The Mulan experiment

Over the past 48 hours, a question has swept through social media as swift as a coursing river: Would you pay $30 to see Mulan?

It turned out to be as divisive a topic as how dogs wear pants. Fans fractured into groups that thought the price tag was "worth it," and those who called the fee a "rip off" or a "scam." "For 30 bucks, you should be in it," quipped the Today show's Savannah Guthrie.

But Disney's decision to release its long-delayed live action remake of Mulan in September for a fee of $29.99 isn't just a contingency plan necessitated by the pandemic. The price tag represents years of research by film studios into what fans would be willing to pay to see theatrical releases early, at home — something that admittedly sounds a little less enticing when you have been trapped in your living room for the past six months. Still, the coronavirus outbreak has only expedited the exploration of distribution options outside of traditional theatrical releases, and for all the sticker shock fans are now experiencing (that's six venti caramel frappuccinos!), this was a long time coming.

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Originally scheduled for the doomed premiere date of March 27, Mulan was initially bumped to a July 24 release by Disney, and when that became infeasible, an August 21 release, before being postponed indefinitely last month. Disney's hand-wringing was understandable; Mulan cost $200 million to make, Variety writes, with the hopes of recouping the cost partly hanging on it being a Chinese box office success. Even so, the movie had been eyeing a "huge [domestic] $85 million-plus opening weekend" when the trade reported on it in early March. To meet that expectation now, Disney would need to find 2.83 million people to pony up $30 to watch the movie at home; while exact domestic subscriber numbers are hard to come by, a conservative and rough estimate based on 28.6 million U.S. Disney+ subscribers would mean that somewhere in the ballpark of 10 percent of those subscribers would have to rent Mulan. (The movie will only be available to Disney+ subscribers, adding to the ire of fans who see a $30 fee on top of a subscription price they're already paying as opportunistic gouging).

Disney, for its part, has been dismissive of its new Mulan plan having any larger implications for the industry, or signaling a change to Disney's approach to theatrical releases. "We thought it was important to find alternative ways to bring this exceptional family friendly film to them in a timely manner," Disney CEO Bob Chapek explained on the company's quarterly earnings call, adding that he sees the strategy as a "one off" — though he also admitted "we find it very interesting to be able to take a new offering … to consumers at that $29.99 price and learn from it and see what happens." As CNN's Frank Pallotta translates, "consider Mulan an experiment for now, but I'm dubious that Disney created a PVOD [premium video on demand] system from scratch for just one movie."

The attraction of the PVOD model has been clear for years: "A studio typically pockets slightly more than half of box office revenue, with 40 percent to 50 percent staying with the cinemas," The Hollywood Reporter explains. "With PVOD, the studio typically takes the lion's share of an 80/20 split with an online platform." In an ultimately unsuccessful push in 2017, Universal Pictures and Warner Bros. were even in talks with Comcast and Apple to offer premium movies for $30 to $50 each (making Mulan look cheap now; and there wasn't even a global health crisis keeping us all indoors then!). Disney, at the time, was resistant: "While premium VOD is probably a strategy that does work for other studios, given their films and genres, for the kinds of films that we do … we're not engaged in conversations on premium VOD," Disney's CFO Christine McCarty said at the time. But that was before the company had Disney+ to roll out movies on. With the streamer, they don't even have to share a cut with an online host like iTunes or Amazon.

And now, of course, the floodgates have opened. PVOD, while not yet proven against traditional theatrical releases, is looking pretty promising. Warner Bros.'s Scoob! topped all three VOD charts when it came out in May; Trolls World Tour, which likewise rented for $19.99, "made more money in three weeks on demand than Trolls did in five months in theaters," CNBC reported. As NBCUniversal CEO Jeff Shell confirmed to The Wall Street Journal, "the results for Trolls World Tour have ... demonstrated the viability of PVOD." Then in July, Universal and AMC Theaters further quickened the pace of the transition by agreeing to a seismic deal that shortened the theatrical exhibition window from three months to three weeks, meaning the studio could shuttle its movies to premium on demand faster. Now Disney, the last bastion against PVOD, seems to have caved too with Mulan.

Still, $30? But as Mulan's price tag defenders have pointed out, split among a family, the cost is actually cheaper than going to the multiplex, especially when you factor in additional costs like parking or concessions. While it might make less sense for the solo adult who wants to watch Mulan on their own, the "rental" includes permanent access to the movie so long as you're a Disney+ subscriber; in that respect, it costs about as much as a new blu-ray. Research also seems to indicate that while consumers might hem and haw, they'll still ultimately pay the $30; a recent survey by Hub Entertainment Research found that 63 percent of the largest movie-going demographic, 18-34 year-olds, would pay to watch a movie just released in a theater at home, while an overwhelming majority, 57 percent, said they'd fork over $50 to do it.

This is an industry shift to be wary — and perhaps even heavily critical — of. Already in dire straits, movie theaters would be crushed by such a transition. Mulan going to PVOD is "a f--k you to exhibitors," one U.K.-based theater operator told Deadline, although the format hasn't had the same success abroad as it has in the U.S. — an argument, perhaps, for why this might not be an immediate transition.

Indeed, there are those that argue studios' PVOD experiment is temporary, a way of trying to stay afloat during the pandemic. Going to a theater is an experience that movie lovers miss, the thinking goes, and nobody really prefers watching an epic blockbuster like Avengers on their dusty home TV, with a nonexistent sound system. As a lover and defender of the theatrical experience, I certainly hope this is true.

But while we're all nostalgic for uncomfortable theater chairs right now, once a vaccine is developed and life in America goes back to some sort of normal, the novelty of sticky floors, distracting cell phone lights, 30-minute trailer reels, and over-salted popcorn will wear off. We'll turn to each other and say: Remember when we used to be able to do this at home?