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The Problem with ‘the Single’ in Disney’s Movie Business

Disney movie tie ins

In his examination of Disney’s “Dumbo,” “Forbes” writer Scott Mendelson laments the Disney Company’s penchant for releasing big budget films that have already been made, including the live-action remakes of animated classics and the multiple sequels that Disney has released over the course of roughly the last decade, and while he acknowledges that the studios are in part to blame, he also lays the blame on movie goers. “The studios can’t responsibly green-light what they know audiences will not go to see in theaters.”

The Dollars and Sense of It All

In 1984, when Michael Eisner became CEO of the Disney Company, the top grossing movie was “Beverly Hills Cop” with almost $235 million and $316 million worldwide. Disney’s movie releases were in the tank and not making what they should be with a few exceptions. In 1984, Touchstone’s “Splash” opened at No. 1 on the chart and grossed over $69 million (Box Office Mojo) by the time it finished its run; it cost $8 million to make. The film was a huge success at the time, and it brought in about $62 million profit.

Eisner looked at the situation and decided that Disney and its movie making companies would make smaller budget films that would make money rather than hope for a summer blockbuster that could fail. They were going to hit singles rather than try for homeruns. In 1986, “Ruthless People,” “Down and Out in Beverly Hills” and “The Color of Money” were released with grosses of $71, $62 and $52 million making them the 9th, 11th and 12th highest grossing movies of the year. Eisner’s strategy was successful, and Disney carved out a niche with these low budget, over-performing types of films.

Flash forward to 2018 and the surprise hit (not Disney) “A Quiet Place.” With a budget of $17 million dollars, this is the type of film Disney would’ve happily made in the 1980s. The movie made $340 million dollars worldwide ($323 million profit). Marvel’s “Black Panther” cost about $200 million to make and brought in over $1.3 billion; domestically, it was the top grossing film of the year. It would take about three “A Quiet Place” size releases to make the same amount of profit as “Black Panther.” However, “Black Panther” was a surprise in its own way.

Marvel’s sure thing for the year was “The Avengers: Infinity War” – a sequel, which according to the just over $2 billion box office gross, you’re probably familiar with. The estimates for the cost of the film run between $300 million and $400 million. Even on the high side of the estimate, the film brought in $1.6 billion, or the rough equivalent of five “A Quiet Places.”

I understand these numbers aren’t exact. There are marketing costs to consider as well as what the actual theaters make, which is different depending on the country. However, the point is it doesn’t make any sense for a company that brings in $12.6 billion (2018 net income) to worry about $10 or $20 million, the budget of “A Quiet Place” for a return of only $323 million. As Mendelson pointed out, Disney had taken risks with “Tomorrowland” (profit at a scant $20 million), “The Finest Hours” (losses estimated at $20 million), and “The Queen of Katwe” (estimated loss of $5 million). These movies didn’t return enough profit to justify their existence.

Other Sources of Income

When “Star Trek” dolls were released and the series ended, the sales of the toys dried up as well. There wasn’t anyway to remind people about the purpose of the toys without the show. When “Star Trek: The Next Generation” returned the Star Trek universe to television, toy sales skyrocketed.

In 1983, Funimation released “He-Man and the Masters of the Universe” after Reagan deregulated children’s programming. The show was designed to sell He-Man action figures. Once it made it on the air and He-Man sales sky-rocketed every toy company got involved in Saturday Morning Cartoons: “Transformers,” “Go-Bots,” “M.A.S.K.,” “Jem and the Holograms,” and “G.I. Joe” to name a few. Whether the show or the action figures came first is of little consequence, what mattered was that some of the cartoons were pulled from the air not because of the cartoons’ popularity, but because the toys lacked sales.

Disney’s synergistic approach to marketing means the media giant isn’t looking just at the movies. It’s also looking at what it can make from tie-ins. Dumbo’s new movie release, regardless of how it’s received, sells more stuffed Dumbos. Marvel’s movies sell more superhero action figures, Lego sets, and whatever else they put their characters on. These things all bring in more money. Disney princesses outsell Barbie now are a multi-billion-dollar market segment. Their inclusion in “Ralph Breaks the Internet” keeps them fresh, updates them for this generation and keeps the product moving. The Disney company not only needs to create movie sequels and remakes because they are smaller financial risks, but also because they sell more toys, products and Disney park experiences.

What’s It All Mean?

There’s no incentive for Disney to green-light smaller film projects, even if they become the next “A Quiet Place.” The movie industry can only stand so many new films before there aren’t enough movie-goers to see them all. Worse, people say they want new stories, but they only think they want new stories. Audiences still flock to their favorite characters and movie franchises because its an acceptable risk. To spend $10 to $15 on a movie that you may not like or know nothing about doesn’t make much sense when you know that Marvel (or DC or Pixar) has a release right around the corner.

Moreover, Disney can make more money from product friendly franchises that it can tie into its theme parks than it ever could from a movie that has to stand on its own two legs. This all becomes more problematic with Disney’s recent acquisition of 20th Century Fox, and it’s looming control of 40 to 50 percent of the box office. The studios will have to schedule movies so they don’t cut into each other’s profits, which will mean fewer movies and fewer opportunities for a smaller film to get made.

For more on the Disney Company, preorder “Penguinate! The Disney Company.

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