Disney is banking on theatrical releases fueling Disney+ subscriptions, and on Disney+ sustaining its box-office dominance.

Disney CEO Bob Iger offered what he calls the highlight of the quarter during the company’s Q1 earnings call Tuesday: Just four months after launch, Disney+ has amassed 28.6 million subscribers — nearly halfway to the five-year goal of 30 million-60 million signups for the streaming service. In a climate where movies increasingly head straight to streaming, and theatrical exhibition is in crisis, that might raise questions about the need to release films in theaters at all. With such a promising direct-to-consumer pipeline, why take risky bets and split grosses with theater chains?

But this is Disney, for which 2019 offered equally impressive theatrical numbers. The company last year released seven films that grossed over $1 billion worldwide, bringing the studio’s box-office total to more than $11 billion, the most of any studio in any year, besting the previous record of $7.6 billion set by Disney in 2016. In case anyone needs reassurance (and exhibitors likely do), Disney signaled its intent to remain synonymous with theatrical tentpoles for the foreseeable future.

“The theatrical window is working for this company, and we have no plans to adjust it for our business,” Iger said.

After its acquisition of 20th Century Fox, Disney’s share of the US box office stood at nearly 40% last year, cementing it as crucial to the health of theatrical exhibition. Seven of last year’s 10 highest-grossing films were released by Disney.

The earnings call came as stock in the world’s largest theater chain, AMC, and the No. 2 American chain, Cinemark, have both hovered near their 52-week low, while AMC is down nearly 53% in the last year. In light of that, analyst David Miller of Imperial Capital suggested on the call the “market doesn’t really believe” Disney’s commitment to theatrical.

“We had the biggest box office, but we’re not the only movie company,” Iger said. “I suspect (theatrical company’s stock performance is) not due to us, or either a lack of conviction on our part, or any suspicion that we might not be telling the truth.”

Theatrical releases are not only important to Disney’s bottom line, but also to its Disney+ strategy. It’s a universe where event films released in theaters — like Marvel Cinematic Universe titles — build off not only each other, but also on exclusive Disney+ series and create demand for both streaming subscriptions and for movie tickets.

Up next is “The Falcon and the Winter Soldier,” a Disney+ series following the titular Marvel characters that will be released in August, and “Wandavision,” about Wanda Maximoff/Scarlet Witch and Vision, which premieres in December.

“These same characters and actors from the Marvel Cinematic Universe, along with events from these new shows, will factor into future Marvel films as we integrate storytelling across these platforms,” Iger said.

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