In Laman's Terms: Why Can't Disney Send Fox Movies Directly To Streaming?

In Laman's Terms is a weekly editorial column where Douglas Laman rambles on about certain topics or ideas that have been on his mind lately. Sometimes he's got serious subjects to discuss, other times he's just got some silly stuff to shoot the breeze about. Either way, you know he's gonna talk about something In Laman's Terms!

Everything's going to streaming. Like wannabe millionaires trekking across America for the Western gold rush, movie studios, still stuck with no operational movie theaters, are sending their movies to streaming services in lieu of traditional theatrical releases. There be gold in them Hulu hills! 

With My Spy sneaking its way Amazon Prime, Military Wives shipping off to Hulu, The Lovebirds taking flight on Netflix and An American Pickle taking a chomp out of HBO MAX, it's becoming common for delayed movies to just go with a streaming bow instead of waiting around for theaters to open up. After all, people need brand-new entertainment to consume as they stay stuck in their homes, a new Seth Rogen comedy could hit just the spot. Plus, the movies heading off to streaming tend to be mid-budget movies that don't require a $1+ billion box office haul to be profitable. 

One studio that would seem to be primed to revel in this trend would be Disney. After all, they had a huge stockpile of delayed movies from their newly-acquired 20th Century Studios and Searchlight Studios divisions even before the COVID-19 epidemic closed down theaters. The Empty Man, for example, is a James Badge Dale/Stephen Root thriller that started filming in August 2017 and had been lying on a shelf for nearly two years before Disney gave it a release date last Fall. With a number of movies like The Empty Man just gathering dust on a shelf, why not drop them on a streaming service? Perhaps even Hulu, the streaming platform Disney now primarily controls?

That seemingly natural bit of corporate synergy is basically impossible thanks to a foe more insurmountable than any Marvel Studios baddie: contracts. 20th Century Studios and Searchlight Pictures both have long-term pay-TV deeals for their theatrical releases with HBO. This means HBO has exclusive rights to air and stream their movies six to eight months after they debut theatrically. These deals were last renewed back in August 2012 but they don't expire until 2022. Both movie studios may have changed names and owners, but those pay-TV contracts still stand.

If Disney wants to send a 20th Century Studios film to a streaming service, that's totally within their right. But something like The Woman in the Window wouldn't land on Disney+ or Hulu. It would go to HBO and, in the near future, HBO MAX. Considering that HBO MAX is a direct competitor to Disney+, that makes the streaming debut maneuver an unlikely one for Disney-owned title. After all, the Mouse House would rather not line up a rival with high-profile movies. This is a unique phenomenon that not every studio has to grapple with. However, it's one Disney has actually experienced before when integrating other new studios into the company.

For example, Disney bought theatrical distribution rights to The Avengers and Iron Man 3 from Paramount Pictures, however, the two films premiered on EPIX as part of Paramount's pay-TV deal with EPIX.   Similarly, DreamWorks titles distributed by Disney (like The Help or Lincoln) went to Showtime rather than Starz, the channel Disney had a pay-TV deal with at the time. Disney can work a lot of magic but even it can't wriggle out of long-standing pay-TV contracts, especially when channels like EPIX and Showtime would very much like to have Marvel and Spielberg movies to boost up their profile.

While the situation isn't an unfamiliar one for Disney, the way it's manifested with the various Fox movies is a frustrating one for Disney brass given that both Fox studios produce far more movies annually than either DreamWorks under its Disney tenure or just two Marvel Studios projects. To boot, under the current circumstances that are keeping everyone confined to their homes, Disney would doubtlessly love to flood Hulu with high-profile Fox titles previously scheduled for theatrical release. For now, though, the likes of New Mutants are sticking around in theatrical spaces. The fact that such movies aren't getting a detour into streaming has less to do with "preserving" the theatrical movie landscape and more of Disney being cornered in by long-standing pay-TV deals.