Disney’s Restructuring

Last week Disney announced a huge restructure with its Content creation and distribution being separated. Content creation will now focus on creating big franchise content for theatrical and streaming distribution, as well as general entertainment and sports content for Disney’s streaming platforms and TV networks. Meanwhile the “Media and Entertainment Distribution group” will handle monetisation and distribution of all the company’s projects. And with Disney reporting over 60 million Disney+ subscribers worldwide their efforts have shifted towards creating content for and distributing content on their streaming platforms.

How Will This Affect Cinemas?

Disney movies attract incredibly large cinema audiences. And with Cineworld’s recent closure due to the lack of big releases needed to sustain themselves during the pandemic, this move could be rather damaging. Especially since studios like WarnerMedia and Comcast are seemingly following Disney’s lead. Recently they reorganised to focus on streaming service’s HBO Max and Peacock.

However, despite Disney shifting focus to streaming, analyst Rich Greenfield said, “nothing can achieve the per picture economics that Disney…generate through a global theatrical release”. Showing that Disney still needs cinema distribution to ensure their projects make their money back. This move may be meant to recoup losses further down the line. With projects aimed at attracting new customers to Disney’s subscription services and keeping people subscribed; paying for content, as they proved they could do with Mulan (2020). And as Disney has access to a huge amount of resources, and bankable studios, it’s hard to see this becoming an industry trend. Not every studio has the resources needed to shift towards streaming over cinema. Cinemas still matter but can they remain open without the support of many big tentpole releases?

How Can Cinemas Survive?

There are no concrete answers, but cinemas currently have a lot of avenues available. For example, the largest audience for UK cinema releases is consistently 15-24-year-olds. Other statistics show that BAME and LGBTQ filmgoers, as well as adults with children under 18, make up a high percentage of cinema audiences. Cinemas could target these audiences by providing discounts or exclusive screenings to encourage certain demographics to keep returning (similar to how The Light and Odeon cinemas currently offer discounts for former Cineworld customers). Rewards can also be offered to make customers feel valued. And classic and recent content could be offered to draw in BAME and LGBTQ audiences.

Also, recently smaller movies like After we collided and Unhinged have done relatively well at the UK box office. Showing that smaller films can do well with a bigger platform. And with many smaller releases still on the horizon, cinemas have an opportunity to encourage audiences to try something new. They can do this by increasing social media awareness. Offering discounts/rewards. Or perhaps even organising local cinema clubs, as many of the previously mentioned groups are more likely to respond to the idea of a film club. Plus the localised nature of film clubs could be a great comfort to regions in higher lockdown tiers.

Of course, if cases spike cinemas will have to close. But other options are available. For example, during the lockdown, Sheffield’s Showroom Cinema partnered with various streaming and VoD sites. Offering free trials for their members, and virtual screenings that split the money evenly with the Showroom if you used their site. These options allowed people to watch films safely from home. And helped keep the Showroom on its feet.

Conclusion

Despite Disney’s shift to focus more on streaming, many studios don’t have Disney’s money and resources. So it’s hard to see this becoming an industry trend. Cinema distribution will still be needed to cover big-budget production costs.

But cinemas must adapt to survive without huge tentpole releases. There are many independent productions out there to entice audiences. And offers and rewards, targeted marketing, film clubs, virtual screenings; profit-sharing with VoD, and streaming services are certainly options that can help cinemas to make money. But will they succeed? Only time will tell.

Also Read: What’s Next For Disney?

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