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

[Tha Realest]

Poor Things is going to be outside the Top 10 this weekend, so there's no industry projection for what its take will be that I can see, but it did manage to skip past the pace of The Favourite last weekend, continuing to stretch its advantage day over day. It's remaining domestic success will largely be predicated on how many awards it manages to score in 3 weeks.

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Poor Things has more than 2x the budget of The Favourite, and not sure your chart accounts for the substantial increase in inflation over the last 6 years, so …

 

[Tha Realest]

Where’s the write down? Having an operating loss is not the same as taking a write down. For example they wrote down ~$190M for Lone Ranger back in 2013, but nothing recently. Btw, that was done by Rasulo, just as an aside.

The OP suggested there were not any real losses sustained for these films, which is demonstrably untrue.

 

[Disney Irish]

The OP suggested there were not any real losses sustained for these films, which is demonstrably untrue.

You missed the point. The reason why a film is written down by studios is to get a tax break in order to lessen the burden of the loss. This is only done when they can no longer make any money off the film as they have to adjust the value of the asset in order to take the write down. You don’t do that if the film has post-thearical revenue to earn.

So yeah they had an operating loss during those quarters for BO but they aren’t writing down the value of the films as they still get revenue from other sources post-theatrical, ie it’ll end up with a profit.

Perfect example of this is Batgirl, WBD wrote it down prior to release. As such it can’t be released ever otherwise WBD is on the hook for the full amount they wrote down.

 

[erasure fan1]

So yeah they had an operating loss during those quarters for BO but they aren’t writing down the value of the films as they still get revenue from other sources post-theatrical, ie it’ll end up with a profit.

Perfect example of this is Batgirl, WBD wrote it down prior to release. As such it can’t be released ever otherwise WBD is on the hook for the full amount they wrote down.

There's always money to be made post theatrical. Batgirl isn't really at all comparable in my opinion. That will never see the light of day. Disney wouldn't deep six wish, or any of the others, as while it didn't do well in theaters. Missed profitability by a whole lot. It will get views on D+, it will still sell some merch in the parks... So it still has a value to Disney. Batgirl, not so much. I won't pretend to know how studio tax financials work. But I would assume they can take a loss for that segment as a whole, and not have to Batgirl or willow stuff.

 

[brideck]

Poor Things has more than 2x the budget of The Favourite, and not sure your chart accounts for the substantial increase in inflation over the last 6 years, so …

I'm not sure I care about either of those things. I never once stated that Poor Things would make more of a profit than The Favourite. When I initially started posting versions of this chart, it was to combat the lunacy that the $2 million it made in its first two weekends was all the money it was ever going to see. Then people doubted that Oscar bumps were a thing, etc. etc. I'm sure you were here for the whole thing.

Now it serves as a convenient yardstick to show its trajectory towards undeniable profitability; if it exceeds The Favourite in the end and you assume roughly a 2x multiplier for overseas BO, then it's pretty much there. Despite all this, we continue to this day to have people making foolish posts about what a flop it is. Can't we just let a movie be both critically acclaimed and manage to not lose a pile of money at the same time and just call it good?

 

[DKampy]

I'm not sure I care about either of those things. I never once stated that Poor Things would make more of a profit than The Favourite. When I initially started posting versions of this chart, it was to combat the lunacy that the $2 million it made in its first two weekends was all the money it was ever going to see. Then people doubted that Oscar bumps were a thing, etc. etc. I'm sure you were here for the whole thing.

Now it serves as a convenient yardstick to show its trajectory towards undeniable profitability; if it exceeds The Favourite in the end and you assume roughly a 2x multiplier for overseas BO, then it's pretty much there. Despite all this, we continue to this day to have people making foolish posts about what a flop it is. Can't we just let a movie be both critically acclaimed and manage to not lose a pile of money at the same time and just call it good?

absolutely…I don’t have any doubts this is within Disney’s expectations when they first made the deal to distribute the directors next feature

 

[TP2000]

Or another way to look at it, notice how even though 2023 had almost all Disney movies said to have lost money…. Why has none of them been written down, ie reported on as a real financial loss in the quarterlies? It’s because none of them really were, all parties involved were made whole by post-theatrical revenue.

What you call "post-theatrical" revenue is business products often offered by Disney in their earning's reports referred to as "Direct-to-Consumer". And Direct-to-Consumer has been a mega-losing business for Disney for years now.

In Fiscal Year 2023, Disney lost $2.5 Billion (notice the letter B, please) on Direct-to-Consumer. During the first 90 days of Fiscal Year 2024 they lost another $138 Million on Direct-to-Consumer. On top of the hundreds of millions they lost at the traditional box office.

They have been reported as financial losses in quarterlies. Since 2022.

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And in the earning's call last week for Quarter 1 of Fiscal '24, they reported the following losses for those 90 days;

Studios = $224 Million Loss
Direct-to-Consumer = $138 Million Loss

When a $200 Million movie flops at the box office and loses a hundred million or more for Disney during a fiscal quarter, they don't magically make a profit off that loss by losing another hundred million or more streaming that same box office flop on Disney+ during the following fiscal quarter.

https://thewaltdisneycompany.com/app/uploads/2024/02/q1-fy24-earnings.pdf

 

[Indy_UK]

Let's remember that Wish Most Watched Trailer! issue the next time we get gushing media hype for Disney's next thing.

And that’s what I fear will happen with Inside Out 2 too

 

[_caleb]

What you call "post-theatrical" revenue is business products often offered by Disney in their earning's reports referred to as "Direct-to-Consumer".

Not exactly. "Post-theatrical" would include some things that are not "direct-to-consumer." These typically involve getting money from middle-men, who then make money by screening the film for their own customers. Many of these are drying up as major sources of revenue, but they include:

1. Home Entertainment: DVDs, Blu-rays, and digital downloads/rentals through iTunes, Amazon Prime Video, Google Play, etc.
2. Streaming Services: Licensing deals with non-Disney streaming platforms such as Netflix, Amazon Prime Video, and a bunch you've probably never heard of.
3. Television Syndication: licensing to linear networks for broadcast, either on cable channels or through syndication deals with local stations.
4. Merchandising: toys, clothing, video games, board games, gifts, decor, etc.
5. International Distribution: released in theaters in other countries after its initial run.
6. Ancillary Markets: Airline, cruise ships, hotel screenings, educational screenings, and other non-traditional distribution channels.
7. On-Demand Services, Pay-per-view: On-demand rental or purchase through cable and satellite providers.
8. Licensing and Royalties: Revenue can also come from licensing the movie for use in other media, such as YouTube videos, music samples, books, or stage adaptations.
9. Releases in Other Formats: IMAX, 3D, special editions, etc.

Direct-to-Consumer, on the other hand, is when there's no middle man, and Disney sells a film directly to the consumer. Disney is working to develop this as a business in Disney+, Hulu, ESPN, etc., and did invest boatloads of money into it as they work to make it a profitable and sustainable business.

Disney+ is on track to become profitable this year as they continue to reduce spending, raise prices, and sell ads, and they've yet to roll out additional services like games, gambling, and shopping, etc. that are sure to bring in a lot of revenue.

 

[Advisable Joseph]

But I have to believe that if movies were doing great through the other channels, the studios would be bragging about it.

There is much value in streaming movies, especially children's animation.

I know this sounds kind of old-fashioned, but since Nielsen has been tracking streaming, eight of the top 10 movies ever streamed are all animated features. That’s by viewing hours, so there’s a lot of repeat watching going into it, but it adds a ton of value. There’s plenty of appetite for more than the few films a year that we’re currently doing.

Netflix Will Increase Its Animated Feature Spend In 2024 Following Successes Of Films Like 'Leo,' 'The Sea Beast'

"There’s plenty of appetite for more than the few films a year that we’re currently doing," said Netflix co-CEO Ted Sarandos.

www.cartoonbrew.com

And more context: “We want to beat Disney in family animation”: Netflix co-CEO Reed Hastings reveals in a recent interview.

And their income is obviously mostly from streaming.

Also, recall that Disney+ pays Pixar and WDAS for their movies, to make the accounting work right. Disney's business units have to pay each other so the books can show where the money came from correctly. Just because Disney+ is recording losses doesn't mean the movies aren't making money from it.

 

[Disney Irish]

There's always money to be made post theatrical. Batgirl isn't really at all comparable in my opinion. That will never see the light of day. Disney wouldn't deep six wish, or any of the others, as while it didn't do well in theaters. Missed profitability by a whole lot. It will get views on D+, it will still sell some merch in the parks... So it still has a value to Disney. Batgirl, not so much. I won't pretend to know how studio tax financials work. But I would assume they can take a loss for that segment as a whole, and not have to Batgirl or willow stuff.

With Batgirl that was a tax scheme used by WBD to lower their debt burden post-merger. It could have found money, I don't believe for a second that it was so bad that it could never make any money so can't see the light of day.

I gave an example from Disney, which was the ~190M write down of Lone Ranger. Disney decided they couldn't make enough post-theatrical on the movie so they wrote down the value of the movie in order to lower their debt burden. Had DTC or the other post-theatrical revenue streams that exist today been around 11 years ago I'm pretty sure Disney wouldn't have written it down.

Anyways the point was that the unknown post-theatrical doesn't have more visibility because studios don't want to have to share more of the pie through profit sharing.

 

[Disney Irish]

What you call "post-theatrical" revenue is business products often offered by Disney in their earning's reports referred to as "Direct-to-Consumer". And Direct-to-Consumer has been a mega-losing business for Disney for years now.

In Fiscal Year 2023, Disney lost $2.5 Billion (notice the letter B, please) on Direct-to-Consumer. During the first 90 days of Fiscal Year 2024 they lost another $138 Million on Direct-to-Consumer. On top of the hundreds of millions they lost at the traditional box office.



And in the earning's call last week for Quarter 1 of Fiscal '24, they reported the following losses for those 90 days;

Studios = $224 Million Loss
Direct-to-Consumer = $138 Million Loss

When a $200 Million movie flops at the box office and loses a hundred million or more for Disney during a fiscal quarter, they don't magically make a profit off that loss by losing another hundred million or more streaming that same box office flop on Disney+ during the following fiscal quarter.

https://thewaltdisneycompany.com/app/uploads/2024/02/q1-fy24-earnings.pdf

I know exactly what its called, and no its not.

As @_caleb broke it down DTC is just one piece of the post-theatrical revenue stream, but its not the entire thing. DPEP for example though Parks and merch and other stuff is all part of the post-theatrical. As Parks licenses the characters from Studios for things like the M&Gs and other Parks marketing, which then translates to money from guest via merch sales (which is another post-theatrical revenue stream) and the like. So that licensing is counting toward the movie via both the Parks and the merch deal, and so is the merch sale itself, all are part of the post-theatrical revenue stream.

If Disney can see a way to make money post-theatrical they will bleed every last dollar out of it. This is the synergy machine that is the Disney Company.

Also for all your touting of losses you keep missing that DTC has been losing less and less as time goes on. Its on track to be profitable in FY24, heck I wouldn't be surprised if its not profitable next quarter or very close to it.

 

[Tha Realest]

Does the three line summary in the quarterlies typically break down which films, if any, they take a write down on? That doesn’t seem to be the case.

 

[Disney Irish]

Does the three line summary in the quarterlies typically break down which films, if any, they take a write down on? That doesn’t seem to be the case.

Yes, just as does any impairment charge they take for any asset, such as they did last summer for $1.5B in content savings for removing shows from D+.

 

[TP2000]

Poor Things is going to be outside the Top 10 this weekend, so there's no industry projection for what its take will be that I can see, but it did manage to skip past the pace of The Favourite last weekend, continuing to stretch its advantage day over day. It's remaining domestic success will largely be predicated on how many awards it manages to score in 3 weeks.

View attachment 768909

Poor Things has more than 2x the budget of The Favourite, and not sure your chart accounts for the substantial increase in inflation over the last 6 years, so …

The Numbers website has a nifty toggle switch feature to adjust budgets and box office for inflation.

I've never heard of The Favourite, but it apparently came out in 2018 according to The Numbers. Here is the comparison of its box office with Poor Things, adjusted for the accelerated inflation of 2021-2024.

Movie Comparison: Poor Things (2023) vs. The Favourite (2018)

Domestic box office comparison between Poor Things (2023) and The Favourite (2018)

www.the-numbers.com

 

[TP2000]

Box Office estimate first pass is out for this holiday weekend through Sunday. I am struck by the staying power and "legs" of family films Wonka and Migration over two months after their debuts! Migration in particular, owing to its modest production budget of $72 Million it is now bringing in $15 Million and counting in profit for Universal.

The performance of Wonka and Migration two months later seems to prove there's a very strong market for family films that parents can take their children to. Why did mega-hyped Wish not meet that market's needs to celebrate Disney's 100th?

Poor Things is in 13th place this weekend and its theater count is now at 680.

Down in 21st place in its second weekend in 1,560 theaters is Turning Red. Was this employee morale boost worth it?

And finally this weekend, All Of Us Strangers and Wish are still in theaters. Oof.

The Numbers - Weekend Box Office Chart for August 2, 2024

Weekend Domestic Box Office Chart for the weekend of August 2, 2024

www.the-numbers.com

 

[Miss Rori]

Wonka and Migration are playing like most of the Renaissance-era Disney animations did over 1989-92, which ran into spring at first-run multiplexes. For that matter, Frozen ran and ran that way too. I'm sure Disney thought Wish was going to have similar legs, but the word of mouth just. wasn't. there. It wasn't a movie people recommended to their friends, and the 100th anniversary just wasn't enough of a hook. (That, and Wish looked comparatively "girly", possibly turning off families with boys.)

 

[LittleBuford]

(That, and Wish looked comparatively "girly", possibly turning off families with boys.)

How did it look "girly"?

 

[Miss Rori]

The ads showed a princess-looking character in a fairy tale community befriending a wishing star and singing and playing with magic wands and talking animals. No hint of big action scenes, or epic adventure, or humor beyond cutesy star and goat hijinks, and the only significant human male character was the bad guy. (Even Beauty and the Beast had an ad that focused on the slapstick battle between the Objects and the mob to piggyback on Home Alone's popularity!) And virtually all the merchandise was clearly aimed at girls.

 

[LittleBuford]

The ads showed a princess-looking character in a fairy tale community befriending a wishing star and singing and playing with magic wands and talking animals. No hint of big action scenes, or epic adventure, or humor beyond cutesy star and goat hijinks, and the only significant human male character was the bad guy. (Even Beauty and the Beast had an ad that focused on the slapstick battle between the Objects and the mob to piggyback on Home Alone's popularity!) And virtually all the merchandise was clearly aimed at girls.

I’m not sure how it’s any girlier than other Disney films that went on to do very well. And the merch was dominated by Valentino and Star, neither of whom seem aimed at any gender in particular.