‘Mulan’: Making Sense Of The Box Office And VOD Grosses

Walt Disney’s Mulan earned another $10.9 million overseas. That includes a $6.5 million second-weekend gross in China, dropping 72% from its mediocre $23.2 million opening. Big Hollywood movies tend to drop hard in China, partially because the massive marketplace expansion over the last decade has allowed much of the demand to be filled in those first three days.

I’m guessing Disney was hoping for more than $36.2 million in ten days from the very marketplace at which the movie was aimed. Alas, as I feared, a live-action Mulan movie from Walt Disney was just another movie to a Chinese moviegoing populace now almost overflowing with local Chinese would-be blockbusters. As was the case with Crazy Rich Asians, The Farewell and Abominable, to China, Mulan was Tuesday.

We can expect a $45 million finish, right between The Last Jedi ($42 million) and Aladdin ($53 million). As bears repeating, while Disney was hoping for a big score in China, the intent was for the film to succeed in North America and everywhere else to an extent where China was not a do-or-die territory. It was tracking for an $80-$90 million domestic launch in March, which is about what it allegedly earned in its first week of PVOD release (no, not $269 million).

We’ll get back to that in a moment, but Mulan has earned $57 million worldwide in theaters thus far, which under normal circumstances would be a stunning commercial whiff. Considering that America and those territories with functional Disney Plus platforms are getting it at home, that changes the equation. So now let’s dig into those VOD numbers.

These are guestimates from 7Park Data (whose data was used as the basis for Yahoo’s “Mulan made $269 million!” report we saw earlier this week), and we’ll know the exact number presumably in early November during Disney’s next shareholders’ call. But if Mulan really had grossed $269 million in a week in US rentals/leases alone, I’m thinking Walt Disney would have made a point to tell us about it.

Presuming half of Disney Plus subscribers are in America, then we can guestimate that around 3.1 million people leased Mulan in America during the first week of availability, for an opening week of $93 million. Now that’s almost identical to the $95 million 19-day cume for Trolls: World Tour back in April, but Trolls 2 only cost $20 to rent (and cost DreamWorks just $90 million to make) and that film’s PVOD legs stretched out all summer.

I don’t know how much Universal made from that experiment, but it was at the top/near the top of every VOD list over the last five months. Mulan doesn’t seem to have that kind of staying power, currently at 14 on Disney Plus’s trending list (the 1998 animated Mulan is in 17th place). Nonetheless, a $93 million PVOD total would be equivalent to around $186 million in theatrical grosses, since Disney doesn’t split revenue with the theaters. For reference, Oz: The Great and Powerful earned $234 million domestic in 2013 while Maleficent earned $241 million in 2014 and Cinderella earned $201 million in 2015.

While most folks who were going to pay $30 for Mulan between now and December 4 (when the film arrives as a free Disney Plus feature) likely already did so, I was surprised by Trolls 2’s legs so let’s be optimistic. Even a $125 million total in America via Disney Plus would be equal to around $250 million in domestic theatrical grosses, which was a best-case-scenario for the film before it got delayed.

A big question is how well it’s performing outside of North America on Disney Plus. $125 million in America and $125 million outside of America would be the equivalent of $500 million in global theatrical grosses, sans China (which only gives studios 25% of the ticket price anyway). Considering the mixed-positive reviews and poor reception in China, I’m inclined to argue that its theatrical total would have been closer to $550 million worldwide than $850 million worldwide.

I’d argue that anything close to $250 million in global PVOD earnings (with presumably a conventional post-theatrical rental/purchase window still to come) is a decent result. Still, the film cost $200 million, plus marketing, so $250 million on PVOD and maybe $75 million in theatrical earnings doesn’t make it a hit. However, and this is a key point, the choice to push Mulan to PVOD in participating territories instead of theaters was always about trading more money later for less money now.

Even if Mulan does make a ton of money on PVOD, here’s another issue: It’s earning what it’s earning partially because it was a heavily-anticipated theatrical release that ended up skipping theaters during a period when many American theaters are closed and studios are pulling back on big theatrical releases. Mulan is currently a big fish in a near-empty pond, and the notion of it being “worthy” of global theatrical release is part of its allure.

Absent its initial theatrical destination, it may have been no more eagerly anticipated than Disney Plus’ live-action remake of Lady and the Tramp. Would anyone reading this pay $30 to lease Lady and the Tramp? The notion of PVOD replacing theaters as an initial revenue source for big-budget tentpoles ignores the idea that those films are big-ticket items partially because they were supposed to be in theaters in the first place.

Would Scoob! have earned anywhere near what it did as just another straight-to-VOD Scooby-Doo animated feature? Would Trolls: World Tour have earned $95 million in 19 days if it were an intended-for-VOD sequel to the theatrical Trolls movie? If studios could earn blockbuster-sized grosses on PVOD instead of theaters, they would have ditched theaters 15 years ago. There were only two titles in recent times that earned even $400 million in post-theatrical DVD/Blu sales, namely Frozen and Avatar, and both did so only after ridiculously huge and successful ($1.276 billion in 2013 and $2.78 billion in 2009) theatrical runs.

In exchange for less money now, Disney also got to test out a PVOD system within their own platform. They got a likely surge in Disney Plus subscriptions while getting all/most of the revenue (100% if you went straight through Disney Plus and 80% if you went through Google or Fandango or the like) and all of the viewership data to do with as they please.

It was a measured bet, with a (seemingly) measured result. Of course, that’s assuming the numbers are remotely accurate and that Mulan didn’t actually earn $40 million or $240 million in the first week of domestic PVOD release.