Black Widow, Disney's highly anticipated Marvel movie, came out the gates as a box office hit. However, the hype quickly died, with sales declining both in theaters and on Disney+, followed by a lawsuit from the movie's star and backlash from theater owners.
So, where did Disney go wrong? This article will look into how Disney's hybrid release strategy backfired, as well as the implications thereof.
What Went Wrong With Black Widow's Hybrid Release?
For Black Widow, Disney implemented a hybrid release strategy (also known as a dual release strategy), which means that the company released the movie in theaters and on streaming platform Disney+ simultaneously. But what were the implications for Disney?
Disappointing Revenues After a Successful Initial Opening
The movie had the highest opening of the year among all theatrical releases in its first weekend, and raked in $60 million from Disney+, where Disney made the movie available to viewers at a rental price of $30 through its Premier Access tier.
In its second weekend, Black Widow's theater revenues fell by 70%, the second-biggest decline for a Marvel Cinematic Universe movie after 2018's Ant-Man and the Wasp. Disney also did not release figures relating to its performance on Disney+, which led to speculations that the streaming platform had seen a similar fate.
Related: How Disney+ Grew from 0 to 100 Million Subscribers in 18 Month
Scarlett Johansson, Black Widow's Star, Files a Lawsuit Against Disney
In July 2021, Black Widow star Scarlett Johansson filed a lawsuit alleging that Disney breached her contract by releasing the movie on Disney+ and in theaters simultaneously. Apparently, Johansson had signed a deal with the understanding that the movie would debut exclusively in theaters. Since the actress' payment is reportedly linked to performance, the simultaneous release with Disney+ resulted in a lower fee than expected.
The film had been delayed multiple times because of the COVID-19 pandemic. It was originally set to be released in May 2020. The suit comes at a pivotal moment for Hollywood, as the pandemic has changed the entertainment industry as we know it.
Streaming has become the focal point of Hollywood, while movie theaters and the box office struggle to return to normalcy following a pandemic that ravaged its business.
While other studios have followed same-day streaming and theatrical releases, the Black Widow news stood out because Marvel is the biggest blockbuster brand in Hollywood, bringing in nearly $23 billion at the global box office since 2008.
Black Widow's July 9 release was an immediate success for Disney, in theaters and streaming, bringing in $80 million in its North America opening in theaters and $60 million globally on Disney+. The film's momentum has slowed down since and now stands at roughly $318 million worldwide, which is low for a Marvel film.
Related: Disney+ Premier Access Is Likely Here to Stay With Reduced Theatrical Release Windows
Backlash Received From Theater Owners
It's no secret that movie theaters are fighting to stay open as the pandemic and related lockdowns have affected theater revenues. As a result, theaters have been fighting to get some exclusivity from movie releases, even with the changing entertainment landscape.
A dual-release strategy like the one Disney has followed with Black Widow only adds to the growing tug of war between theaters and streaming services. It's no surprise, then, that the National Association of Theater Owners (NATO) released a strongly worded statement criticizing Disney for releasing the movie in theaters and on its streaming platform simultaneously.
In a press release, NATO says that Black Widow suffered a “stunning collapse in its second weekend in theatrical revenues,” in addition to dropping an unprecedented 41% from Friday to Saturday during its opening over July 9 to 11. Citing reasons for the underperformance of the movie, NATO didn't mince its words:
Despite assertions that this pandemic-era improvised release strategy was a success for Disney and the simultaneous release model, it demonstrates that an exclusive theatrical release means more revenue for all stakeholders in every cycle of the movie’s life. The many questions raised by Disney’s limited release of streaming data opening weekend are being rapidly answered by Black Widow’s disappointing and anomalous performance. The most important answer is that simultaneous release is a pandemic-era artifact that should be left to history with the pandemic itself.
Evidently, some analysts and commentators are of the mind that a dual-release strategy only worsens the current economic situation that theaters are facing.
They are blaming Disney for losing out on valuable intellectual property revenues by choosing a simultaneous release date for its content, instead of the traditional, staggered strategy that might double revenues from the film.
Does Disney Think the Dual Release Strategy Is Here to Stay?
Disney has indicated that pandemic-era rules are driving current decisions. As Kareem Daniel, chairman of Disney Media and Entertainment Distribution, said in a statement on Disney's website:
Black Widow’s strong performance this weekend affirms our flexible distribution strategy of making franchise films available in theaters for a true cinematic experience and, as COVID concerns continue globally, providing choice to consumers who prefer to watch at home on Disney+.
Disney is not, however, commenting on how long this strategy will be in place. Revenues at movie theaters have already plummeted due to pandemic restrictions. A hybrid release strategy that embraces streaming and theater openings on the same day has the potential to further hurt those revenues, as highlighted by NATO.
What's the Future of Disney+ Premier Access?
While one can argue that Disney is adapting and trying different methods to bring in more subscriptions through its hybrid release strategy, its approach is not totally justified. It's not just that Disney has made the movie available on its streaming platform, but it's the fact that it made it available through Premier Access at an extra cost.
Related: Is Disney+ Still Good Value for the Money?
Consider Space Jam: A New Legacy, for instance, which Black Widow lost the July 16-18 weekend to, and which came in ahead of expectations with $31.7 million.
WarnerMedia followed a similar strategy by releasing the movie on HBO Max on the same day it premiered in theaters. The difference is that subscribers were able to stream the movie for free. The company intends to continue with this mode of release until the end of 2021.
In addition to this, WarnerMedia is also offering a limited deal, making HBO Max 22% cheaper for people who sign up for six months. The $69.99 price works out to just under $12 a month instead of $15.
If other major movie studios can release blockbuster movies for free on their streaming platforms and give their subscribers more value for their money, it doesn't make sense for Disney to charge an extra fee.
Lack of Streaming Transparency Is Bad For Actors, and For You
Disney's approach to distributing Black Widow and to Johansson's subsequent lawsuit proves that streaming services are being intentional about owning every element of production, including releases.
No one’s sure what success looks like today, as streaming companies aren't transparent with their data, which may result in actors and other parties involved in streaming deals walking into negotiations blind. And ultimately, what’s bad for streaming may affect viewers.
There is a greater need for transparency by not just Disney, but all streamers about performance data of movies and other content types on their platforms. Without it, it’s difficult for actors to advocate for themselves in negotiations in an evolving streaming landscape.
Streaming Companies Need to Keep Adapting and Remain Ethical
Ongoing crises such as the current pandemic call for companies to adapt. As tensions grow between streamers and theaters, with production companies such as Disney trying to figure out how to toe the line, it would benefit them to employ ethical practices going forward.
All players in the entertainment industry are trying to either stay afloat or bounce back from the effects of the pandemic. Instead of being opportunistic, companies should find ways to maintain goodwill both with other industry players and with viewers and subscribers.