'The Rocky Horror Picture Show' is one of the only 20th Century Fox titles Disney isn't pulling from distribution. ©Twentieth Century Fox

Disney's tight grip on Fox movies is hurting fans and theater owners

Remember the VHS and theatrical re-releases of classic Disney movies in the 1980s and ‘90s? When Disney would open its “vault” and goad parents into buying movie tickets and videotapes (then DVDs and Blu-Ray discs) to show their kids the cartoons and musicals they grew up on? Locking away films in the Disney Vault is still a practice, but as the Mouse has gobbled up properties like Marvel and Lucasfilm and 21st Century Fox the inventory of new and classic films it owns has grown massively.

Disney bought Fox for $7.3 billion this past spring. It acquired Marvel for $4.24 billion in 2009 and has profited off the massive popularity of the Marvel Cinematic Universe, spun off in 2008 after the release of Iron Man. The Mouse purchased Lucasfilm for $4.05 billion in 2012, ushering in a new trio of official Star Wars films and a number of spin-offs.

Clamping down on its newly-acquired Fox properties, however, hits film fans and movie theater owners where it hurts. The deal transferred ownership to Disney of hundreds of older 20th Century Fox titles — beloved classics like Miracle on 34th Street, The Princess Bride, Moulin Rouge, Fight Club, Alien, Aliens, Say Anything, All About Eve, The Sound of Music, The Simpsons Movie, The Fly, Deadpool, Die Hard, Home Alone, the Fast and the Furious franchise, 28 Days Later, Planet of the Apes, Mrs. Doubtfire, and Big to name just a few.

Reporting by Vulture revealed that a number of small theater owners and festival programmers have had their requests to screen Fox movies denied this year. Joe Neff, who organizes 24-hour science fiction and horror movie marathons every fall and spring in Columbus, Ohio, said he was told he couldn’t screen The Fly or The Omen this Halloween. The Transit Drive-In in Lockport, New York often hosted popular screenings of Fox classics like Moulin Rouge, The Princess Bride, and Alien but told Vulture those titles are now off the table. The Little Theater in Rochester, New York, was initially told it couldn’t screen Fight Club this August, but then Disney changed its tune after a Los Angeles Times reporter called the company trying to clarify its distribution policies.

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A film distributor with insider knowledge at Disney told Vulture that the policy is aimed at theaters that screen new Disney and Fox movies alongside classic titles. The distributor said that nonprofit theaters, like Film Forum in New York, would still be allowed to screen older films. But the lockdown on old content and insistence on only distributing new Disney and Fox features to movie houses materially hurts theater owners’ bottom line.

“It may not seem like a big deal, losing access to movies that might only make the theater $600 or $1,000 once you deduct the costs attached to booking them, but over the course of a year, it all adds up. A lot of these movies are what you’d call ‘steady earners’ for theaters. You show them, and people turn up,” another film programmer, who requested anonymity for fear of angering Disney, told Vulture.

Christopher Escobar, who owns landmark theater the Plaza in Atlanta, estimated that 25% of its yearly revenue comes from Fox titles. Half of that comes from late-night screenings of The Rocky Horror Picture Show — one film Disney has deigned to not touch. “Maybe Disney knows that if they pull Rocky Horror too, there’ll be a full-scale audience revolt,” said Rachel Fox, the senior programmer for the Rio Theater near Vancouver. But Escobar estimated that even with Rocky Horror, he’ll lose 10 to 12 percent of his income without access to the other Fox titles.

The most posited theory is that the tight grip on Fox titles stems from the desire to drive consumers towards Disney-owned streaming platforms, the forthcoming Disney+ and recent acquisition Hulu. But audiences who watch films at home versus those who go to movie theaters don’t tend to overlap; one is a pastime and the other is an outing. The more likely answer is that the crackdown is par-for-the-course behavior from Disney, who already controlled 40% of movie theater ticket sales and is expected to catapult to 50% once the Fox deal pays off. The Mouse is simply looking to treat its newly-enlarged library the same way it does the rest of its properties: by fiercely guarding and milking every last ounce of profit from its IP.

Can we expect an Alien musical on Broadway anytime soon? An adventure ride at Disney World themed like The Princess Bride? Child-friendly spinoffs of Fight Club, titled Daycare Smackdown and Playground Punishment? The dollar bills practically print themselves.