The number say otherwise when you compare the money they pulled in from rereleasing movies vs outright sales of the movies on VHS. The Disney Vault you speak of was created after the made the Eisner move and dumped the movies onto the market. It was an attempt to put the genie back in the bottle. If they had never sold the classics (Snow White, Cinderella, Peter Pan etc.) they could have easily kept printing money year after year. Rerelease Disney classic every quarter over and over... And the market studies supported that plan. There are only a certain type of Disney movie that wouldn't have worked because they would have been dated, like the awful life action movie such as Super Dad. What you are failing to realize is that while a family wouldn't take little Billy to see Peter Pan every year, by the time they release Peter Pan 7 years later little Billy was no longer their target audience it was now little Billy's little brother or the neighbor's kid. So think a family wouldn't go back doesn't hold up, the years that they did those types of releases proved that it was a viable strategy.
I don't think you work in the industry. I do - at a very high level. There has been lots of studies on the revenue streams of home entertainment vs. theatrical and how to properly capitalize on them both. Yes there is a core group of fans who may go to a re-release of Cinderella or Snow White, but not in the way you think - especially when there is a massive amount of competition with new films each week and only limited screens. Bottom line is that home entertainment opened a new revenue stream for Disney in a way that didn't exist previously by taking movies that were sitting on a shelf and essentially creating cash out of thin air with existing products.
Again, had Disney not gotten into the home entertainment businesses, shareholders and industry analysts would have been exceptionally critical of why such demand was not being met. Disney isn't unique in having in-demand IP. Every other studio had the same issue with their own flagship properties and all opted to release on VHS in some manner.
Many of the films you know/love today, including many of Disney's, were middling box office successes and it's only because of cable airings or VHS availability that they have gone on to enormous success as beloved films.
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