Disney (and others) at the Box Office - Current State of Affairs

[TP2000]

I wouldn’t be surprised if it gains more ground overseas via word of mouth. I’m not sure if Stitch is as well known internationally as he is in the US, and the whole Millennial nostalgia thing might not apply globally. Even so, it’s an adorable movie and people who were puzzled by posters of a drooling blue alien early on might be won over as they hear more about it.

Well, that would certainly help.

When you look at Lilo & Stitch compared to recent live action tentpoles, it's overseas box office is much weaker than it should be compared to its relatively strong domestic take thus far. Based on its holiday weekend haul in the USA of $182 Million, it should have done at least $225 Million overseas as of yesterday. On its way to an overseas total of at least $600 or $700 Million, to bolster the $500+ Million it will likely do in the USA.

Instead, it has only made $178 Million overseas so far.

Let's get all those foreigners talking about this movie in their funny accents, and then buying tickets with their weird money!

 

[Disney Irish]

As I remember, the concept of only counting 25% of production costs for marketing was suggested because it pushes the marketing costs out into future years for a sort of pre-marketing for future potential streaming rentals.

My point is they spent the money now to market the movies now, so that's what it cost them now. 50% of production costs on marketing is not something invented in 2018 for the new streaming model. An assumption that a movie studio spends 50% of its production budget on marketing goes back decades.

Although, if it were still 1995, maybe you could make the claim that you could pretend they only spent 25% on marketing because the rest will help future VHS rentals next year at Blockbuster?



He's an adult and a genuinely nice person, and we've enjoyed each other's online discussions for many, many years now. I have read his opinion on why Disney spending $100 Million on marketing Lilo & Stitch in May, 2025 should only be counted as $25 Million (25% of its $100 Million production budget), but it just gets too wonky for me to factor in to the daily numbers in a discussion about box office profit now, not a year or two from now.

Plus, there's the fact there's no real ability to circle back 18 months from now and see what rental income came in on it.

So I'm just going to stick with the industry standard practice of assuming 50% of the production budget was spent on marketing, unless Disney or reputable sources say otherwise, like they have recently with $140 Million spent marketing The Little Mermaid and $100 Million on Lilo & Stitch.

If it weren't for the Variety article saying Burbank just spent $100 Million on it, I'd consider it a $50 Million marketing spend.

The idea is and continues to be that the marketing spend of a movie is for the life of the movie NOT just theatrical. So its ad buys for now AND the future, and not all is spent NOW.

So really if you want to get technical, the 25% is the floor of what they would spend ONLY during theatrical not the entire life of the movie, its to isolate out a more realistic number on average and remove any post-theatrical ad buys that would occur as the movie is wrapping up it theatrical release. And that is not to say that a studio can't and doesn't spend more a lot of times, but its the average of JUST the theatrical space.

You guys don't want to count any post-theatrical revenue because you consider it future revenue (which actually isn't the case many times as was also previous discussed since those contracts are figured out head of time), so why try to count the entire marketing cost to the front-end? Its over inflating the costs for no reason.

Its not a hard concept to understand if you're really wanting to get as close to the real profit/loss of a movie only during theatrical. But I don't think you really do.

 

[BrianLo]

And just to confirm, your fast math is using the assumption they only spent 25% of the production budget on marketing, correct?

Not really. It’s that there’s a usually a 1.25X relationship between production costs, box office and ultimate profit. I don’t assume marketing at all, because it’s elastic and not a fixed variable one can calculate reliably.

I was trying to frame it in a way that you’d maybe get, that *some* costs are already pre-covered by back end deals.

How do you handle movies where Disney is reported to have spent more than 25%? Like the $100 Million that Variety reports Disney spent on marketing Lilo & Stitch against its $100 Million production budget?

I actually ran a 3X multiple for Stitch incidentally, for you. I wasn’t running against 25% but rather 50%. For the record, I made this post before Deadline, which maybe suggests I’m not always out to lunch here with my logic! You are trying to run a 4X multiple now though… which is not a relationship I have ever seen demonstrated with any single film production.

Stitch is pretty notable at 100M budget. Seems like one of those direct to D+ ventures Iger pulled out to theatrical. Very smartly, obviously.

Now everyone ready for my unhinged curveball? I think a 3X multiplier is quite justified for Stitch. It may be budgeted as a medium film, but there’s no way they aren’t throwing a typical Disney marketing blitz at it.

 

[BrianLo]

I probably could have prevented 12 posts if TP knew I didn’t use 25% but 50%.

Sorry that was not clear!

It was something like (340-300)/2 at the time. Though the weekend has been further adjusted upwards since.

 

[BrianLo]

If we want to be more specific, so that I’m not mis-quoted in the future as ever having said the marketing budget was 25M, here’s my rough predictions. Acknowledging I don’t really know the final endpoint.

Production costs - 100
Marketing - 140
Residuals - 40
Interest and overhead - 25
Participation - 25

Television and Streaming - 175-200
Home Entertainment - 125
Box Office ~500 (from 1B of box office)



I also think Stitch is a huge success no matter how you cut it - and all this semantics about it needing to make up money for other productions is moving more goalposts.

 

[TP2000]

If we want to be more specific, so that I’m not mis-quoted in the future as ever having said the marketing budget was 25M, here’s my rough predictions. Acknowledging I don’t really know the final endpoint.

Thank you! This should be fun, at least for me during my nightcap...

Production costs - 100

Yup!

Marketing - 140

How do you figure? Variety says they only spent $100 Million on global marketing for Lilo & Stitch.

Residuals - 40

Uh... I've heard that phrase before, but have no idea what it means in a financial sense. Should I Google?

Interest and overhead - 25

Okay, I at least know what that is: Bank fees and interest on loans, plus the cost of chair massages and Sushi chefs and free Tesla chargers for Burbank's cubicle drones.

Participation - 25

What is that? And don't tell me I get a trophy for that. I'm too old for that trophy crap.

Television and Streaming - 175-200

Okay, so now I guess we're into financial gains? The estimated future profit from streaming rentals into 2030, right?

Home Entertainment - 125

How does that differ from streaming? It's a big number, so what is it and how is it different than the above?

Box Office ~500 (from 1B of box office)

Check! That pencils out for me. Although, Lilo & Stitch could over index on that because it's strong domestically, but not that hot overseas. The domestic box office is more profitable at about 60% of the take, on average.

I also think Stitch is a huge success no matter how you cut it - and all this semantics about it needing to make up money for other productions is moving more goalposts.

I would agree that it's a huge success. Burbank needed this. That it was farmed out to an outside group over the hill from Burbank and thus done for the relatively cheap cost of $100 Million makes it even better.

The issue of making up for the losses incurred thus far in '25, mostly from the historical bomb and financial sinkhole of Snow White, is just a side thread as we near the halfway point of the year. We'll want to tally it all up six months from now, naturally.

 

[TP2000]

I probably could have prevented 12 posts if TP knew I didn’t use 25% but 50%.

Sorry that was not clear!

No worries, I'm sure it's not your fault. I'm likely to blame as much as anyone as I skimmed and caught up on this thread randomly for 20 or 30 minutes at a time over the long holiday weekend, while salads chilled and coals heated up and I tried to remember if the next event was Adults Only for my sanity.

If you are okay with the traditional 50% of the production budget going to marketing, instead of somehow amortizing that over some unknown number of years into the future and thus pegging the marketing costs as only 25% of production now, that works for me.

I fully get it, Disney is marketing these movies to cement them into pop culture memory banks so they get streamed and rented for years into the future. But that doesn't erase the fact they spent that marketing budget now in 2025 while the things were in actual theaters. Like studios have done since before they added sound in 1927.

That said, for the past few years on Disney's ridiculously huge, bloated budgets, I would generally cap the marketing budget at $100 Million no matter what the production budget was. For example, Snow White cost them $270 Million (that we know of so far), but I only pegged their marketing at $100 Million instead of $135 for accounting purposes. The exceptions are when reputable sources quote the marketing spend as higher than 50% of production, like Variety has done for the $140 Million spent on The Little Mermaid or the $100 Million spent on Lilo & Stitch.

 

[TP2000]

Random Thought Post-Nightcap; That little girl who they cast as Lilo is adorable! I've only seen her in the ads obviously, but she's spot on perfect for the live action remake and a total sweetheart! What a cutie!

I put a few snarky comments above about children crashing some Memorial Day events, so I feel a little guilty. But I really do like children, especially when they are safely on a movie screen and can't smear their grimy hands on things I own or interrupt my sometimes-impure dinner party conversation with their innocent thoughts and comments.

The little Hawaiian girl they cast as Lilo is truly adorable!

 

[Nevermore525]

Television and Streaming - 175-200
Home Entertainment - 125

How does that differ from streaming? It's a big number, so what is it and how is it different than the above?

TV and Streaming is just revenue from licensing to TV channels to air or various streaming services.

Home entertainment is digital/physical sales of the film. So any collector type or someone who still buys dvds or someone who buys a digital copy of the movie instead of watching it on a streaming service.

 

[DisneyHead123]

When you look at Lilo & Stitch compared to recent live action tentpoles, it's overseas box office is much weaker than it should be compared to its relatively strong domestic take thus far. Based on its holiday weekend haul in the USA of $182 Million, it should have done at least $225 Million overseas as of yesterday. On its way to an overseas total of at least $600 or $700 Million, to bolster the $500+ Million it will likely do in the USA.

Instead, it has only made $178 Million overseas so far.

Now that I think of it, I wonder if Memorial Day being a US holiday had an impact. It would have been an average two day weekend in May for most of the world, not typically prime moviegoing time.

 

[BlindChow]

Now that I think of it, I wonder if Memorial Day being a US holiday had an impact. It would have been an average two day weekend in May for most of the world, not typically prime moviegoing time.

Lilo hasn't yet been released in Japan, which is a huge market for Stitch, so that will have deflated the total somewhat.

Also, according to Deadline, Tom Cruise is still a big deal in East Asian markets, like Korea. They speculated that a big Mission Impossible opening might have limited the both the number of theaters and number of moviegoers for Lilo & Stitch, at least for this past weekend.

 

[DisneyHead123]

Lilo hasn't yet been released in Japan, which is a huge market for Stitch, so that will have deflated the total somewhat.

Also, according to Deadline, Tom Cruise is still a big deal in East Asian markets, like Korea. They speculated that a big Mission Impossible opening might have limited the both the number of theaters and number of moviegoers for Lilo & Stitch, at least for this past weekend.

Interesting. I’ll be curious to see if the international box office picks up moving forward.

 

[Tony the Tigger]

I predict Mufasa-esque legs for Stitch.

There is still a hate campaign for this one. It’s all over facebook. Can’t really say why without a minor spoiler about the ending, but suffice to say it involves a lot of pearl clutching and woke accusations.

They just look for it everywhere now. Especially Disney movies. Any character who is not a cretin is now “woke” because they don’t know what that word means.

 

[Ayla]

OK, we saw it. We enjoyed it. Neither of us had seen the original, so we had no preconceived notions. We thought Lilo was adorable, and a good actress for her age. The cgi was quite good.

I had no idea Stitch’s backstory, etc.

Thought it might be a little funnier. Got choked up near the end. Definitely cared about the characters, which definitely doesn’t always happen. I’d see a sequel, and on the suggestion (insistence?) of @Tiggerish I’m going to watch the original (probably on my own.)

So, we liked it. It made me finally like Stitch after all these years. It wasn’t earth shattering, but did remind me of some fun 70’s-80’s movies “for kids” like Escape From Witch Mountain and the like.

The theater - we took our chances. It was about 2/3 full. Most of them were families with a bunch of kids. I knew that was a possibility going in.

I couldn’t believe: every single one of them all talked through the entire movie. They were half paying attention, walking around. Someone tried to shush them at one point, to no avail. I decided to draw on my “big brother brain” where you can block out the voices of little kids.

Why do people think this is acceptable? I can’t imagine going to the movies with my mother as a kid - and talking through the film. She would never allow that. It’s mind-boggling.

Side note: for whatever reason (glitch) the AMC app would not allow me to complete my purchase with points. Further, there was a convenience fee of about $4.50. Two tickets ended up costing $38 and change. That’s a lot just to see a movie. If we upgrade our Stubbs account to a higher level for $18, it would eliminate the fee. Should have done it. Was in a hurry, and was annoyed that our current membership level didn’t remove that fee anymore.

The film is definitely worth watching.

Welcome to today's parenting.

 

[BrianLo]

How do you figure? Variety says they only spent $100 Million on global marketing for Lilo & Stitch.

So far. As I’ve mentioned it’s elastic and they’ll keep spending for success. “Come out and see America’s number one movie”. I’d be surprised if this one’s marketing campaign is not elastic. Which is why I’m actually not calculating marketing when I’m running profit. It’s not a fixed variable, but a correlation that starts at 50% as a floor and accelerates towards success.

Residuals and participation are back end deals that continue to pay out as the film builds.

Tv, home entertainment also include things like video rental services. That are often a little underestimated. Think for example airlines.

As for 2030, not really, content is amortized in an accelerated fashion. A large chunk will occur in the first year(s). But a “licensing” deal is a deal. If the film unit doesn’t recover it quick enough, interest will eat away at it.

I’m not in favor of unreasonable time frames, but largely what we are getting report from Deadline on is the reasonable “first run deal” shelf life of our discussion.

 

[Nevermore525]

Lilo and Stitch will be the fastest to hit $200M Domestically so far for 2025 hitting that mark today at some point.

A Minecraft Movie got to that mark on Day 7

 

[Disney Analyst]

Hollywood tale as old as time. Studios including Disney have always released many modest success, modest losses, big bombs, and HUGE mega hits.

That's why the industry is so fickle, and sometimes like a lottery. Especially these days with an unpredictable audience that can make any film that may usually be a sleeper, into a viral hit.

 

[TP2000]

Lilo and Stitch will be the fastest to hit $200M Domestically so far for 2025 hitting that mark today at some point.

A Minecraft Movie got to that mark on Day 7

Well, true. But Minecraft didn't open on a holiday weekend. The domestic box office for Minecraft was stronger than Lilo & Stitch over its first weekend, until Memorial Day Monday hit for Lilo & Stitch which allowed it to pull ahead.

The first Monday for Minecraft was April 7th, a random Monday in spring.

I dunno know, gang. That overseas box office for Lilo & Stitch that is notably underperforming the domestic box office seems real to me. Despite Japan being the one nation that doesn't get Stitch until next week. Lilo & Stitch is going to need really strong legs domestically to make up for the weak overseas box office thus far.

We won't know more on its legs until this next weekend is past, however.

 

[Animaniac93-98]

Hollywood tale as old as time. Studios including Disney have always released many modest success, modest losses, big bombs, and HUGE mega hits.

That's why the industry is so fickle, and sometimes like a lottery. Especially these days with an unpredictable audience that can make any film that may usually be a sleeper, into a viral hit.

Expect Disney's film strategy for the last 15 years is to rely entirely on tentpoles, which makes the bombs and hits more extreme and raises the threshold for profitability.

They've gotten away with this because they have 1-2 titles/year on average that make up for the rest.

 

[DKampy]

zzzua?c

Expect Disney's film strategy for the last 15 years is to rely entirely on tentpoles, which makes the bombs and hits more extreme and raises the threshold for profitability.

They've gotten away with this because they have 1-2 titles/year on average that make up for the rest.

not really when you include Searchlight snd 20th century