Upon his return as Disney’s “boomerang CEO,” Bob Iger faces a growing list of challenges, with one of the most pressing being the performance of the company’s animated family-friendly features and its implications for Disney’s streaming strategy.
Disney Animation’s latest offering, “Strange World,” made its debut over the long Thanksgiving holiday weekend, but its reception was far from impressive. During the Friday-through-Sunday window, the film grossed a mere $12.2 million in domestic box office revenue, with a total of $18.7 million over the four-day holiday break.
While “Strange World” managed to secure the second-place spot at the weekend box office, it was overshadowed by another Disney production, the Marvel sequel “Black Panther: Wakanda Forever,” which brought in a robust $45.6 million in its third week in theaters. To date, “Strange World” has generated just $28.7 million worldwide.
This lackluster opening suggests that the film is on track to lose over $100 million during its theatrical run. “Strange World” had a production budget of $180 million and incurred substantial expenses for distribution and marketing, making it a costly venture for Disney.
To recoup its costs and break even, the film would need to gross around $360 million, which is double its production budget. Unfortunately, it’s unlikely to receive significant support from international markets, as it has only brought in $9.4 million from 43 territories outside the United States, with notable exclusions like China and Russia.
Paul Dergarabedian, a senior Comscore analyst, commented on the film’s performance, noting that Disney family films typically draw large audiences during this time of year. However, he pointed out that the ongoing effects of the pandemic have had a significant impact on moviegoing habits.
The underperformance of “Strange World” comes on the heels of another Disney animated project, Pixar’s “Lightyear,” which also struggled to meet expectations. Although it opened with an impressive $51 million, it struggled in subsequent weeks, ending up with a global total of just $226 million before heading to Disney+ in August.
The challenges facing these films raise questions about the reasons behind their lackluster performance. One possibility is that families remain cautious about attending theaters due to the ongoing “triple-demic” of COVID-19, the flu, and respiratory syncytial syndrome (RSV). However, it’s worth noting that other family-oriented films, like “Minions: The Rise of Gru,” have achieved considerable success at the box office this year.
Another factor could be the quality of the films themselves. While both “Strange World” and “Lightyear” received decent ratings from critics and audiences on platforms like Rotten Tomatoes, they may have faced strong competition in a challenging market.
However, there’s another critical factor to consider: the rise of streaming services and their impact on family-friendly programming. Disney’s own streaming platform, Disney+, has rapidly grown in popularity, especially during the pandemic, when families spent more time at home.
Under the leadership of former CEO Bob Chapek and distribution executive Kareem Daniel, Disney opted to release several Pixar and Disney Animation projects directly on Disney+ during the early days of the pandemic. Some major releases also arrived on the platform within 45 days of their theatrical debuts, which led to conflicts with key talent, like Scarlett Johansson, who sued Disney over lost profit-sharing revenues.
This shift in release strategy may have unintentionally conditioned audiences to wait for these animated films to become available on Disney+ rather than attending theaters. Families might find it more cost-effective and convenient to subscribe to Disney+ for a month, which costs roughly the same as a single movie ticket, and access these films shortly after release.
Bob Iger, who returned to Disney after Chapek’s departure, has indicated that he plans to reverse some of the organizational changes made during Chapek’s tenure. He aims to return greenlighting power to creative executives within each division and prioritize profitability over subscriber growth.
Disney’s iconic franchises, such as Marvel and Star Wars, also face challenges, with signs of fan fatigue becoming apparent. The long-awaited sequel to James Cameron’s “Avatar” is set to hit theaters, while sequels like “Disenchanted” and “Hocus Pocus 2” went directly to streaming platforms, raising questions about their potential box office revenue.
Streaming giant Netflix has faced similar scrutiny regarding its release strategies, with some suggesting that certain films could have generated more revenue with longer theatrical runs.
As Bob Iger assumes his role once again, he faces the daunting task of navigating these complex challenges and ensuring that Disney remains profitable in both its legacy divisions and its streaming operations. While empowering creative executives is a step in the right direction, it is just one piece of the puzzle as Disney strives to adapt to changing consumer behaviors and market dynamics.
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