Disney Animated films have long been a mainstay of theatrical entertainment. So it should come as no surprise that they had two big box office hits this year with the highest-grossing animated film of all time, Inside Out 2, and another remarkable film, Moana 2. However, it was only a few years ago that a seismic shift in Disney's release model occurred. With the onset of the COVID-19 pandemic, Disney had just entered the streaming wars with Disney+. The result was Disney's decision to release major animated films directly on its newly created streaming service, bypassing theatrical release altogether.
Although this strategy initially made sense during the pandemic, it persisted long after cinemas reopened, favoring shorter release windows and day-and-date models. All this could change with the success of Inside Out 2 and Moana 2. These highly anticipated sequels have so far grossed over two billion dollars collectively, demonstrating that audiences still desire the cinematic experience. From the inside out 2 It alone could be a game changer for Disney. Not only is there revived excitement surrounding its animated offerings, but it's also sending a clear signal: the era of skipping theatrical releases for big animated projects needs to end.
Disney's decision to put animated films on Disney+ instead of in theaters caused backlash
Disney's streaming strategy has sparked controversy among fans, creators and the industry
When it was announced in 2020 that Disney Pixar's highly anticipated new feature, Soulwas skipping theaters and going straight to Disney+, for many this led to disappointment and anger. For decades, Disney and Pixar were a gold standard that many trusted. Fans craved a magical community experience, exhibitors were able to bring audiences to theaters, and the people who made the films were able to see their hard work being carried out on the city's biggest screens. However, Instead, Disney doubled down on its new streaming strategy, following Soul above with Raya and the Last Dragon, Lukeand Turning red.
When these films had very short specialized theatrical releases, or were released entirely on Disney+, many felt the magic was lost. Exhibitors took a huge hit, creatives were demoralized, and fans missed out on the Disney magic. The streaming-first strategy reduced the film's cultural impact, turning films that could have been cinematic events into mere digital releases. The potential financial losses may have also spread across Disney's other verticals, as animated films have historically generated not only ticket sales but also demand for domestic merchandise and media. For Disney, it was a clear case of leaving money (and magic) on the table.
Disney's streaming shift began during the Covid-19 pandemic (but continued for a long time)
Disney's pandemic-era strategy has outstayed its welcome and cost them dearly
When the COVID-19 pandemic hit in 2020, studios were in crisis. Filming came to an abrupt halt, theaters closed their popcorn machines, and release dates had to be postponed indefinitely. Fortunately, most studios had recently launched (or were about to launch) their respective streaming services. In a way, they had a get-out-of-jail-free card; a means of releasing your films directly to audiences from the safety of their own homes. Disney's decision to release Soul was a practical necessity. For families cooped up at home, these streaming releases were a welcome relief, and Disney+ subscriptions soared.
The box office earnings of Inside Out 2 and Moana 2 It far surpassed what they could have achieved through streaming alone.
However, as COVID-19 eased and the world began to open up, studios weren't eager to return to theaters. After all, they had subscriber numbers to keep them happy. Instead, most opted for hybrid models. Depending on the movie, they could put it in theaters for a short period before putting it on streaming, they could release it day and date (the movie is released in theaters and on streaming on the same day), or they they could play it straight for streaming. Disney opted for this strategy, but it didn't always work out. Strange World suffered due to this hybrid model, receiving limited marketing and dismal box office numbers before quietly abandoning Disney+.
This post-pandemic reliance on streaming has undermined the prestige of Disney's animated releases. The contrast with Disney's live-action films was striking. Although blockbusters like The Little Mermaid remake received theatrical releases, animation projects were relegated to Disney+, giving the impression that animation was no longer a priority. This prolonged streaming strategy has alienated audiences and tarnished the brand’s reputation for offering unmissable lively events – even Inside Out 2 It was released, I mean.
The success of Inside Out 2 and Moana 2 proves that Disney needs to release its big animated films in theaters
Movie theaters must still be important to Disney if they want to repeat their recent success
Inside Out 2 was released in June 2024. It was the sequel to the highly successful and acclaimed From the inside out. There was a lot of excitement for this sequel. Everyone was excited to revisit Riley's emotional world. However, no one could have imagined the numbers this would generate. Inside Out 2 earned nearly 1.7 billion dollars gross internationally (via Mojo Box Office), and is the highest-grossing animated film of all time. Disney didn't stop there. Moana 2, which was originally supposed to be released episodically on Disney+, was quickly turned into a feature film and released in theaters on Thanksgiving weekend 2024. The decision turned out to be worth it, as Moana 2 currently earned over 700 million worldwide to date (via Mojo Box Office).
From a financial point of view, the numbers speak for themselves. The box office earnings of Inside Out 2 and Moana 2 It far surpassed what they could have achieved through streaming alone. Success will also spark greater interest in merchandise, theme park attractions, and eventually Disney+ streams, creating a revenue cycle. These successes highlight the importance of Disney releasing its animated films in theaters. The cinematic experience elevates these films, creating something of cultural significance. In turn, it generates word-of-mouth buzz that is often missing from streaming premieres.
Disney's legacy is built on its animated classics, and its recent successes prove that the appetite for animated cinema is stronger than ever. When prioritizing theatrical releases for your big animation projects Disney can restore its reputation as the premier studio for unforgettable family entertainment.