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

[brideck]

Poor Things continues to spend the last week of '23 down in 12th place. Even with its small $35 Million production budget, it looks like it's going to lose at least $25 Million for Searchlight.

Poor Things continues to be on track to make ~$30 million domestically (given its expected legs and awards bounce) and has yet to open overseas. It'll be interesting to see how it does elsewhere. The Favourite got a particularly big boost in the UK (a third of its international take), which makes sense as it was about a British royal. This one doesn't have the same ready-made hook.

 

[erasure fan1]

It will be interesting to see if there will be a churn this next year or not. Particularly with this year's releases and only Inside Out 2 as the big family release not until June in theaters.

I'll be churning for at least the first half of the year. There's not a lot coming, and with, like you said, such a weak theater slate I don't see all that much happening till the 2nd half of 24. So yea, I'm curious as well if their lack of output will hurt them. I don't see it making a huge impact, but I could see numbers run flat for a while.

 

[MarvelCharacterNerd]

It is important to not create a double negative in the thought experiment. Products are still remunerated according to the rates that Disney would be able to achieve through former licensing deals. There is still cash inflow, about 16 billion worth at D+ generated last year.

The short term view is that Disney could pay itself 60 million for a dud like Strange World (with long term owning the pipeline that will be profitable), or it can get 60 from Netflix to do so. But why would Netflix be willing to pay? Because it has metrics for what things are worth. (For reference an actual popular movie would be licensed for 150-200 million). Strange World did poorly, but it was also still paid out by the internal service at a lower rate, as it would have been at an external service.

Cancelling D+ short-term erases the pipelines loses, but it also erases the subscriber revenue in the process. Short term Disney is behind, but they are also creating a modest Netflix rival from scratch. Long term they want to own the content AND a profit generating pipeline (as Netflix currently has achieved). Long term they will have created a 'modest' Netflix internally from scratch without paying another company (?60-100 billion) dollars to acquire one. Though they partially did that with Hulu to the tune of 20 billion and counting.



Domestically they currently average 7.50 a month per subscriber and Internationally 6.10 USD per subscriber. These figures are reflective of Q3 the recent price hikes will still play out over a couple more quarters due to annual subscribers. This is known as ARPU and they report this in financial statements.



As above. Slightly old from Q2 but I think this is the cleanest visual summary for what you are asking.

Yellow is what they pay to make the content or pay to 'acquire' the content from the theatrical releases. It is the majority of the costs. Green would be for marketing or launching D+ itself into new markets (i.e. billboards for D+ content or the service, sizzle reels, media presence). Orange is actual structural costs like staffing, infrastructure.

View attachment 760890


To answer your original question they are actually quite close (0.7 loss above dates back to Q2; it was further improved last quarter). I have hypothesized the service is currently profitable, with the very clear understanding that financial reporting is going to be behind that. The recent subscriber price hikes happened mid way or late into Q1 depending on the market. So Q1 may still report a loss as an average of the 3 months, even if December started breaking even. I think Q2 will report a profit.

The other major positive tailwind is most of the cost savings from the strikes won't really be occurring until 2024/5 as Disney+ doesn't report production spend until the program actually lands on the service - and even then it is depreciated over a couple years. So none of the lack of spend on production for 9 months has been realized. With slowing releases now becoming more evident in 2024 that will start to manifest and then be amortized over a couple years at lower rates.

Yes, I'm aware of ARPU. I'm just making the point that if streamers continue to raise prices to the point where people cancel, so they have to aggressively discount to get them back, they're losing money already on the table, which is just poor business. aka I'd've continued paying $50/year without ever considering dropping it. Now I'm looking harder at the value and not finding it there due to the lack of content spend to save money AND the strikes completely throwing off the production pipeline that also feeds the service. So I'm paying $24 instead, which sets a new value for the service and the content in my head going forward. When this deal runs out, why would I want to pay more? When previously I would've paid twice that without question. THEY made me question it by overcharging with a ridiculous fee raise and now, potentially undercharging, and devaluing themselves and their product in the process. My mental math was: one new movie or series a month that I wanted to watch was worth $5-$6/month. But if they don't even offer that - why is it worth more than $2/month? Granted, the 2025 releases should be more than 2024, so I'll rethink my math at the end of next year accordingly.

Disney+ isn't alone in this, for reference. I signed up for Paramount+ for $2/month for up to 3 months. When I went to cancel it at the one month mark after I'd binged everything I wanted, they offered me two months free. So of course I took it, then struggled to find anything worth watching that I hadn't already. Thus proving my point that streamers regularly overcharging for what they actually have to offer, then having to stupidly discount is... not a long term good business proposition, IMO.

 

[BrianLo]

Yes, I'm aware of ARPU. I'm just making the point that if streamers continue to raise prices to the point where people cancel, so they have to aggressively discount to get them back, they're losing money already on the table, which is just poor business. aka I'd've continued paying $50/year without ever considering dropping it. Now I'm looking harder at the value and not finding it there due to the lack of content spend to save money AND the strikes completely throwing off the production pipeline that also feeds the service. So I'm paying $24 instead, which sets a new value for the service and the content in my head going forward. When this deal runs out, why would I want to pay more? When previously I would've paid twice that without question. THEY made me question it by overcharging with a ridiculous fee raise and now, potentially undercharging, and devaluing themselves and their product in the process. My mental math was: one new movie or series a month that I wanted to watch was worth $5-$6/month. But if they don't even offer that - why is it worth more than $2/month? Granted, the 2025 releases should be more than 2024, so I'll rethink my math at the end of next year accordingly.

Disney+ isn't alone in this, for reference. I signed up for Paramount+ for $2/month for up to 3 months. When I went to cancel it at the one month mark after I'd binged everything I wanted, they offered me two months free. So of course I took it, then struggled to find anything worth watching that I hadn't already. Thus proving my point that streamers regularly overcharging for what they actually have to offer, then having to stupidly discount is... not a long term good business proposition, IMO.

I do see your perspective. Though it's important to note that the ad version Disney technically makes more off you in a month than they used to when you paid them more money. You are on the perception of a greatly discounted plan. Even if you don't engage in ads whatsoever, Dis still collects the ad revenue for you regardless. It's the advertisers that are sort of getting ripped off in your case.

I think the problem is streaming as a landscape came in wildly undercharging and it's been hard to unwind that perception for consumers. You are paying less now (not even accounting for inflation) annually than the cost of a VHS in the 90's. Some of this is Netflix's fault. Some is Disney for really undercharging from the get go for the service.

 

[DKampy]

It's a Sunday, so The Numbers site releases an estimate for today so they can show the weekend box office. Here's where things are estimated to stand by the time the clock hits 2024 tonight at Midnight.

Wish is about to be beaten at the box office by Migration, after already being handily beaten by Trolls. Both the Trolls and Miagration movie had production budgets less than half that of Wish. In the case of Migration the budget was almost one third of Wish. Ouch.

Poor Things continues to spend the last week of '23 down in 12th place. Even with its small $35 Million production budget, it looks like it's going to lose at least $25 Million for Searchlight.

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The Numbers - Daily Box Office Chart for Sunday December 22, 2024

Daily Domestic Box Office Chart for Sunday December 22, 2024

www.the-numbers.com

In regards to “Poor Things”
This is the type of legs his last movie “The Favorite” had

The Favourite

www.boxofficemojo.com

 

[brideck]

I think the problem is streaming as a landscape came in wildly undercharging and it's been hard to unwind that perception for consumers. You are paying less now (not even accounting for inflation) annually than the cost of a VHS in the 90's. Some of this is Netflix's fault. Some is Disney for really undercharging from the get go for the service.

1000x this. This is not directed at anyone in this forum in particular, but I will never understand how people think that $12 or $15/month is too much for any of the streaming services. I've always calibrated my sense of the value of entertainment to the cost of a movie ticket. Given the current average ticket price, that'd be about $6/hour of entertainment. Buying a $60 video game? I'm hoping I'll get at least 10 hours of fun out of it. Buying a $25 hardcover? Yeah, that should take me at least 4 hours to read. Buying a $12 CD? If I've listened to it even 3 or 4 times, I've gotten my money's worth.

So much of what's on the Internet works on such a different scale, it's silly. I only need to get 2 hours of entertainment out of a streaming service every month? And my whole family can enjoy it at the same time? What a bargain. There are more shows/games/whatever being created than ever before and everyone has somehow been convinced that everything should be a) always available to them and b) virtually free.

 

[brideck]

In regards to “Poor Things”
This is the type of legs his last movie “The Favorite” had

The Favourite

www.boxofficemojo.com

Yep, and Poor Things is tracking pretty much in line with it so far. I've created a somewhat unconventional comparison chart where the x-axis is the week/day of the year as opposed to day of release. I think it makes some amount of sense here because we should see the Oscar nomination bump, etc. happen at basically the same time near the end of January. The Favourite opened around Thanksgiving, so it's got about a $4 million head start on it. Poor Things would need to leg it out even deeper into April to surpass it in the end (which seems unlikely), or have even better holds/interest during awards season.

 

[DKampy]

Yep, and Poor Things is tracking pretty much in line with it so far. I've created a somewhat unconventional comparison chart where the x-axis is the week/day of the year as opposed to day of release. I think it makes some amount of sense here because we should see the Oscar nomination bump, etc. happen at basically the same time near the end of January. The Favourite opened around Thanksgiving, so it's got about a $4 million head start on it. Poor Things would need to leg it out even deeper into April to surpass it in the end (which seems unlikely), or have even better holds/interest during awards season.

View attachment 760983

Exactly… there is a reason why certain awards hopefuls are released when they are released… they don’t behave like your typical summer blockbuster…but I guess someone who does not even like movies knows better

 

[spacemt354]

I think the problem is streaming as a landscape came in wildly undercharging and it's been hard to unwind that perception for consumers. You are paying less now (not even accounting for inflation) annually than the cost of a VHS in the 90's. Some of this is Netflix's fault. Some is Disney for really undercharging from the get go for the service.

1000x this. This is not directed at anyone in this forum in particular, but I will never understand how people think that $12 or $15/month is too much for any of the streaming services.

I think he just answered this question above. It's the psychology of price raising, not that the higher price itself isn't worth it for the value you get in return.

If you're getting a subscription for free or at a discount for months, and then the price increases, you then reassess whether it fits into your lifestyle. And I think what has amplified these decisions is the streaming wars themselves. What started with a simple Netflix subscription ballooned into a myriad of options that mostly all undercharged their services to be competitive. And while a couple dollars a month to have more diverse options seemed reasonable, now charging what they probably should have from the beginning, causes a reflexive pause on whether its "worth it" anymore.

And for some households, while $12-15 per month for one service like Disney+ is reasonable, also having Peacock for X show, Max for Y show, and so on, can definitely add up where one has to decide which service is more valuable.

 

[brideck]

I think he just answered this question above. It's the psychology of price raising, not that the higher price itself isn't worth it for the value you get in return.

In my experience, the phenomenon of people talking about streaming being too expensive predates any of the price increases that we're talking about here. Apple TV+ started at what? $5/mo? And people balked at that price in my circles. I suppose you could make the argument that people are psychologically viewing every service that's not Netflix as a price increase over and above what they were originally paying for streaming, and if so, that's unfortunate for everyone's profitability.

 

[celluloid]

In my experience, the phenomenon of people talking about streaming being too expensive predates any of the price increases that we're talking about here. Apple TV+ started at what? $5/mo? And people balked at that price in my circles. I suppose you could make the argument that people are psychologically viewing every service that's not Netflix as a price increase over and above what they were originally paying for streaming, and if so, that's unfortunate for everyone's profitability.

Hard part is Netflix has most quantity by far and arguably quality than everyone else.

 

[spacemt354]

In my experience, the phenomenon of people talking about streaming being too expensive predates any of the price increases that we're talking about here. Apple TV+ started at what? $5/mo? And people balked at that price in my circles. I suppose you could make the argument that people are psychologically viewing every service that's not Netflix as a price increase over and above what they were originally paying for streaming, and if so, that's unfortunate for everyone's profitability.

$60 doesn't sound like a lot per year, but then one asks what is on Apple TV+ to justify the purchase given the vast library that is Netflix?

For some they may find great value in that, especially those late to the streaming game who perhaps don't have a built-in loyalty to Netflix and get hooked on a Ted Lasso, or something like that. But for others, it may feel like you are throwing away money when they already have a streaming service (or two or three) that they enjoy and get good use out of.

The pandemic certainly accelerated the streaming wars, but Paramount, Peacock, Apple, etc just don't have the library to compete with Netflix. Disney+ is the only one, in my opinion, that has a chance over the next 5 years to be sustainable if they don't sour their own built-in loyalty.

 

[Vegas Disney Fan]

1000x this. This is not directed at anyone in this forum in particular, but I will never understand how people think that $12 or $15/month is too much for any of the streaming services.

The problem is there’s a dozen services and more coming. We currently have Netflix, D+, Hulu, ESPN+, Prime, and iTunes... and we still have cable for sports and other things that aren’t on the streaming services we have. Between streaming, cable, and internet capable of keeping up with our dozens of connected devices we’re paying $300 a month for entertainment… and we still can’t watch everything we want becuase some is still on services we don’t have.

We have more entertainment than ever but it requires more subscriptions than ever to see it.

 

[celluloid]

The pandemic certainly accelerated the streaming wars, but Paramount, Peacock, Apple, etc just don't have the library to compete with Netflix. Disney+ is the only one, in my opinion, that has a chance over the next 5 years to be sustainable if they don't sour their own built-in loyalty.

That is what makes this brand rejection issue fairly interesting and troublesome in timing. They need the library and interest now.

Uni has had a great year, if their trust and relevance in family, horror and drama market keep up that will help peacock.
There is also have the Uni partnership with Netfllix DreamWorks that has helped the studio and their brand. Most kids today are raised on DreamWorks library of characters the way Disney Afternoon and sat morning toons raised prior generations.

 

[brideck]

The problem is there’s a dozen services and more coming. We currently have Netflix, D+, Hulu, ESPN+, Prime, and iTunes... and we still have cable for sports and other things that aren’t on the streaming services we have. Between streaming, cable, and internet capable of keeping up with our dozens of connected devices we’re paying $300 a month for entertainment… and we still can’t watch everything we want becuase some is still on services we don’t have.

We have more entertainment than ever but it requires more subscriptions than ever to see it.

I think I'm at ~$230/month, and that's with me paying rack rates for YTTV (cable), Netflix, Disney bundle, Apple TV+, Paramount+, Max, and Prime, plus my Gig Internet service (which I need in order to work anyway). By my previously stated metric, if we're getting ~40 hours of entertainment in a month out of all of that combined, then it's money well-spent.

If people don't have room in their budget for that much entertainment spending, perhaps they just don't get to watch "everything they want." Or they can be like TP2000 (and many others) and endlessly rotate services, if it's worth that extra work for the access and the savings.

 

[Disney Irish]

Since people are talking about streaming services and churning, lets look at the various services.

We'll see what happens over the course of the next year with price increases, but Disney+ and Hulu have the 2nd and 3rd lowest churn rate, only beaten by Netflix. So it seems that more subs tend to just stick with Disney+ and Hulu than drop it, at least currently.

Chart: Streaming Service Churn Rates

Most streaming services experience annual churn rates over 50% per year.

www.perfectrec.com

 

[celluloid]

1000x this. This is not directed at anyone in this forum in particular, but I will never understand how people think that $12 or $15/month is too much for any of the streaming services. I've always calibrated my sense of the value of entertainment to the cost of a movie ticket. Given the current average ticket price, that'd be about $6/hour of entertainment. Buying a $60 video game? I'm hoping I'll get at least 10 hours of fun out of it. Buying a $25 hardcover? Yeah, that should take me at least 4 hours to read. Buying a $12 CD? If I've listened to it even 3 or 4 times, I've gotten my money's worth.

So much of what's on the Internet works on such a different scale, it's silly. I only need to get 2 hours of entertainment out of a streaming service every month? And my whole family can enjoy it at the same time? What a bargain. There are more shows/games/whatever being created than ever before and everyone has somehow been convinced that everything should be a) always available to them and b) virtually free.

Competition and time changes things. Entertainment has certainly cheapened.

When flat screen tvs came out they were around 10 grand.

When Atari first had home entertainment systems and games the price of a system was today's equivalent of a grand or more.

No one is paying anything near that for top systems anymore.

Entertainment is being pumped out at a much higher volume with much more competition. VHS came from a generation where you owned a hard copy of that thing you were happy you could. Subscription as a service gives let's you watch from a library.

The 1980s to now are as far to now as the 1940s were to the 1980s. We can't think of entertainment prices to what was the norm then.

We old now.

 

[Animaniac93-98]

After 11 days of release Migration has made about 5x its opening weekend and will have out grossed Wish by end of day tomorrow.

It's now pacing similar to Puss in Boots 2, which by the end of its second weekend (12 days of release) was at $61 million.

 

[Animaniac93-98]

The Color Purple is estimated at $50 million after 8 days of release. It could make over $100 million by the end of its run.

When was the last time, if ever, 2 live-action musicals made over $100 million domestically in the same season? And from the same studio no less?

 

[celluloid]

After 11 days of release Migration has made about 5x its opening weekend and will have out grossed Wish by end of day tomorrow.

It's now pacing similar to Puss in Boots 2, which by the end of its second weekend (12 days of release) was at $61 million.

It also cost about half of Puss without franchise familiarity. It will be interesting to see how it plays as it will be the only family theatrical release for a bit with three day weekends on the way.

Aquaman 2, a movie that many were not stoked for and predicted as another superheor low starring a lady first world countries know she vengefully poops in the bed has already outgrossed The Marvels domestically and overseas