Elemental (Pixar - June 2023)

[BrianLo]

Also, Turning Red in particular seems to be somewhat divisive.

I think Turning Red is actually under-recognized for its popularity. The divisiveness is more internet opinions than reality. That and Luca did quite well and stuck around in 2022.

Though Soul I think was a pandemic 'novelty' and Onward definitely got saved by the Pandemic fog. I agree it wasn't hot out of the gate and the Pandemic sort of gave it an easy out.

 

[Disney Analyst]

Pixar also had a studio branch in Vancouver until like 2013 as well. They were just doing shorts and I assume on the more expensive side. They were located in Gas Town, so I can't imagine cheap office space... though I've just learned ILM moved in after the acquisition.

In a fun fact moment, I got to visit it in 2012. There was something they were working on that I honestly have no idea what it was but never saw the light of day. Some sort of dark creatures/monsters that was distinctly un-Monsters Inc.

Right. ILM is here as is Disney animation now!

 

[Disney Irish]

All we know so far about Wish is the art type (2.5D animation) and the usual princess and talking animal buddy. People may do "a been there, done that before" and wait until Disney+ in February.

To me story beats out animation style every time. And if you have a bad or uninteresting take on the story you'll lose me.

However given this is Disney's first real attempt at the 2.5D animation style, plus a return to more "classic" Disney, I think more people will be interested in seeing it in theaters. But we shall see what happens in a couple months.

 

[WoundedDreamer]

So then is it possible that its not a brand issue but rather an audience that has been trained by the 4 pandemic releases to expect to see Pixar films on D+ instead of theaters?

Basically what I'm saying is that this idea that the Pixar "brand" is now persona non grata is a bit overblown in my opinion.

I'd definitely not argue Pixar is "persona non grata." That would suggest an active aversion to Pixar on the part of audiences. This change is characterized by apathy and not aversion.

I would say that the inherent trust and rapport Pixar developed with its audience has eroded. Pixar used to be like Apple. A company people felt passionate about. Pixar was more than a studio, it was a friend. Pixar still makes great films (though, not by box office performance metrics), but the passion is gone. Pixar of the 2000s and 2010s could release shockingly successful films about fish, monsters, waste disposal robots on dystopic planets, and homes carried aloft by balloons. The company was inexplicably successful because of excellent storytelling and a deep and passionate relationship with its audience.

People loved Pixar in a way that I still can't quite believe. I'm still stunned by it years later. It was special. Hit after hit. The meteoric rise of Pixar still leaves me in awe. Pixar itself is one of the greatest stories of all time!

Now, for whatever reason, this storied company can't even get people into movie theaters. That is tragic. Perhaps part of the problem is Pixar's absorption into The Walt Disney Company. It feels like Pixar's identity is getting diluted. And Pixar used to be the young and scrappy insurgent charging into battle against all the odds. Today, Pixar is the face of the establishment. The movies also are no longer "events." Pixar movies were cultural moments that adults, teenagers, and kids could share. Everyone could see Finding Nemo, The Incredibles, Up, and Toy Story 3. Elemental is not a movie that has anyone excited in a similar way.

There's also the John Lasseter issue... He, Catmull, and Jobs were Pixar's soul. Now they're all gone.

Ultimately, I just don't find the hypothesis that this is reflective of shifting consumer viewing habits to be a complete explanation. Not even close. The Mario movie proved that animated family films can storm the box office charts. People easily could have waited to see Mario in their homes, but they went out to experience it in theaters because they couldn't wait to make memories with their families and friends.

If this really is just an issue of people waiting to watch on Disney+, then Disney should make adjustments to their release strategy. But I doubt it's so simple. This seems like a more general malaise afflicting Pixar.

Well that is a different topic, and in my opinion the idea of the box office being the sole factor for a movies "success" is not only outdated, its overblown.

Many a movie over the years have been deemed not a success during its theatrical run but end up being successful post-theatrical.

And we're not talking cult movies, we're talking actual cinematic masterpieces -

Citizen Cane
Its a Wonderful Life
Cleopatra
Shawshank Redemption
Big Lewbowski
Fight Club

I honestly think we need to separate this idea of a film's success from the box office.

This is all well and good, but a film needs to be monetized. Box office results represent a key way for studios to recoup investments in their properties. Of course, the home entertainment market represents the other method of monetizing films. Unfortunately, The Walt Disney Company has embraced the massive overhead of running a streaming service. Simultaneously, Disney has decided to forgo the revenue it could have earned licensing to other services (remember the Netflix deal? good times...). Box office returns matter more in this context because other methods of monetizing the film are not in play (well merchandising, but I doubt Elemental is going to spawn a massive toy market like Cars or Toy Story). So the onus is on Disney films in this era to perform well at the box office.

And they aren't. So Disney is in the uncomfortable predicament of having to accept poor box office returns and high overhead in their streaming business. Not good.

 

[TP2000]

Based on what Pixar President Jim Morris says, it'll be profitable during its theatrical run.

I think you'd need to dramatically scale back the normal marketing spend to make Elemental profit during its box office run. Or get super creative with accounting and/or inter-departmental credits. Maybe a tax break for hiring a Canadian to voice the mom?

But if you pretend you spent hardly any money on marketing, which they may have done since being burned so badly by Lightyear and all their previous Disney+ debuts, you could maybe eke out a small profit at the box office? I did see several Elemental commercials on YouTube back in June, but maybe those are cheap? Or they used an old gift card to pay for them?

If you assume the normal (and very generous to the studio) 60/40 split of the box office for domestic/overseas takes from the theater chains, and then only spent $10 Million on marketing even though the movie cost you $200 Million to produce, you could earn a profit by Labor Day of maybe $1 Million? Fingers crossed?

Production $200 Million + Marketing $10 Million - $199 Million 60/40 Domestic/Overseas BO Take = $11 Million Loss As Of 8/9/23

 

[Disney Irish]

I think you'd need to dramatically scale back the normal marketing spend to make Elemental profit during its box office run. Or get super creative with accounting and/or inter-departmental credits. Maybe a tax break for hiring a Canadian to voice the mom?

But if you pretend you spent hardly any money on marketing, which they may have done since being burned so badly by Lightyear and all their previous Disney+ debuts, you could maybe eke out a small profit at the box office? I did see several Elemental commercials on YouTube back in June, but maybe those are cheap? Or they used an old gift card to pay for them?

If you assume the normal (and very generous to the studio) 60/40 split of the box office for domestic/overseas takes from the theater chains, and then only spent $10 Million on marketing even though the movie cost you $200 Million to produce, you could earn a profit by Labor Day of maybe $1 Million? Fingers crossed?

Production $200 Million + Marketing $10 Million - $199 Million 60/40 Domestic/Overseas BO Take = $11 Million Loss As Of 8/9/23

View attachment 736795

None of us here have the real production budgets, real marketing costs, or even the real box office breakdown, for any films for any studio, we have the "estimates".

As such sometimes we just have to accept that our "math" is not always going to be 100% accurate. Which is why the "rule of thumb" is not a end all be all for determining if a movie is profitable during theatrical. Its just a tool to tells the average of what films need to be profitable, but not all films fall into that average. Sometimes reported budgets are less or even more than estimated. Sometimes the marketing is less or even more than half the budget. Sometimes the breakdown of the box office splits are more or even less in the favor of the studio than the 60/40 average. So its all just an average for talking points, but its not necessarily the reality.

Also lets say your new "calculation" is more closer to correct, you do realize that under the "rule of thumb" that essentially puts it into break-even/profitability range now.

Basically we here are not the gatekeepers of whether a movie is profitable or not, it is the studio themselves that are the gate keepers. So yeah I'm going to end up believing the president of the studio over the math provided by mostly random posters on a Disney Fan Forum.

 

[Magenta Panther]

None of us here have the real production budgets, real marketing costs, or even the real box office breakdown, for any films for any studio, we have the "estimates".

As such sometimes we just have to accept that our "math" is not always going to be 100% accurate. Which is why the "rule of thumb" is not a end all be all for determining if a movie is profitable during theatrical. Its just a tool to tells the average of what films need to be profitable, but not all films fall into that average. Sometimes reported budgets are less or even more than estimated. Sometimes the marketing is less or even more than half the budget. Sometimes the breakdown of the box office splits are more or even less in the favor of the studio than the 60/40 average. So its all just an average for talking points, but its not necessarily the reality.

Also lets say your new "calculation" is more closer to correct, you do realize that under the "rule of thumb" that essentially puts it into break-even/profitability range now.

Basically we here are not the gatekeepers of whether a movie is profitable or not, it is the studio themselves that are the gate keepers. So yeah I'm going to end up believing the president of the studio over the math provided by mostly random posters on a Disney Fan Forum.

Well, let's hear what the president of the studio had to say about the recent spate of Disney films. From ClutchPoints.com:

During the Q3 earnings call, the Disney CEO (via IGN) said, “The studio has had a tremendous run over the last decade, perhaps the greatest run that any studio has ever had with multiple billion-dollar hits, and including, by the way, two that were relatively recent. One in particular, Avatar: The Way of Water and we also had a pretty strong performance with Guardians of the Galaxy 3, which I think has done approximately $850 million in global box office.”

He continued, “That said, the performance of some of our recent films has definitely been disappointing, and we don’t take that lightly. As you’d expect, we’re very focused on improving the quality and the performance of the films we’ve got coming out. That’s something that I’m working closely with the studio on. I’m personally committed to spending more time and attention on that as well.”

MSN

www.msn.com

Notice that he didn't say anything about Mermaid or Elemental being profitable. Which you'd think he would, if they were. Some here are still trying to argue that those flops (or "disappointments", if you like) will somehow recover, but nah. They're toast. And so it goes...

 

[celluloid]

He continued, “That said, the performance of some of our recent films has definitely been disappointing, and we don’t take that lightly. As you’d expect, we’re very focused on improving the quality and the performance of the films we’ve got coming out. That’s something that I’m working closely with the studio on. I’m personally committed to spending more time and attention on that as well.”

MSN

www.msn.com

He could have saved the company and him a lot of trouble if we here to visit the sets of some of the films and alter their course for quality.
He knows what movies are in the pipeline.

And can we honestly say that next year's line up of sequels and remakes are going to be drastically better?

 

[MisterPenguin]

Well, let's hear what the president of the studio had to say about the recent spate of Disney films. From ClutchPoints.com:

During the Q3 earnings call, the Disney CEO (via IGN) said, “The studio has had a tremendous run over the last decade, perhaps the greatest run that any studio has ever had with multiple billion-dollar hits, and including, by the way, two that were relatively recent. One in particular, Avatar: The Way of Water and we also had a pretty strong performance with Guardians of the Galaxy 3, which I think has done approximately $850 million in global box office.”

He continued, “That said, the performance of some of our recent films has definitely been disappointing, and we don’t take that lightly. As you’d expect, we’re very focused on improving the quality and the performance of the films we’ve got coming out. That’s something that I’m working closely with the studio on. I’m personally committed to spending more time and attention on that as well.”

MSN

www.msn.com

Notice that he didn't say anything about Mermaid or Elemental being profitable. Which you'd think he would, if they were. Some here are still trying to argue that those flops (or "disappointments", if you like) will somehow recover, but nah. They're toast. And so it goes...

So surprised he didn't mention the movies that haven't completed their theatrical run in this fourth quarter in a call that's all about the third quarter!!!!!!!

Keep trying!!!

 

[WoundedDreamer]

I think you'd need to dramatically scale back the normal marketing spend to make Elemental profit during its box office run. Or get super creative with accounting and/or inter-departmental credits. Maybe a tax break for hiring a Canadian to voice the mom?

But if you pretend you spent hardly any money on marketing, which they may have done since being burned so badly by Lightyear and all their previous Disney+ debuts, you could maybe eke out a small profit at the box office? I did see several Elemental commercials on YouTube back in June, but maybe those are cheap? Or they used an old gift card to pay for them?

If you assume the normal (and very generous to the studio) 60/40 split of the box office for domestic/overseas takes from the theater chains, and then only spent $10 Million on marketing even though the movie cost you $200 Million to produce, you could earn a profit by Labor Day of maybe $1 Million? Fingers crossed?

Production $200 Million + Marketing $10 Million - $199 Million 60/40 Domestic/Overseas BO Take = $11 Million Loss As Of 8/9/23

View attachment 736795

I agree with your sentiment. A family member of mine worked in government, and he said there was a saying in a certain government agency about finessing budgets. It went something like, "if you shake the cushions, you can always find a couple million dollars lying around." Disney can come up with creative ways to account for things to make a "profit." But it doesn't make the film successful or a worthwhile investment.

And there's another thing to consider. Econ 101 courses learn about the difference between "economic profit" and "accounting profit." Put simply, Disney is not looking to make a "profit" (this is called an accounting profit). Disney is looking to make an economic profit. The question we need to ask is if Disney could have spent the 200 million it invested into Elemental on something else and made more than it did on the film. The answer seems obvious. Disney would have been better off returning that money to its shareholders who could probably get better returns with it than they did.

 

[Disney Irish]

I'd definitely not argue Pixar is "persona non grata." That would suggest an active aversion to Pixar on the part of audiences. This change is characterized by apathy and not aversion.

I would say that the inherent trust and rapport Pixar developed with its audience has eroded. Pixar used to be like Apple. A company people felt passionate about. Pixar was more than a studio, it was a friend. Pixar still makes great films (though, not by box office performance metrics), but the passion is gone. Pixar of the 2000s and 2010s could release shockingly successful films about fish, monsters, waste disposal robots on dystopic planets, and homes carried aloft by balloons. The company was inexplicably successful because of excellent storytelling and a deep and passionate relationship with its audience.

People loved Pixar in a way that I still can't quite believe. I'm still stunned by it years later. It was special. Hit after hit. The meteoric rise of Pixar still leaves me in awe. Pixar itself is one of the greatest stories of all time!

Now, for whatever reason, this storied company can't even get people into movie theaters. That is tragic. Perhaps part of the problem is Pixar's absorption into The Walt Disney Company. It feels like Pixar's identity is getting diluted. And Pixar used to be the young and scrappy insurgent charging into battle against all the odds. Today, Pixar is the face of the establishment. The movies also are no longer "events." Pixar movies were cultural moments that adults, teenagers, and kids could share. Everyone could see Finding Nemo, The Incredibles, Up, and Toy Story 3. Elemental is not a movie that has anyone excited in a similar way.

There's also the John Lasseter issue... He, Catmull, and Jobs were Pixar's soul. Now they're all gone.

Ultimately, I just don't find the hypothesis that this is reflective of shifting consumer viewing habits to be a complete explanation. Not even close. The Mario movie proved that animated family films can storm the box office charts. People easily could have waited to see Mario in their homes, but they went out to experience it in theaters because they couldn't wait to make memories with their families and friends.

If this really is just an issue of people waiting to watch on Disney+, then Disney should make adjustments to their release strategy. But I doubt it's so simple. This seems like a more general malaise afflicting Pixar.

Its complex to be sure. But its just a bit too "easy" to say its just that people lost trust in Pixar. What does that even mean to the general public, and does it even apply to the majority? The thing is that too many here are putting their own feelings and pushing them onto the general public. Its fine if that is the way you feel, but don't speak for the general public, speak for yourself only giving an opinion for yourself.

So there isn't one factor here, its a multitude of factors, and to me streaming is the primary reason. Yes the 4 Pixar films released to D+ during the Pandemic got the raw end of the deal, but it is what it is. And even though Elemental didn't skyrocket at the box office, it shows that after the initial opening weekend movie goers started to realize that they wouldn't be able to see it on D+ right away, and so made a trip to the theater to see it. And hopefully Elio will be stronger at the box office, we'll just have to wait and see.

Also Pixar has been synonymous with Disney since the day Toy Story was released in 1995. So this idea that its "diluted" because Pixar is now part of Disney (something that has been the case for almost 20 years anyways) is not looking at the reality.

This is all well and good, but a film needs to be monetized. Box office results represent a key way for studios to recoup investments in their properties. Of course, the home entertainment market represents the other method of monetizing films. Unfortunately, The Walt Disney Company has embraced the massive overhead of running a streaming service. Simultaneously, Disney has decided to forgo the revenue it could have earned licensing to other services (remember the Netflix deal? good times...). Box office returns matter more in this context because other methods of monetizing the film are not in play (well merchandising, but I doubt Elemental is going to spawn a massive toy market like Cars or Toy Story). So the onus is on Disney films in this era to perform well at the box office.

And they aren't. So Disney is in the uncomfortable predicament of having to accept poor box office returns and high overhead in their streaming business. Not good.

The ways to monetize a film is in the process of changing due to technological shifts. The old idea of the box office being the sole primary monetization for a film is shifting. This is just the reality that everyone in Hollywood is accepting and facing, hence the current strikes in Hollywood. As with all other technological shifts that have happened over the more than 100 years of Hollywood, they will find a way to properly monetize it in the long run.

Also why is it that Netflix is ok to their own studios to create and push out their own content, while still being the streaming platform for other studios content, but its not ok for Disney to have an similar model? That argument just never makes sense to me. Somehow its cool for Netflix to do it, ie they can be profitable, but once another studio steps foot into the arena, "no don't do it because its not profitable" "you can't monetize it". Like somehow Netflix is magically able to do it but no other studios on the planet can replicate the same model. its just silly.

In the end its not up to us to worry about how Disney or any other studio is to monetize their content, that is for them to ultimately worry about. As long as they keep producing content that we can consume should we really care what delivery mechanism they use, I say no.

 

[Disney Irish]

I agree with your sentiment. A family member of mine worked in government, and he said there was a saying in a certain government agency about finessing budgets. It went something like, "if you shake the cushions, you can always find a couple million dollars lying around." Disney can come up with creative ways to account for things to make a "profit." But it doesn't make the film successful or a worthwhile investment.

And there's another thing to consider. Econ 101 courses learn about the difference between "economic profit" and "accounting profit." Put simply, Disney is not looking to make a "profit" (this is called an accounting profit). Disney is looking to make an economic profit. The question we need to ask is if Disney could have spent the 200 million it invested into Elemental on something else and made more than it did on the film. The answer seems obvious. Disney would have been better off returning that money to its shareholders who could probably get better returns with it than they did.

In Hollywood, this is called Hollywood math.

Disney of course can spend money on all sorts of things. Do we really want them to stop spending money on movies, because that is ultimately what you're saying. Stop spending money on movies and get better returns for shareholders means no more investments into any divisions especially the Parks. Is that what you really want? Because if you only want them to focus on shareholder return then its huge cost cutting (even more than before) to the core and no new investments so you can squeeze all your operational margins until there is no more to give. I mean there are already too many complaints by fans that they focus too much on the shareholders already.

No to me I don't think the shareholder should be the first priority, and I say this as a long time shareholder. So really I rather them take $200M swings and miss than the alternative.

 

[Tha Realest]

Notice that he didn't say anything about Mermaid or Elemental being profitable. Which you'd think he would, if they were. Some here are still trying to argue that those flops (or "disappointments", if you like) will somehow recover, but nah. They're toast. And so it goes...

That’s because fluffy corporate spin in a trade magazine is not actionable in a way that outright lies during an earnings call are.

 

[Tha Realest]

So surprised he didn't mention the movies that haven't completed their theatrical run in this fourth quarter in a call that's all about the third quarter!!!!!!!

Keep trying!!!

He did mention them though-

“He continued, “That said, the performance of some of our recent films has definitely been disappointing, and we don’t take that lightly. As you’d expect, we’re very focused on improving the quality and the performance of the films we’ve got coming out.”

 

[Disney Irish]

He did mention them though-

“He continued, “That said, the performance of some of our recent films has definitely been disappointing, and we don’t take that lightly. As you’d expect, we’re very focused on improving the quality and the performance of the films we’ve got coming out.”

Where in that is said specifically Elemental and/or Mermaid were the ones they were disappointed about?

It was just a generic statement about "some" recent films being disappointing, not all or even specific ones.

Check back next quarter and see if they call out any film by name as being disappointing or specifically a write-off.

 

[BrianLo]

I'm going to take a moderate approach here. Little Mermaid and Elemental were dissapointing. That doesn't mean they didn't break even. That doesn't mean the Pixar president shouldn't be pleased that Elementals actually somehow found an audience and groundswell. He should be pleased it was perceived as a good movie and eked out a profit where it almost assuredly was not going to based on opening day numbers. None of which Iger's going to highlight on the earnings call.

I didn't expect him to say "Avatar and Guardians were excellent", "Indiana Jones was a total unmitigated disaster", but "Elemental and Mermaid were disappointing to us though still made a few dollars". They are all just being painted with the unmentioned 'disappointing' brush as is the case where things aren't worth being highlighted as major money earners for the company.

The Pixar presidents commentary is far more nuanced and doesn't somehow get washed away by Iger's sheer lack of clarity on the matter. TLM and Elemental were of course disappointing in their potential and probably made money. I'm sorry a few people have such a hard time accepting both ideas in their head that they need to ignore fairly conclusive evidence from the horses mouth. Elemental I guess is on track to make money theatrically.

 

[MisterPenguin]

I'm going to take a moderate approach here.

 

[TsWade2]

Yoo hoo!

 

[BrianLo]

I think we missed this?

How Pixar’s 'Elemental' Kept Its Fire Burning at the Box Office - The Walt Disney Company

Pixar's 'Elemental' had a slow start at the box office, but has since found an audience crossing $400 million worldwide. Here's how.

thewaltdisneycompany.com

From the horses mouth after all.

 

[Phroobar]

I think we missed this?

How Pixar’s 'Elemental' Kept Its Fire Burning at the Box Office - The Walt Disney Company

Pixar's 'Elemental' had a slow start at the box office, but has since found an audience crossing $400 million worldwide. Here's how.

thewaltdisneycompany.com

From the horses mouth after all.

IT STILL LOST MONEY!