How Disney narrowly avoided leaving $1.3 billion of box office revenue on the cutting room floor

Whichever Disney exec made the call to pivot “Lilo & Stitch” from a direct-to-streaming release to a theatrical run is probably feeling pretty good today.

The live-action remake led this weekend’s white-hot box office, surging beyond expectations and pulling in more than $360 million worldwide over the holiday weekend. Somewhat shockingly, the film was originally developed as a Disney+ original.

Luckily for Disney, those plans shifted sometime around August 2024, when the entertainment giant announced that the film would receive a theatrical release. A few months later, Disney’s “Moana 2” — a film similarly created first as a Disney+ show — debuted in theaters and went on to gross more than $1 billion worldwide.

Had these titles been kept direct-to-streaming (this decade’s version of straight-to-VHS), their success would have been measured not by sales but by their ability to attract and retain Disney+ subscribers. Instead, they’ll likely still give Disney+ a boost while also scoring the company an impressive sum at the box office.

During the height of the Covid pandemic, Disney made the direct-to-Disney+ choice for several Pixar films, including “Soul,” “Luca,” and “Turning Red.” Other films released around the same time, like “Encanto,” were given initial theatrical releases.

Still, losing out on box office revenue is less detrimental for Disney than it would be for rivals like Warner Bros. or Comcast. Disney IP is far more valuable as a driver of merchandise and parks visits, as seen in recent revenue reports:

Stitch-themed toys, clothing, and gear are a massive sales driver for Disney, with or without a film in theaters. Last year, 22 years after the original film was released, “Lilo & Stitch”-related retail sales totaled $2.6 billion.

There’s still a major unknown factor of just how much Disney can drive merch sales and retain parks interest through Disney+ and Hulu, with a combined 180 million subscribers.

What’s telling, however, are CEO Bob Iger’s repeated comments about how the company “invested too much” and “lost a little focus” with its massive streaming push.