money is the sensible thing to do.

Which is probably the best argument for the whole thing being fake.

Okay, I’m done here.