Disney Sets Up Streaming’s Biggest Test Yet

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Disney has set up what may be the ultimate test of streaming at home versus going to the theater.

Earlier this week, the entertainment titan announced a surprise shift in its plans for “Black Widow.” The much-anticipated next chapter in its Marvel Cinematic Universe was set to release in theaters on May 7—one year after its originally planned date that was stymied by the global pandemic. But Disney pushed the debut back by two months to July 9, and threw in a plot twist: “Black Widow” will also become available on its Disney+ streaming service the same day under its Premiere Access plan that charges subscribers an additional $30 to watch the movie.

Disney has yet to publicly explain its reasoning, but the step was likely driven in part by concern about the state of the movie-theater market come May. A little over half the North American theater base had reopened by mid-March, according to Comscore data, and that number will grow notably higher as Cineworld Group begins reopening its Regal chain on April 2. But even reopened theaters still mostly operate at sharply reduced capacities. Analyst Michael Pachter of Wedbush thinks capacity restrictions are unlikely to fully lift before the fourth quarter of this year.

The movie slate will be crowded by then. Comscore counts 24 major movies slated for “wide” release in the 14-week quarter, including some blockbusters delayed from last year such as the James Bond vehicle “No Time to Die.” Hence, Disney’s new plan for “Black Widow” looks like a way to maximize the return for a $200 million movie that won’t be able to fill as many seats as its superhero movies typically do. It might also help boost Disney+ subscribers—a major priority for the company and a data point investors have watched closely.

Still, the move complicates an already complicated recovery story for the movie-exhibition industry. “Black Widow” was expected to serve as the main launching point for the summer movie season. AMC Entertainment , Cinemark Holdings and Cineworld have seen their share prices slide an average of 11% since Disney’s “Black Widow” shift.

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