erasure fan1
Well-Known Member
Can you please show us where a studio takes home 100% of the box office? Because it is very well established that studios average about 50% of the box office. More in the first couple weeks, less there after.
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Disney's Live Action The Little Mermaid
- Thread starter NateD1226
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BrianLo
Well-Known Member
Well I'll frame it a different way for you then. Currently TLM is 118 on all time best domestic list at 280 million. 118 on the international list is 485 million for MI Ghost protocol yielding a worldwide gross of 765 million (and counting). So if the domestic performance is good and international is good... we have a 'good' number.
That does not change the fact it can be still disappointing or bad in context of extrinsic factors, like a runaway budget. Or studio performance expectations. But the hard domestic numbers are generally "good" and make a box office profit for almost any film.
Which is exactly why you are working so overtime trying to prove otherwise, because unfortunately the domestic number is good. Something can still be good and disappointing. Which is what you can see if you take my original comment in its full proper context. Nor does it take away the fact TLM International performance was bad and that's really where the film failed.
Tha Realest
Well-Known Member
Disney is building another theme park in Orlando - they just don’t know it yet. Their Hulu payout functionally subsidizes Comcast for Epic Universe (and then some).
MrPromey
Well-Known Member
Was this to me?
Asking because you're asking if people actually read the article you posted and I did. (in good faith)
To be clear, I'm not saying I don't trust media news. I'm just saying if you apply basic math, the numbers they lay out in the first two paragraphs of that article literally don't add up.
Am I wrong?
Do you not see the same $140 million hole in the figures they're presenting between the base level of break even and where they're saying they could lose $20 million?
I said it feels like the numbers are made up because what they said doesn't make sense. I'm not saying they're trying to misslead anyone - maybe there's just a typo in there, somewhere - but it doesn't seem like they know what they're talking about.
I mean, maybe where they said $400 million, they meant $500 million? it would still be off but it would be $100 million closer to lining up what they said in the first paragraph.
Looking at it objectively, do you feel different?
We're talking about Hollywood accounting, right? We're probably all wrong - and with that realization, I think I'm going to bow out of this discussion.
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Angel Ariel
Well-Known Member
What Disney movie is making people feel how awful they are for being average Americans?
MrPromey
Well-Known Member
BrianLo
Well-Known Member
The article is confusingly written - I admit. The problem is Anthony was spitballing a bunch of numbers very early into the run. But to answer your question later in the article it states "In a break-even scenario off a $560M global box office (meaning a net profit of $71M before participations and residuals are accounted for)"
So what his numbers are really saying is at 560 global box office receipts there is 71 million of profit (but a bit more will be eaten from that as is starts activating participation and residuals). At 400's it loses 20 million.
So your 140 million hole (actually 160 as Anthony is sort of comparing 560 to 400) is actually represented by a 90 million swing, which makes sense with how we know box office pays out to the Studio.
Break even was actually 450 for this movie and 500's has a healthy margin.
BrianLo
Well-Known Member
Disney+ pays out rentals. The entire Direct to Consumer wing is generating about 20 billion a year in revenues. It's the whole reason DTC is negative, because they DO pay themselves rentals for their content. It keeps the content profitable ultimately but runs the DTC enterprise currently negative.
It's why the Chapek regime was having a lot of issues. They were floating some of their movies entirely into D+ so the movies were breaking even but the content spend on the service itself was becoming untenable. The original structure was never to have D+ foot the entire bill. It also led to its legal battle with Scarlet as they were still making sure the movie was on paper profitable with the D+ receipts, but suppressing its actual potential to avoid residuals.
You are free to mentally discount D+ rentals if you really want. But then D+ is wildly profitable, technically. You cannot have it both ways and ignore the money from both ends.
A lot of the political advocates are gleeful that box office content is losing wild amounts of money and D+ is too. But the reality is the way it is structured is the movies are actually breaking even on paper because D+ is running the deficit. It's actually far more above board as far as Wall Street is concerned and they are going about it the proper way, in my opinion.
For the record two movies did fully lose money even with D+ subsidies. Strange World (200 mil) and Lightyear (100 mil). Most of which YouTubers are claiming beyond that is not reality.
Not that it will do much good, but:
‘Little Mermaid’ Swimming Against Strong Tides At Overseas Box Office, Leaving Break-Even In Question
In a rare situation for a Disney tentpole, particularly a live action title based on a treasured animated classic, 'The Little Mermaid' may lose money.deadline.com
Thank you, again.
MrPromey
Well-Known Member
Thank you for pointing that out but in those final numbers, he also says:
"The pic’s revenues broken down include $267M in global theatrical film rentals, $100M net in domestic pay/free TV and what Disney pays itself to put the movie on Disney+, $100M in global home entertainment (DVD, digital), and $80M in international TV and streaming."
If I'm understanding that right, the $267 Million in theatrical film rentals is what they make off theaters, right?
So really, he's saying the film gets to profitability once you factor in additional contracts including what Disney will pay to themselves to stream it and what they expect to make off DVD and digital.
That would seem perfectly believable to me.
The paying themselves part feels a little shady considering the situation with D+ and revenue there but I imagine that's more of a Hollywood thing than a Disney thing so I'm not going to hate the player, as it were - just to lament that if Disney+ was paying Disney Studios less for movies, maybe Disney Co. could afford to have a Yeti that works!*
Anyway, I really am out. I'm beyond my depth in this discussion, clearly but thank you for taking the time to help it make (a little) more sense.
*I know that math doesn't work which is the joke.
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BrianLo
Well-Known Member
Yes, you are exactly right. We've had a string of movies that are not classically profitable in the box office window. They are however in the rental, stream, DVD window. A lot of people seem to be implying it is shady, but that is how it works.
I think being shady would be to not play by Netflix rules and claim D+ is wildly profitable because the services pays 0 dollars for Avatar, Avengers and Marvel etc. theatrical films. I think that's why people struggle with why D+ numbers don't quite make sense, it's because "fortunately" A LOT more money than anyone is accounting for is propping up the content.
When and if D+ becomes profitable they are in a Goldie locks situation where they are both generating positive revenue from the streaming platform and basically ensuring the vast majority of their movies are purchased and paid for on the back end. That's the dream, Chapek and the Pandemic just took it way too far. The streaming platform cannot pick up the entire 300 million bill on a given Pixar movie. It can pick up a bit of the losses especially if the movies connect to audience on the platform and actually help the platform seem worth it. A movie like Elementals for example. (Or Soul, Luca, Turning Red). The biggest and best example is Encanto, which is wildly successful on the back end.
However not the likes of Strange World where barely anyone connected with it in either the theatrical, pay or stream windows. That's a true flop.
Andrew C
You know what's funny?
It also would have been successful on the front end if not for COVID. It only had a 30 day run in late 2021....
MrPromey
Well-Known Member
I only say shady because having D+ as a compulsory customer paying a rate that probably was not negotiated in the way a Netflix deal might have been feels like a way to move potential losses around within the company.
In this case, Disney has at least another five months until D+ has to start looking like it can be profitable so that's five more months where it could potentially be the studio's financial whipping boy if need be, no?
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BrianLo
Well-Known Member
Totally. Chapek and Iger are treated as the product of the same entity. But in this way I think Iger would not have exactly resulted the same strategies. We can see the missteps that were uniquely Chapek. The way he thought D+ would just exponentially grow if he just totally wrote off the importance of theatrical runs was one of his major Achilles heels.
Encanto should have had a full theatrical run and Turning Red also. Both found audiences and would have done a much better service to Elementals.
BrianLo
Well-Known Member
Yes, there is a very real situation with return to theatrical windows they start 'lying' and underpaying for their content. It's an a very interesting dilemma.
Though I think they are in part beholden to residuals and profit sharing. So we'd for sure see actor lawsuits if they started trying to do that. Wall Street would eat them alive.
Disney Irish
Premium Member
Incorrect, Disney is sending movies to PVOD services like iTunes first now instead of sending direct to D+.
So they are getting rentals and digital sales prior to sending to D+.
MrPromey
Well-Known Member
Actually, what I meant was possibly overpaying, currently.
Like, okay, if TLM makes over $500 million at the boxoffice, that's obviously a draw for any streamer and they don't care about the production and marketing costs or if the movie was profitable for Disney because they can make it profitable for themselves.
But what about all the Disney/Pixar COVID stuff? How much was any of that really worth? What would third parties have paid for that with it all being essentially unproven content?
Would Disney have even considered releasing that way to a third party or would they have sat on it all for 2-3 years? (I'm guessing the latter)
Was dumping all that Pixar onto D+ only about boosting D+ content (Pixar has been made out to be the victim in that deal) or could it also have been about making Pixar profitable while theaters were closed since those movies were making nobody any money sitting on hard drives unwatched?
I mean, Disney was still losing money but Pixar was making money off D+ and D+ was expected to lose Disney money for years, regardless of COVID so it seems like that would look to Wallstreet like acceptable loss by packaging/structuring it that way...
I need to go for a walk.
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BrianLo
Well-Known Member
Actually, what I meant was possibly overpaying, currently.
Like, okay, if TLM makes over $500 million at the boxoffice, that's obviously a draw for any streamer and they don't care about the production and marketing costs or if the movie was profitable for Disney because they can make it profitable for themselves.
But what about all the Disney/Pixar COVID stuff? How much was any of that really worth? What would third parties have paid for that with it all being essentially unproven?
Would Disney have even considered releasing that way to a third party or would they have sat on it all for 2-3 years? (I'm guessing the latter)
Was dumping all that Pixar onto D+ only about boosting D+ content or could it also have been about making Pixar profitable while theaters were closed since those movies were making nobody any money sitting on hard drives unwatched?
I mean, Disney was still losing money but Pixar was making money off D+ and D+ was expected to lose Disney money for years, regardless of COVID so...
I need to go for a walk.
Oh yes, I understand what you mean. There does seem to be some sort of value formula they are using to decide how much to pay. Likely with residuals maybe it is more baked into contracts. I anticipate Mermaid will get a respectable amount from the Core Service, because it did connect well with domestic audiences. It's a very streamable movie, musicals tend to get a lot of play.
lazyboy97o
Well-Known Member
Did you ever think it was shady when a movie had its broadcast premier on ABC? Or it’s cable premier on ABC Family or Disney Channel? Admittedly you don’t have the same sort of compulsory transaction but it’s still one part of the company paying another. ABC Family / Freeform had to pay to show summer box office dud Hocus Pocus over and over again on their channel which almost certainly helped make it into the pop culture item it is today.
Casper Gutman
Well-Known Member
Not to state the obvious, but this is the economic logic that underlies the entire studio system - not just the vertical integration of the classic system but the horizontal (and, increasingly, vertical again) integration of the post-90s system. The entire idea is that the price of blockbuster tent poles is defrayed by the fact that the same pricy content can feed multiple pipelines, all producing revenue. Of course, we aren’t even discussing some of the revenue streams a blockbuster (even an underperforming one) can produce - merchandising, music sales, theme park tickets, etc. All of this is baked into the planning of any film.
MrPromey
Well-Known Member
The compulsory part and the stage already being set for D+ to be a loser for the company, at least up to 2024 is what sets this apart, to me.
On the other side of the forum a bunch of us have been grumbling for years now about how it's been a money pit and how that seems to impact our favorite part of the company - how it "sponsors" a day at the parks, for instance, with money they are siphoning off the parks to help prop it up among other things...
But now it seems like at least a part of that "pit" could be a little bit of accounting sleight-of-hand, to me.
Maybe Netflix would have passed on She Hulk.
Did D+ have a choice?
They (Netflix) probably would have lapped up everything Star Wars good and bad but would they have been receptive to a series based on a single movie by the same studio that most younger people have never even heard of?
A series that only lasted six months before being pulled from streaming?
Doesn't matter because it got made and LFL got paid, right? (even if the talent might not see some of the residuals they were hopeful for)
Given this conversation, it seems like the potential for D+ losses (in the short term, only) may have been more of a potential opportunity for the company than a problem, especially given COVID.
Then again, I'm not discounting that I may be losing my mind.
I feel like this could be the plot of a movie if I can figure out how to get someone to die in the middle of all of this under suspicious circumstances.
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