Is Disney Rethinking Its Disney+ Film Release Strategy? What You Need To Know

Walt Disney Co DIS appears to be rethinking its use of the Disney+ streaming service for the release of feature films, with one new production avoiding the streaming service for a theatrical-exclusive opening and another film that went directly to streaming being offered in the lucrative Chinese theatrical market.

Only In Theaters: According to a Variety report, Disney’s new science-fiction comedy “Free Guy” starring Ryan Reynolds is opening on Aug. 13 only in theaters, with a Disney+ debut occurring 45 days after it hits the big screen.

“Free Guy” is the first Disney theatrical release this year that hasn't been sent forth with a simultaneous premiere on Disney+. “Cruella,” “Black Widow” and “Jungle Cruise” were presented for both moviegoers and Disney+ subscribers willing to pay an extra $30 viewing fee.

However, Disney received a very rare public rebuke from the National Association of Theater Owners, which claimed the simultaneous Disney+ release of “Black Widow” contributed to the film’s significant decline in box-office revenue after its opening day.

The studio also received the public relations equivalent of a black eye when “Black Widow” star Scarlett Johansson sued the studio in a breach-of-contract lawsuit, claiming her salary was pegged to a theatrical-only release and that the Disney+ presentation diluted her earnings.

Disney hasn't announced whether its upcoming high-profile films including “Shang-Chi and the Legend of the Ten Rings,” “Eternals,” “West Side Story” and “The King’s Man” will be theatrical-only releases or if they will continue the dual release strategy.

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Coming to China: Separately, Disney’s Pixar animated feature “Luca” has been scheduled for a theatrical release in China, which maintains a quota on the distribution of films from outside of the country. This will be the first U.S. film seen by Chinese audiences since June.

“Luca” is being released in China ahead of its features that are playing or are scheduled to play in U.S. theaters, according to the Hollywood Reporter. “Luca” was supposed to be released in U.S. theaters on June 18, but the studio shifted it directly to Disney+ while citing concerns over the lingering COVID-19 pandemic for its decision.

However, keeping “Luca” out of U.S. theatrical release may have been a big mistake, as animated films are traditionally a sure-bet at the box office. “Luca” was released in international markets where Disney+ isn't available and has grossed $30 million to date; the studio gave “Luca” a one-week theatrical release in Los Angeles in June in order to qualify the film for Academy Award consideration.

And the COVID-19 excuse doesn’t seem to hold up when one considers Disney gave theatrical releases to “Raya and the Last Dragon” in March and “Cruella” in May. “Luca” would have been in theaters during a lull in the pandemic, when a greater degree of societal normalcy was restored and the threat from the Delta variant had yet to take root.

Photo: Ryan Reynolds in "Free Guy," courtesy of Disney.