Walt Disney will sell Mulan online for $30 in September, dealing a blow to cinemas that were counting on the blockbuster film to lure people back to the movies.
The move comes as Disney and the other big Hollywood studios have been forced to repeatedly postpone their films as the coronavirus pandemic drags on in the US, leaving cinemas largely shut in the world’s biggest movie market.
Disney last month said it would postpone Mulan’s August 21 theatrical debut without giving a new date, fuelling speculation that the company would release it online instead.
Mulan will be available to buy on Disney+ on September 4 in the US, Canada and western Europe. Bob Chapek, Disney chief executive, described the decision to offer the movie online as a “one-off” rather than a change in strategy.
The media giant revealed its plans as it reported a $3.5bn hit to operating income at its theme parks, as the pandemic ground some of its most lucrative businesses to a halt.
Disney’s quarterly numbers were expected to be ugly, during three months in which Covid-19 bruised almost all of its businesses apart from video streaming. It has been hit particularly hard by the pandemic, because it has depended on its theme parks and blockbuster movies to deliver profits even as traditional media has declined.
Total revenues in the June quarter dropped 42 per cent year-over-year to $11.8bn, while adjusted earnings plunged 94 per cent year-over-year to 8 cents a share. Analysts were looking for sales of $12.4bn and an adjusted loss of 63 cents a share.
The results were weighed down by Disney’s theme parks, where gates around the world were mostly shut. The parks unit posted a $2bn operating loss, while revenues dropped 85 per cent year-over-year to $983m in the quarter.
During a call with investors, Mr Chapek looked to reassure that Disney would weather the “devastating” pandemic. He pointed to the one bright spot for the company, its streaming service Disney+, which has benefited from the stay at home era.
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The flagship video streaming service has reached 60.5m subscribers, Mr Chapek said, only nine months after launching.
“Despite the ongoing challenges of the pandemic, we’ve continued to build on the incredible success of Disney+,” said Mr Chapek, the former theme parks boss who was promoted to chief executive in February.
While the streaming business is growing fast, it is lossmaking. Disney’s direct-to-consumer business unit posted an operating loss of $706m in the quarter on $4bn in revenues.
Shares in Disney were up 5 per cent in after-hours trade, after Mr Chapek announced the Mulan news. Shares in cinema operators fell, including a 4 per cent decline for Cinemark and a 1.5 per cent drop for AMC.
Even as the pandemic continues in the US, Disney’s stock has held up well. Shares in the company have climbed more than 10 per cent in the past three months.