The $170 million loss barely registered as a blip, but Bob Iger's Q3 earnings call will serve as a template for how the industry moves forward.

When The Walt Disney Company announced its third-quarter earnings August 6 with a $170 million loss that came from underperforming Fox films, that wasn’t the big news. “The fundamentals of Disney are strong and certainly staying strong,” said Jimmy Schaeffler, CEO of media consultancy the Carmel Group. “I don’t know too many people who wouldn’t argue they aren’t getting stronger.”

However, with that quarterly report, one company effectively set the agenda for Hollywood’s future: Big movies belong in theaters. A theatrical original is a prestige play. For everything else, there’s streaming — which will demand aggressive pricing and relentless marketing across all quadrants to reach the scale needed for success. Expect all cylinders firing by 2021. Any questions?

Iger spoke plainly: His company had a loss, a real one. However, it stemmed from the acquisition of a movie studio that was in worse shape than he’d hoped — and, he wanted to make clear, that had nothing to do with the Disney agenda, which already has seen $8 billion in box office this year.

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“I’ll note that the performance of the Disney Film Studio continues to be incredibly strong,” he said on the earnings call. “This quarter’s theatrical slate, including “Avengers: Endgame,’ ‘Aladdin,’ ‘Toy Story 4,’ and the carryover success of ‘Captain Marvel,’ drove higher worldwide theatrical results compared to what was also an outstanding slate of films during the third quarter last year, which included ‘Avengers: Infinity War,’ ‘Incredibles 2,’ and ‘Black Panther.'”

While the only underperforming Fox title he mentioned by name was superhero flop “Dark Phoenix,” the others were “Stuber,” “Breakthrough,” and Fox Searchlight’s “Tolkien,” which Disney released in May. Those films, along with “The Art of Racing in the Rain,” a Fox title set for release Friday, seem quaint in the face of a 21st-century box-office environment that loves blockbusters almost exclusively.

And, as Iger said, that won’t happen again on Disney’s watch: Fox was going in a “new direction … applying the same discipline and creative standards behind the success of Disney, Pixar, Marvel, and Lucasfilm.” If those movies are good enough, they’ll go theatrical; others will be destined for Hulu and Disney+. Among the once-lucrative big-screen franchises headed for home-viewing development are “Home Alone,” “Night at the Museum,” “Cheaper by the Dozen” and “Diary of a Wimpy Kid.”

Estimated time for all these changes to take effect? As Iger told JP Morgan managing director Alexia Quadrani: “A couple of years.”

Meanwhile, the full-press marketing push for Disney+ starts this month, with members of D23 — the 10-year-old official fan club for The Walt Disney Company, which costs $100 a year — getting the first opportunity to buy the service, which will be pushed through all Disney touch points worldwide — parks, hotels, credit cards. (“I could go on and on,” said Iger.)

Disney’s streaming plans could be a major disruption to Netflix, Schaeffler said, saying the company is “brilliant” to bundle three platforms: Disney Plus, Hulu and ESPN+ for $13 — a dollar more than Netflix’s standard package.

“It’s going to be able to access such a remarkable demographic,” he said, including kids, families, adults, and sports lovers. And while the price point may not make Disney a lot of money to start, it will allow them to count possibly hundreds of millions of subscribers worldwide, from whom the company can collect data to keep viewers hooked with relevant original programming — just like Netflix.

Kimberley French. © 2019 Twentieth Century Fox Film Corporation

Finally, there’s the indies — the market sector that lives and dies by contrarian visions. Fox Searchlight barely rated a mention on the call, with Iger saying only: “Fox Searchlight will continue to make the prestige films it’s known for while expanding its high-quality original storytelling into the DTC space.” That take, which suggests that only awards plays are assured theatrical runs, could be a greater culture shock for the specialty division than for its major-studio counterparts. It would put Searchlight acquisition offers toe-to-toe with streamers like Netflix and Amazon (which is also becoming much more selective about booking theatrical runs).

That said, Searchlight plays an essential role in the Disney ecosystem. It’s key for servicing top talent like Taika Watiti, the filmmaker who put Disney in the unusual position of releasing a Hitler satire for awards consideration, “Jojo Rabbit” — but who’s also going to direct Marvel’s “Thor: Love and Thunder,” just saw the renewal of FX series “What We Do in the Shadows,” and directed an episode of “The Mandalorian” for Disney+. He’s also directing another film for Searchlight, “Next Goal Wins,” based on Mike Brett and Steve Jamison’s 2014 soccer documentary; whether it’s a theatrical or streaming title remains to be seen.

For indie filmmakers, who have long viewed Fox Searchlight distribution as the best of all possible worlds, it’s likely they will see a trickle-down of the binary marketplace. Here’s what that might look like: The very, very top films with awards potential will see generous theatrical offers and bidding wars that price out all but the deepest pockets. The highest-quality films with no clear awards play will also see strong offers and bidding wars, but from streamers, and considerably less generous offers from independent theatrical distributors. For everyone else, it looks like a struggle — although they could also benefit from the streamers’ ongoing arms race to acquire the content mass necessary to achieve market dominance.

Outside Disney, of course, no one has to hew to this vision. It’s possible other major studios might take a counterprogramming view when it comes to theatrical releases outside the blockbuster/prestige mode, but that would mean risk — something studios have never liked in the best of circumstances. And when the studio that lays claim to 40 percent of the domestic box office sets an agenda, its competitors tend to listen.

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