Why Hollywood’s 2 biggest releases flopped financially, and how that’s affecting fall releases

Many theaters across the United States are still closed or operating at reduced capacities. The film industry is still figuring out how to reconnect with audiences. The two biggest releases of the summer — Christopher Nolan’s “Tenet” and Disney’s “Mulan” live-action remake — had disappointing openings. That’s despite having very different release strategies. Now the release of “Wonder Woman 1984” is pushed. 

KCRW talks about all this with Matt Belloni, KCRW Contributor and former editorial director at The Hollywood Reporter. 

KCRW: ‘Mulan’ was released on Disney+. Do you know how well it did with audiences? Were people willing to shell out the extra $29.99 to watch it? 

Matt Belloni: “That is a very well guarded secret because Disney has not released numbers. It was a very unique release strategy because it wasn't available on Disney+, their streaming service, for regular customers. You had to be a Disney+ subscriber. And then on top of that, you had to pay $30 to get access to ‘Mulan.’ So that's a pretty high bar. 

And some of the analysts have speculated that because it was fluctuating among the top 10, it wasn't by far the number one release last weekend, according to the Disney metric on Disney+, that maybe it didn't do well. But we don't know because they haven't released … the numbers. 

What we do know is that this film was supposed to be a big hit in China. And part of the rationale for spending as much money as they did on this movie, over $200 million, was because the China market was supposed to be very robust. It opened there, and it did not do very well. It opened on the low end of expectations, around 20-something million, and there's a lot of reasons for that. 

People have speculated that there was controversy surrounding the film. Disney publicly thanked a very controversial regional government that has been responsible for imprisoning people. And there was a lot of backlash to some of the ways that the film portrayed the characters in the market.

One theory for why “Mulan” failed in China. “Mulan” is a 1000-year-old story and a revered character in China’s heritage, and to have Westerners make a film about the country’s national hero, they were bound to get things wrong. 

“That's true, although I would say that Disney took some pretty extraordinary steps to try to be culturally specific. In fact, part of the reason they had a problem was most of the movie was shot in New Zealand, but they went to China to shoot some specific scenes because they wanted an air of authenticity. 

They cast some pretty prominent Chinese actors in the film. They really went over and above themselves to try to be culturally authentic to that market. And it just did not go over well, partly because of this controversy about where they shot in China. They shot in a province that the Chinese government has used to incarcerate an ethnic minority.”

What does it mean if a movie doesn't click in China for Hollywood these days?

“It’s a big deal because depending on the film, you can get … up to $300 million out of that market. Now it's a little bit more complicated because you have to partner essentially with the business in China, and you get less money back from China than you would from some other markets, especially from theaters in the U.S. But China is considered a crucial market for some of these big tentpole Hollywood blockbusters. And Disney has done very well in China with other films.”

“Tenant” is apparently doing okay overseas. But in the U.S., it opened only in movie theaters —  not in New York or Los Angeles, the two biggest markets in the country. How badly did it do in attracting people to theaters? 

“It did not do great. And let's explain some of the numbers because there's been a lot of spinning going on by Warner Bros. here. And Warner essentially had a gun to their head by Christopher Nolan, who insisted on a theatrical release for this film. … About 70% of theaters in America are open, and somebody had to go first to see if people would be comfortable going back to theaters. 

So Warner's put ‘Tenet’ out, and opening weekend … it did about $9.4 million. Less than $10 million. Typically a Chris Nolan film would open to about $50 million. And they did some games with Canada releases and some of the cumulative numbers to get that a little higher. But overall, after two weeks, it's still in the $20 million, high 20s. Not good. 

And this was really an experiment for them and it failed. So what they're doing is they're now pulling back on other movies that were scheduled to open like “Wonder Woman [1984].” 

Other studios are now looking at their own slates and figuring out what the best strategy is for the rest of the year. But there's a real good chance that the next eight to 10 weeks, we could see no new releases on a massive scale from the studios.”

Why don't they release new films on video on demand? 

“These big blockbusters … the economics only makes sense if you can get to a high $600-700 million range of grosses worldwide. And that's not the same kind of economics that you get out of streaming. 

Now some would say that these studios should put these movies on demand … to try to get more people to subscribe to some of their services. And I agree that a lot of people probably would have subscribed to the Warner streaming service HBO Max if Tennant was only available there. But that's a big hit to take financially, to put a $200 million movie in an online environment where you don't know what you're going to make back.”

Does this mean studios will now make movies that are cheaper or aren’t blockbusters?

“That's a way to extrapolate what's going on now. I think most people assume that there will be a vaccine at some point and the appetite for movie-going will come back in some capacity. I don't think we know exactly how big that appetite will be and how much these shifts to streaming and home movie-viewing … are going to be permanent. 

… This is going to put into motion something that was already occurring, which is the shift away from theaters and into home viewing. And we're going to see fewer movies in theaters. The bigger blockbusters, yes. But the mid budget and lower budget stuff is going to continue to migrate to streaming for the foreseeable future.”

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