The Large Cinemas Turn against Disney

Disney’s policy of simultaneously releasing movies on the big screen and on its streaming platform has incited the wrath of Spain’s largest cinemas, which refuse to show the studio’s films.

On March 5, “Raya and the Last Dragon” arrived in Spanish cinemas. Disney’s new animated film was shown in 120 movie theaters that projected it onto 152 screens. It was a small release in comparison to pre-pandemic times. Still, it was a financial success for its first weekend, earning 257,000 euros with an average of 1,695 euros per screen. Interestingly, “Little Things,” the new thriller starring Denzel Washington and distributed by Warner, which, during the same time, was in its second weekend in Spanish cinemas, could be found in more theaters — 136, even though its audience is theoretically smaller, since it’s not a family film.

What do these figures tell us? The big Spanish cinema chains are at war with Disney. Cinesa, Kinépolis, mk2, Yelmo, and Ocine did not show “Raya and the Last Dragon” in their theaters and they have rejected (except Yelmo and Ocine) the Oscar favorite, Chloé Zhao’s “Nomadland,” which arrived in late March. According to the cinemas’ managers, they are fighting to survive, to avoid becoming “collateral damage in the platform wars,” as mk2 General Director Álvaro Postigo explained.

Disney announced its upcoming worldwide releases on March 24. “Cruella,” starring Emma Stone, will arrive simultaneously on Disney+ Premium and in theaters on May 28, as will “Raya and the Last Dragon” and Marvel’s “Black Widow,” starring Scarlett Johansson. “Luca,” Pixar’s new film, will come out only on Disney+ on June 18. This was the tip of the iceberg, according to various Spanish cinemas—and just when the theaters are getting closer to reopening at full capacity. At the end of March, 80% of Spain’s cinemas associated with the Spanish Cinema Federation, which comprises 80% of the market, are now functioning fully again.

According to figures from April 2019, in Spain there were 3,593 screens belonging to 500 movie theaters. Spain’s theaters have felt abandoned, with some exceptions, by the major production companies — the big Hollywood studios. Only the independent distributors have continued to release films as before. “I believe that Spain is the laboratory where the big studios are experimenting,” stated Postigo, who directs the subsidiary of the French giant, which manages 125 screens in 10 complexes in Spain, “because in the rest of Europe, theaters are just opening now, or they will remain closed until after summer. This is war and there are some things that simply cannot be tolerated.”

Against the Cinematic Giant

Fighting Disney is not easy. Seven box office top sellers in 2019 were Disney productions. In the same year, out of the 600 million euros that Spanish cinemas earned, 35% was thanks to Disney: over 200 million euros from films made by Pixar, Marvel Studios, Lucasfilm and Fox, this last company the most recent of Disney’s acquisitions, bought in 2019.

“Nomadland” is a Disney product thanks to the acquisition: the film was made by Searchlight Pictures, which was Fox’s branch for independent cinema. This explains why “Nomadland” is so different from the majority of Disney’s offerings. Disney declined an interview from our newspaper, as did FECE, in the case of the latter because they do not yet have a common policy among member cinemas.

Some negotiations between the major production companies and cinematic chains occur at a worldwide level, but the most important points are hashed out by territory (in the world of cinema, there are territories, not countries. Territories tend to be groupings of countries). This happens for various reasons: Each country has a specific method of paying out benefits from each ticket sold, and in each country, the “release window” — the time that films are in cinemas but not available elsewhere — is different. In Spain, before the pandemic, the window was 112 days. Distribution of earnings depends on each distributor, movie theater, film and days that the film will be on the marquee. In general, the major production companies earn from 35% to 55% of the price of each ticket. There has always been tension regarding these negotiations; neither Martin Scorsese’s “The Wolf of Wall Street” nor David Trueba’s “Living Is Easy with Eyes Closed,” both produced by Universal, were shown in the Cinesa cinema chain.

“Nomadland” arrived on 263 screens in Spain because it was released on the day that many cinemas reopened, and because Ocine and Yelmo agreed to show it. A spokesperson from the communication agency for this cinematic company, which has 500 screens in 50 movie theaters, noted, “We continue to work with various distributors to offer the best films, and as yet we cannot make any statement about Disney.” Cinesa, with 500 screens and 44 movie theaters before the pandemic, made a similar statement, “The details of our conversations with partners are confidential. In the case of ‘Raya’ and ‘Nomadland,’ we have not been able to come to an agreement. The situation of these two films is unique.”

Agustín Llorente, Director of Sales and Marketing for Kinépolis Spain, the third largest cinema group in the country with 8 theaters and 137 screens, wrote by email, “We believe in the release window as a proven and successful method that is useful for everyone in the industry. Given the uniqueness of the current situation, Kinépolis is open to studying new, more flexible ideas. In this new reality, distributors’ advertising budgets for promoting movies are being reduced substantially, and the exclusivity of the release windows are being shortened or eliminated. We are open to studying modifications to the status quo, but we ask in exchange fair and balanced remuneration. Also, the simultaneous releases on streaming platforms are causing a skyrocket in piracy, which compromises the viability of the business for the entire industry.”

Postigo analyzes the problems. “Of course we have to reduce the length of release windows, but not eliminate them. We must quickly create a board of cinemas under government auspices, because the current 112-day release windows are not a legal protection; rather, they come from a tacit agreement. We need political consensus.” This week, Warner announced an agreement for 2022 with Cineworld, the second largest theater company in the world. The agreement includes maintaining a release window of 45 days in the United States (Regal Cinemas), and 31 days in the United Kingdom. “In Spain, Warner has also made an effort to help by offering new films to release,” says Postigo. He adds, “One of the big lies nowadays is that streaming platforms are democratizing access to movies. No, you only have access if you are a member.” Finally, he warns us about the future, “This flight of the major production companies from the cinemas has been born out of the war between streaming platforms. When the bubble bursts and only three or four survive, they will have killed the movie theaters, which will be the collateral damage of their conflict.”