Disney CEO Bob Chapek recently described the upcoming theatrical release of Shang-Chi and the Legend of the Ten Rings as an “interesting experiment.”
Chapek’s comments came as he participated in a Q&A session following The Walt Disney Company’s Q3 FY21 Earnings Results Webcast.
As transcribed by The Motley Fool, Chapek was asked by MoffetNathanson analyst Michael Nathanson, “I wanted to understand how the company is thinking about near-term theatrical releases given the steep fall off in second week box, rise of the Delta variant, international markets still unopened. So why not delay or pause release schedule?”
Chapek responded to this first question, “Michael, as you probably recognize we live in a very uncertain world in terms of the recovery of some of our markets in the theatrical exhibition world is certainly part of that. We’ve said from the very beginning that we value flexibility in being able to make as last-minute calls as we can given what we see in the marketplace.”
He continued, “And certainly, when we planned our schedule that we’re executing right now, we did not anticipate nor did I think anybody the resurgence of COVID with the Delta variant that would have such a significant impact on the marketplace. At the same time, when you work in an ecosystem, having a lot of partners, they need to be able to plan their business, too.”
Chapek then asserted, “And so at some point, we have to put a stake in the ground and say, for example, Shang-Chi, that’s going to be a title that we’re going to put in the marketplace or Free Guy. That’s going to be a title that we’re going to put into the marketplace.”
“Not knowing, again, three months earlier when you make that commitment, what exactly the marketplace is going to look like. But what I do think that says, Michael, it says that we value flexibility and we value to follow where the consumer is going to go,” he reiterated.
Chapek then stated, “And while some of that’s uncertain, I think in terms of relative to where the rest of the market is, you see that we’ve got more flexibility in terms of how we program. And nothing is in stone because the marketplace is rapidly changing.”
He concluded, “But at some point, you’ve got to put a stake in the ground and say, this is what we’re going to do and that’s where we ended up on Shang-Chi and Free Guy, which are our next two titles out.”
Nathanson would then follow-up asking, “Why wouldn’t you just add from your access given what you saw happen, I think, successfully with Black Widow to those two titles?”
Chapek answered, “OK. Good question. On Free Guy, obviously, this is a title that we acquired under a different distribution assumption and set of agreements. So we don’t have the degree of freedom to do that on Free Guy.”
Switching his attention to Shang-Chi he explained, “On Shang-Chi, we think it’s actually going to be an interesting experiment for us because it’s got only a 45-day window for us. So the prospect of being able to take a Marvel title to service after going theatrical with 45 days will be yet another data point to inform our actions going forward on our titles.”
“But once again, I’ll refer back to my previous answer. When we plan Shang-Chi that title was planned on being in a much more healthy theatrical environment,” he said.
“And at this point, unfortunately, due to distribution agreements that we have and due to just the practicalities of last-minute changes, it wouldn’t be possible,” Chapek concluded.
Chapek’s comments come after Marvel Studios’ Black Widow only earned $80 million it’s opening weekend and his since only $175.7 million at the domestic box office. It has earned $352.2 million globally. It is currently the second worst performing Marvel Cinematic Universe film with only The Incredible Hulk performing worst. On top of that the film had a production budget of $200 million.
Following this failure, Disney announced at the end of July, with the movie being in theaters less than a month that it would be released on Digital on August 10th and on 4k Ultra HD, Blu-ray, and DVD on September 14th.
Not only has Black Widow been a disappointment at the box office, but Disney’s Jungle Cruise starring Dwayne “The Rock” Johnson and Emily Blunt has also performed poorly. The movie had an opening weekend of $35 million. It’s gone on to earn only $128 million at the global box office.
According to reports, Jungle Cruise cost over $362 million to make and would need $500 million to just break even.
And it’s not looking good for Ryan Reynolds and Jodie Comer’s Free Guy film from 20th Century Studios, now owned by Disney. Box Office Pro predicts the film will only earn $20 million in its opening weekend.
One thing is for sure, the box office returns for Shang-Chi will indeed be interesting. If Black Widow, a character who played a significant role in the Marvel Cinematic Universe struggled to get people into theaters, it’s going to be a lot harder for a relative unknown like Shang-Chi to do so.
What do you make of Chapek’s comments regarding Shang-Chi and the Legend of the Ten Rings?