With the picture remaining bleak for theaters for the remainder of 2020, and no sign of early 2021 looking any better, pressure is mounting on studios. Hundreds of millions of dollars of product is sitting on shelves while many of them have a route to market in the form of a streaming platform.

One such finished product is Black Widow for Marvel Studios at Disney. Black Widow has been pushed back twice to May 2021. This is a full year after it’s original release date.

Theater owners looked on nervously as Disney pushed Artemis Fowl and Mulan direct to Disney+. Universal had done the same with The Hunt, The Invisible Man, Bloodshot and Trolls World Tour. For a while it looked as if the line would hold and releases would be kept back for theaters.

However now a major Disney investor has questioned this, openly, in a letter in Variety to CEO Bob Chapek. Dan Loeb says waiting for theaters to open is a mistake with all the product they have, and with their own highly successful streamer:

“Given the relationship that Disney has with the entertainment consuming public thanks to franchises like Marvel and Star Wars and Pixar, they can leverage all of those to increase their subscriber base.

What Netflix has is this immense subscriber base that allows it to invest in an enormous amount of content and amortize that to get more subscribers. Disney isn’t there yet, but they need to get there as quickly as possible. If they don’t get critical mass in their subscriber base, they will be permanently disadvantaged versus Netflix.

My understanding is that the old-line executives don’t want to go over the top with their big tentpole movies, which is why they announced they were pushing Black Widow and other movies to 2021. I don’t think they appreciate the tiger they have by the tail, which is to say the value they can drive by moving into a subscription model, which has been adopted by everyone from Microsoft to Amazon. It’s so value accretive.”

Loeb speaks sense from a business point of view, and it sounds like the creatives are clinging on to this cinematic experience. The amortization argument is interesting and fairly persuasive. From an accounting point of view it makes a lot of sense.

He went on to say that post COVID-19 the theater experience will be:

“…much more of a novelty experience in order to really distribute things…”

He went on to compare it to Yahoo email accounts and hard copies of the Yellow Pages. Something people still have or do, but they aren’t the critical mass anymore. I still have my Yahoo e-mail account from 1995.