How ‘Shang-Chi’ Changes Disney’s Film Distribution Strategy

How ‘Shang-Chi’ Changes Disney’s Film Distribution Strategy
Yinchen Niu/VIP; Shang-Chi, Jasin Boland/Marvel Studios

If there’s a downside to scoring a hit during a pandemic, it’s this for Disney: The success of “Shang-Chi and the Legend of the Ten Rings” opens a fresh set of questions about how to handle the rest of its 2021 theatrical slate.

“Shang-Chi’s” $75 million 3-day haul is the best opening during the pandemic for a film exclusive to theaters and second-best overall after Marvel relative “Black Widow.” This marks an optimistic turn for film exhibition in the U.S., which is contending with the aggressive delta variant.

Disney doesn’t have any more of its own films to gather data on until mid-October, nor do those films match the scale of its next big release that would now seem wise to go theatrical-only, “Eternals.” Likewise, another Marvel movie, “Venom: Let There Be Carnage” won’t be released by Sony until the start of October, making September a dry month for tentpoles.

This means a strategy call for “Eternals” is imminent. If “Shang-Chi” matches the pattern of “Free Guy” and “Candyman” by maintaining sufficient gross in its second weekend, “Eternals” is unlikely to hit Disney+ alongside theaters.

Like “Shang-Chi,” the film is a new entrant in the MCU, but “Eternals” sports an ensemble cast more akin to the “Guardians of the Galaxy” films as well as franchise forefathers “The Avengers,” which could make it even more appealing than “Shang-Chi.”

Plus, hybrid film releasing has encountered a bit of a reckoning, at least on Disney’s end. In addition to the lawsuit filed by “Black Widow” star Scarlett Johansson, which claims Disney violated an agreement for back-end gross by not committing to an exclusive theatrical release, such day-and-date releases have been a boon for global piracy.

Low turnout in China for day-and-date Disney+ releases “Raya” and “Cruella,” as well as the recent low opening for “Luca,” which skipped theaters altogether in the U.S., can’t be ignored given China’s prominence in the global film market. “Black Widow” and “Jungle Cruise” haven’t released there at all.

Unlike “Eternals,” Disney is far more likely to shift animated film “Encanto,” a new IP, to Disney+.

The delay of “Top Gun: Maverick” from November to 2022 may have removed one film from the competition heading into Thanksgiving, but “Ghostbusters: Afterlife” moving ahead to that film’s November 19th slot means “Encanto” will go up against an existing franchise. Better to utilize the streaming option so families can have an option at home during the holiday.

Still, Disney may want to wait and see how animated film “Ron’s Gone Wrong” does before making a final decision on “Encanto.” Per 20 Century’s soon-to-expire output deal with HBO, its theatrical films must only release in theaters.

As for December, Disney may need to push one film back.

Steven Spielberg’s “West Side Story” will get a head start ahead of a pileup of films closer to Christmas that includes “Spider-Man: Far From Home” (Dec. 17), “The Matrix Resurrections” (Dec. 22), “Sing 2” (Dec. 22) and Disney’s last release of the year, “The King’s Man” (Dec. 22).

Previously set for late August, the latter film is an R-rated prequel to two prior “Kingsman” films and is better suited for the Q1 months than the December holiday, especially with the “Matrix” franchise making its return, albeit in a hybrid fashion per Warner Bros.’ 2021 slate strategy.

Given how poorly “The Suicide Squad” fared for the DC brand in August, Disney’s case-by-case approach to day-and-date releases appears to have been the right call for the studio versus Warners’ one-size-fits-all strategy, as “Shang-Chi” has now proven.