The Mandalorian Merchandise Sales Confirmed Disney Can Build Franchises Outside Theaters

The massive success of the Star Wars spinoff series The Mandalorian -- not just as a show, but as a merchandising juggernaut -- has helped embolden Disney's post-pandemic business model, giving CEO Bob Chapek the confidence that movies best-suited to a Disney+ release can still be crossover successes without a mainstream theatrical release. To what extent that translates to other properties -- after all, how many shows have a Baby Yoda to fall back on? -- is anybody's guess, but according to Chapek, Disney's position is that it can be done, if they execute correctly, and the success of The Mandalorian all over the marketplace is proof.

Disney's premiere access program, through which fans can pay $30 for a rental fee, and the movie will remain in their Disney+ account until they either leave Disney+, or the movie comes to Disney+ on its own, rendering the rental moot, is the focus. A shareholder asked Chapek how they are determining which movies get a theatrical-only release, which ones get theaters plus premier access, and which are premiere access-only.

"Ninety percent, let's say, of the domestic marketplace is open right now," Chapek said of theatrical exhibitors. "And we're encouraged in terms of polling going forward, but if you look at last weekend's box office for an example, and compare last three years of pre-COVID box office, it was 85% low domestically and 67% below internationally. So we know the market is not quite there yet. So the Disney premiere access strategy, one of the things it gives us right now -- and we're grateful for this -- is the ability to go ahead and try to release things into the market, and try to reprime the pump, if you will, but at the same time know that for those consumers that are a little leery still about going into a packed theater, that they can go ahead and watch it in the safety and convenience of their home. In terms of going beyond this fiscal year, we've not announced exactly what our strategy is going to be in terms of which titles will be theatrical plus Disney premiere access, which ones will be direct to Disney+, or which ones will go into theaters, but know that we'll continue to watch the evolution of the recovery of the theatrical marketplace, and we'll use that flexibility to make the right call at the right time."

Chapek added, "But right now we've only called those films in this fiscal year because of the relatively fluid nature of the recovery of exhibition."

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