What is there left to say about John Carter? Yes, it had a disastrous $30 million opening domestically. Yes, it was beat out by The Lorax, which was in its second week of release. Yes, it made a bunch of money overseas. Yes, it will probably impact Disney’s bottom line [March 12th update: Brooks Barnes of The New York Times has written a detailed article that delves thoroughly into the business side of this story.] Here is what appeared in Disney’s most recent earnings report, from the quarter ending December 31, 2011:
Studio Entertainment revenues decreased 16% to $1.6 billion and segment operating income increased 10% to $413 million. The revenue decline was driven by fewer Disney branded titles in wide theatrical release in the current quarter along with an adverse impact from the timing of title availabilities in television markets and lower DVD volumes. Higher operating income was primarily due to an increase in worldwide theatrical results and lower film cost write-downs, partially offset by decreases in television distribution and worldwide home entertainment results. Improved worldwide theatrical results reflected the benefit of lower distribution and marketing costs and production cost amortization which more than offset the revenue decline due to fewer Disney branded films in wide theatrical release.
If I’m understanding this correctly, net studio profits (which includes television) increased 10% while overall studio revenues decreased 16% from the previous year. Confusing, right? In other words, Disney doesn’t make a lot of movies anymore, and is consequently making less money from their studio division, but overall expenses have gone down, allowing for more net gains. And, like every other major studio, losses in DVD revenue are being offset by gains in overseas box office.
Disney seems to be arguing that by not making as many movies, they have saved money, simply due to the fact that it costs less to make fewer films. Now, I’m not an analyst (nor am I a shareholder), so I won’t to try to parse the language in the report, but it does point to a potential long-term issue for Disney. As a cost-cutting measure, they prefer to spend a ton of money on only a handful of movies, in hopes that their two or three $200-plus million projects each year will be hits. See any potential flaws with that strategy?
By the way, what are we talking about when we refer to Disney movies? This appears on the first page of the earnings report:
“We’re off to a good start in this fiscal year executing on our ongoing strategy, deriving greater value from our brands — Disney, Pixar, Marvel, ESPN and ABC — in the U.S. and around the globe,” said Disney President and CEO Robert A. Iger.
The movies released under the Disney banner are now divided into three brands: Disney (Buena Vista Pictures), Pixar, and Marvel. But how different are these brands from one another? That’s a key question going forward.
For nearly twenty years, Pixar has distinguished itself as not simply the inventors of the computer animated feature film, but the company most invested in maintaining a level of quality and a mastery of storytelling second to none. But their winning streak was never going to last forever, and, eventually, other animation studios began to catch up. All things being equal, a Pixar movie is probably a better bet for kids than a Dreamworks Animation movie. But that outcome is no longer certain. Ever since Disney’s $7-plus billion acquisition of Pixar in 2006, there have been several sequels to some of Pixar’s most popular titles, with more in the works, diluting the Pixar brand by making it seem less about story and more about the bottom line. Toy Story got a third sequel, Cars begot the extremely unmemorable Cars 2, and soon Monsters, Inc. will get into the sequel act as well. At the same time, the creative stars of the Pixar family, including John Lasseter, Brad Bird, and Andrew Stanton, have all sort of moved on. Sure, they’ll return to make more Pixar movies in the future, but their departures have muddied Pixar’s immediate prospects.
This June, a lot will be riding on Brave, and not just because there will be, for the first time in Pixar’s history, a female character in the lead role. The question on everyone’s mind will be: is the Pixar name still a guarantee of exceptional, heartfelt storytelling? Are Pixar movies intrinsically superior to the myriad of animated films coming out of Dreamworks, Fox, and Universal?
According to Box Office Mojo, there are only seven releases left on Disney’s schedule for the remainder of this year. Seven.
The Odd Life of Timothy Green
Finding Nemo (in 3D)
Chimpanzee is another nature movie for Imax screens, Brave is the Pixar release, and Finding Nemo in 3D is a rerelease. That essentially leaves four movies left to talk about. There’s Frankenweenie, the stop motion, black and white Tim Burton project in the fall, based on one of his most famous short films; there’s Wreck-It Ralph, a non-Pixar computer animated movie coming out during the holidays (about video game characters who mingle together in an arcade — which has absolutely nothing in common with Toy Story, no matter what your gut might tell you); there’s The Odd Life of Timothy Green, the family-friendly picture set for release in August; and there’s The Avengers.
We know that Disney can handle the animated projects, but what about the live action releases? It’s not always easy to take a live action movie seriously once it’s been branded with the Disney name.
The Odd Life of Timothy Green was written and directed by Peter Hedges, who made the indie dramedy Dan in Real Life with Steve Carell. If it had been made for a different studio, or independently, Timothy Green might have stood a chance of being, at the very least, quirky, but everyone knows that whatever originality or rough edges a story like that might have delivered under different circumstances will have been wiped clean and smoothed out by the folks at Disney. Disney is not really a studio per se — it’s a brand. And nothing can be permitted to tarnish it. There can’t be an R-rated movie, or sex, profanity, gratuitous violence, horror, etc. The list goes on and on. So this Timothy Green movie, about a couple who can’t have a kid of their own and then wake up to discover that their fantasy version of a little boy has sprouted up out of the dirt in their backyard, cannot, almost by definition, be the type of honest, personal project that it was clearly crying out to be.
That leaves The Avengers. Here’s where it gets really interesting. When Disney bought Marvel Entertainment for over $4 billion in 2009, they knew there were going to be problems with the deal.
Fox retains film rights to The X-Men, and Sony holds the live action feature rights to Spider-Man. So when Disney launches a new Spider-Man cartoon next month on its XD channel, promoting it every 15 minutes to impressionable young boys like my seven year old, those same boys will then ask their parents to take them to see Sony’s new Spider-Man movie in the summer.
But what about The Avengers? Will it too feel somehow like a Disney movie? Will it have any edge whatsoever? Will it have bite? Joss Whedon is an incredibly talented writer and TV series creator (he only has one other feature film, Serenity, under his belt), but what we can’t know until the film is released is whether or not Disney can pull off a smart, dangerous, violent, thrilling superhero movie. This remains an open, fascinating question. Contrast the widespread perception that Disney is a family brand with the tremendous latitude Warner Bros. has given to Chris Nolan on his Batman movies. Or try to imagine how the Harry Potter series would have evolved had it been a Disney property.
The latest Avengers trailer is pretty cool (this YouTube trailer is for the U.K. release, which is interestingly titled Avengers Assemble, likely because the Avengers name has a whole different frame of reference for the British),
but it makes no mention of Disney whatsoever. Marvel Entertainment is featured prominently, as is Paramount, but there’s no sign of Disney. Next year, I’m pretty sure Disney will still be partnering with Paramount on the Iron Man and Thor sequels, and the Iron Man franchise in particular will need to tap into some of the raw energy that made the first film so enjoyable if it hopes to remain relevant. But the Disney brand is not exactly synonymous with raw energy, and so it seems the parent company will try to keep a low profile.
The Avengers has a reported budget well north of $200 million. CGI doesn’t come cheap. For John Carter, with its budget anywhere in the neighborhood of $250 million to $300 million, not including advertising, Disney seems to have succeeded in imposing its notoriously strict brand standards on the material, draining it of the type of nerdy, dark, apocalyptic sensibility that might have appealed to a broader base of sci-fi fans. But if the folks at Disney were going to insist on a mainstream product, they might have chosen to trust a story as risky and expensive as this one to a producer such as Jerry Bruckheimer and a director such as Gore Verbinski, the two guys behind the first three Pirates movies. Bruckheimer and Verbinski have proven track records at Disney, and, with them at the helm, audiences would have been assured a good time. What’s more, what possessed Disney not to put a movie star in the lead role? I’m sure Taylor Kitsch will have a long career ahead of him (we can look forward — and I use that term loosely — to seeing him again this summer in Battleship), but how does a $250 million movie not get an established movie star in the lead? I know, I know, everyone will point to the example of Sam Worthington in Avatar, but James Cameron was the star of that movie, and as talented as Andrew Stanton has proven himself to be in his Pixar movies, he’s no James Cameron.
Could you imagine John Carter directed by Gore Verbinski and starring Johnny Depp? Of course you could. Would it have made three times as much money in its opening weekend? In all likelihood, yes. Anyway, we’ll find out indirectly next year, when Disney releases The Lone Ranger, produced by Bruckheimer, directed by Verbinski, and starring Johnny Depp.
In a way, John Carter‘s failure at the domestic box office this past weekend should be lamented. It was based on a much admired, if today somewhat obscure, series of novels by Edgar Rice Burroughs, the first of which appeared a hundred years ago. It wasn’t based on a Hasbro toy or a silly young adult flavor-the-the-week novel. It wasn’t a sequel. It wasn’t pre-sold in our imaginations. It had an outlandish, intriguing premise championed by a passionate director who, in Finding Nemo and WALL-E, displayed enormous reserves of sensitivity and depth.
The only problem is that, at its core, John Carter doesn’t want to be a Disney movie. Maybe that’s too harsh. But I’m not sure John Carter wants to be a $250 million action adventure either, regardless of which studio made it. It needed to be gritty and rebellious, not overproduced and hokey. While we’re certainly not past the era of the CGI blockbuster, what John Carter‘s poor domestic box office may have revealed is that American audiences may no longer be interested in CGI for CGI’s sake. Maybe we’ll still watch characters we already know pointlessly battle monsters and aliens in a CGI universe, but we won’t automatically surrender our $13 bucks (3D surcharge) for an unfamiliar CGI experience that we fear may not have enough plot and character development to justify the onslaught of visual eye candy. It’s sort of like Mitt Romney’s primary season experience: he can outspend his opponents, but he can’t force anyone to vote for him. And that’s kind of what happened here. If history is any guide, John Carter can expect to earn around $80 to $90 million in the States, based on its $30 million opening weekend take. That’s a pretty low number, given its budget and Disney’s much criticized but nonetheless extraordinarily expensive marketing push.
Disney did everything it could possibly do to get us to see their movie, short of paying for our tickets and driving us to the theater, and yet no one really bothered to show up in large enough number. Mathematically, it’s nearly impossible for a $250 million movie with such an enormous ad buy to recoup its losses if it only makes $80 million domestically. It would need to earn at least half a billion dollars overseas in order to break even, and that is somewhat unlikely (though not outside the realm of possibility). What is likely is that, when you read Disney’s next quarterly summary — which will include January, February, and March of this year — the studio operating income and overall revenues will have taken a hit. [March 13th update: How much of a hit? Disney will likely report a fourth huge write-down in the last three years, this time for up to $150 million, according to The Hollywood Reporter.]
The Disney game is about making a couple of movies each year that are somehow a lock to score at the box office. Spend whatever it takes to release two or three blockbusters every year, and then completely stay out of every other studio’s way when it comes to making inexpensive, smart, challenging films for grownups, or edgy R-rated stories that might appeal to teenagers or college kids. It’s a hell of a risky strategy, and it’s absolutely dependent on hitting a home run with audiences with each mega-budgeted title on their schedule. But in 2012, when most of the movies that have thus far made any money were budgeted at $30 million or less, and when receipts have been good enough for those films to break even or realize a decent profit for their distributors, it’s a strategy that has suddenly opened itself up to considerable, and perhaps unwanted, scrutiny.