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Meena Alnajar is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School

Turning Red, a Pixar animated movie set in Toronto and directed by Canadian filmmaker Domee Shi, was initially set to be released in theatres on March 11, 2022. However, due to the surge of COVID-19 cases, Disney has moved the film’s release online to their streaming service Disney+. Streaming services have provided a platform for safely watching films from the comfort of your own home. Yet financially, films released via streaming sites can generate starkly different revenues than releases in theatres. In July 2021, Disney encountered legal issues when Marvel moved the Black Widow film release to Disney+. The leading actress, Scarlett Johansson, felt that her contract did not stipulate the film’s streaming site release. Her legal team claimed that this release changed the actress’ compensation. However, with the rise in streaming and general reluctance to go to in-person theatres, are streaming services the best profit mechanism for filmmakers? What could be lost when films are released on home screens?

Is the theatre dead?

In Canada, movie theatre chain Cineplex has suffered extreme losses due to constant closure from the COVID-19 pandemic. Cineplex recently chose not to renew its lease for its large theatre in Windsor. Many people were upset not only at the loss of a family outing, but also at the loss of potential Canadian films often presented in Cineplex theatres. Although streaming sites deliver movies instantly for viewers, these sites may further detriment movie theatres in your hometown.

Implications for studios and directors

The decline in movie theatre releases affects many local businesses and takes away community activity. On a practical note, however, these streaming service releases may be the only way for big studios to justify a big budget. For instance, Universal Studios was one of the first to try a streaming service release instead of theatre. In May 2020, Universal released “Trolls World Tour” as an on-demand purchase at $19.99. The film earned over $100 million in the US within three weeks. In contrast, the first “Trolls” film released in theatres in 2016 earned only $120 million over a five-month theatrical run.

Disney would certainly factor in this rapid profit-making capability for streaming services after witnessing a 75% spike in downloads after Hamilton was released on Disney+. Disney not only makes a quick profit, but streaming releases also promote Disney’s platform, allowing the company to earn additional revenue from Disney+ memberships. If Disney’s primary goal is revenue for every film release, streaming service releases seem to be the more profitable in a pandemic.  

Domee Shi sets the film Turning Red in Toronto as an homage to her hometown. She explicitly wanted to highlight her life in Canada and Toronto’s diverse culture and scenery . As Canadian VP of Walt Disney Studios Greg Mason notes, “Turning Red is truly a love letter to Toronto and Canada.” With Korean-Canadian Hollywood Star Sandra Oh as a lead voice actor in the film, Turning Red is intended to showcase all Canada has to offer in the arts. Unfortunately, the movie will not be released in any local Toronto theatres. The celebration of the film’s release and Toronto’s vibrant culture will be contained to our home screens.