Yes D+ is impacting theater turn out for Disney releases.
And they absolutely know this is happening.
Down about 25% from the original movies $240 million opening weekend, I’d love to be a fly on the wall when they discuss the acceptable losses due to D+.
164 million subscribers at $10 a month adds up quick but so does losing a couple hundred million on every new movie release. Losing a billion a year in box office to help make $20 billion a year in D+ revenue is probably justified, just depends on the other D+ costs.
You don't need to be a fly on the wall. Over and over the Bobs have said that streaming is the number one priority. And losses at the theaters (either from going direct to D+, or having a short window in the theaters) is an acceptable loss, since they are purposefully loss-leading their streamers.
Encanto even showed them the power of meme-ifying content precisely because it was quickly digitally accessible to so many subscribers all at once.
If Disney can make some money off of a movie before it winds up on D+, that's just gravy. Even if the movie didn't make a profit in the theaters, making something over nothing is an acceptable loss, because, in the end, once it passes onto streaming, it increased the value of D+/Hulu subscription.
The bragging points of theatrical big Box Office is replaced by bragging points of subs and 'minutes watched.'
And yes, big Box Office can give content some extra shine, so, it's not like they don't want that to happen, but, they're not crying over streamers cannibalizing theatrical releases (or linear programs, looking at you "Dancing with the Stars.")