How ‘Moana 2’ Jumped From Streaming to Theaters — And Could Help Disney Animation Rebound

During its first quarter earnings call earlier this month, Disney announced that the next animated film it will bring to theaters on Thanksgiving will be the sequel to its 2016 hit “Moana,” signaling a renewed push on sequels after years of original animated titles.

But “Moana 2” was originally announced in 2020, under short-lived CEO Bob Chapek, as a streaming series exclusive to Disney+. This change underscores a shifting strategy by Disney and other studios to move films previously planned for streaming to the big screen — in part to calm jittery investors nervous about the thin pipeline of tentpole movies after the Hollywood strikes.

The “Moana 2” re-direct follows Paramount’s “Mean Girls” and “Smile,” and Warner Bros./New Line’s “Evil Dead Rise,” all theatrical releases that were originally intended to be streaming-only.

“Studios are showing that when they see signs of high quality in a project they greenlit for streaming… they’re moving them back to theaters to take advantage of the full life cycle of revenue that only a theatrical release can provide,” said Boxoffice editor Daniel Loria.

The move is just one example of how CEO Bob Iger is shifting Disney’s strategy away from his one-time successor’s plans, as the entertainment giant struggles with a sluggish stock price and restless investors concerned about Disney’s declining linear TV assets and poorly performing franchise films. And it appears to be working, as Disney’s stock price has since responded with a 13% bump.

The switch was set in motion a few months ago, when Disney execs started getting a look at nearly finished episodes of the long-developing “Moana” series. The episodes, written and directed by David G. Derrick Jr. and animated at Walt Disney Animation Studios’ Canadian satellite studio, got a big thumbs up. Iger noted on the company’s earnings call last week that some at the studio thought it could be better than the movie. Soon, a plan was hatched: Could the episodes be combined into a single theatrical experience?

“We were impressed with what we saw, and we knew it deserved a theatrical release,” Iger said. “The original ‘Moana’ film from 2016 recently crossed 1 billion hours streamed on Disney+ and was the most-streamed movie of 2023 on any platform in the U.S.”

Disney wrestled with the concept, keeping the Thanksgiving 2024 release date open in case one of its other projects, like “Zootopia 2,” was further along. But soon it became apparent that the slot needed to go to this “Moana” follow-up.

Leaning into familiar IP

Given the multiyear development process that comes with any animated project, Disney isn’t pivoting back to sequels in direct response to box office trends. Releasing “Moana 2” this November — and giving Thanksgiving 2025 to a sequel to the billion-dollar hit “Zootopia” — not only aligns with the dominance of familiar IP in the family film space but also with Disney’s plans in other parts of the company.

“Given the environment and given what it takes to get people out of their homes to see a film … leaning on franchises that are familiar is actually a smart thing,” Iger said.

Since theaters reopened in spring 2021, the animated films that have been the biggest hits were IP-driven, whether it is Illumination’s “The Super Mario Bros. Movie” ($1.36 billion at the global box office) and “Minions: The Rise of Gru” ($940 million) or Sony Pictures Animation’s “Spider-Man: Across the Spider-Verse” (a studio record $690.8 million).

On the original side, the only post-shutdown release to make any sort of significant impact on the box office was Pixar’s “Elemental,” a film that struggled to gain much pre-release buzz and suffered the worst opening weekend in Pixar history, only to recover spectacularly thanks to excellent word-of-mouth. It went on to gross $497 million worldwide.

Beyond the Oscar-nominated “Elemental,” Disney Animation has seen its last two original films, “Strange World” ($73.6 million worldwide) and “Wish,” ($246.6 million), crash after tepid reviews and poor results from their respective Thanksgiving releases. Other studios haven’t done much better. DreamWorks saw “Ruby Gillman: Teenage Kraken” bomb even harder ($45.5 million) while Illumination’s holiday 2023 film “Migration” ($235.7 million) did decently against its $90 million budget but fell well short of the $481.6 million that the DreamWorks holiday 2022 sequel “Puss in Boots: The Last Wish” grossed.

It’s difficult to say how some of Disney’s well-received original films would have done if they had gotten full theatrical releases rather than a shortened run prior to a holiday Disney+ release, like “Encanto” in 2021. Or if they had skipped theaters entirely, like Pixar’s “Turning Red” in 2022.

But with Universal supplanting Disney as the studio providing the biggest theatrical draws among families in 2023, Iger’s team is looking to the beloved characters it introduced in the 2010s like Moana, Maui and Nick Wilde to restore its standing in a more competitive animated market.

Trickle-down impacts

And if it does, the riches will extend well beyond ticket sales. Disney’s theme park division is heavily investing in new “Moana” and “Zootopia” themed experiences, including a recently opened “Moana” ride at EPCOT in Orlando and an entire “Zootopia” section at Shanghai Disney Resort. Should the sequels be as well received by families as their 2016 predecessors, it will almost certainly trickle down to increased theme park turnout.

“Look at how much more expensive it is for families to see a movie in theaters than watch it at home. The families who do go to the theaters are more likely to spend money for a trip to Disney’s theme parks,” said Laura Martin, senior media analyst for Needham & Company.

“When Disney has, say, $100 million they’re investing into a major park project, the box office can serve as a voting mechanism, especially with families, as to what franchises they are most interested in and would probably get the most turnout if added to Disneyland or Disney World,” Martin added.

Other revenue streams flow from a theatrical release, like the countless forms of merchandise and toys that launch along with any major family film. Disney was able to create such merch success with some of the films it pivoted to streaming. “Turning Red” in particular got a massive merchandise line when it first hit Disney+.

But Chapek’s plans to push further by launching franchises through streaming exclusives has given way to Iger’s return to tried-and-true theatrical methods.

“Disney got as big as it did from extremely smart windowing, not just theatrically but in home entertainment with limited releases of home video,” Loria said. “Disney+ was their attempt to evolve that, but I never understood why they tried sacrificing theatrical windowing to boost streaming. Even Netflix with their truncated theatrical runs understands that putting films in theaters eventizes them.”

The failure of “Strange World” and the struggle of “Wish” left theaters struggling to make up for what has traditionally been a major start to the winter box office over the last couple of years. If “Moana 2” and “Zootopia 2” can thrive alongside Universal’s two-part adaptation of “Wicked,” exhibitors may finally see its first healthy Thanksgiving box office since the pandemic shut them down.

“This is an opportunity that exhibition hasn’t had in five years,” Loria said. “We’ve seen with ‘Barbie’ and ‘Oppenheimer’ that more than one tentpole can coexist. If two films with different and/or overlapping films perform well together, that’s going to be a big step to getting the market back to pre-pandemic levels.”

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