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Disney to release rest of 2021 films in cinemas first

Yahoo Finance's Alexandra Canal breaks down the latest from Disney after the production powerhouse tweaked its theatrical release strategy for the rest of the year.

Video transcript

SEANA SMITH: Now it's time for Fame and Fortune. And today, Disney doubling down on theaters. It's committing to debuting the rest of its films for this year in theaters. We want to bring in Alexandra Canal, who is following this story for us. And Ali, we're certainly seeing its effect here on the sector, not a big surprise, but a lot of those movie theater stocks moving to the upside today as a result of this news.

ALEXANDRA CANAL: Yeah. If you take a look at some of the big theater chains, we have AMC up over 4%, IMAX up over 9%, Cinemark also up almost at 9%. So this is a really big, big deal for these theater chains. They're relying very heavily on this fall and winter movie slate.

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And now that we have Disney, which is a big powerhouse, big production powerhouse, they really set the stage for a lot of these other studios. And now that they've decided to release all of their 2020 films in theaters first before any streaming option, that is something to celebrate. And that does include some big titles, like "Eternals," like "West Side Story."

Disney has experimented with its release strategy. Amid COVID-19, they opted to debut some of their bigger titles on Disney+ at the same time as theaters. If you remember, that was kind of controversial when they did that with Marvel's "Black Widow." They had it on Disney+ as a premium VOD offering for $30 a pop. And then it was also in theaters. Now, it did do pretty well in theaters, grossing around 80 million in its domestic debut. However, some analysts thought that they could have done even better at the box office, had they not had that streaming option.

Now, of course, this does come on the heels of a very successful debut of Marvel's "Shang-Chi." That set a new Labor Day weekend record, grossing over $90 million over those first four days. So that was also in optimistic news.

But by and large, theaters have struggled amid this pandemic. They are still not at those pre-pandemic levels. So anything like this, where you're really betting on theaters, you're betting that people are going to show up at the box office, that is always a good sign. And we are seeing that reflected in the stock reaction today.