Just a few years ago, Disney was enjoying tremendous success, commanding a significant portion of the market and producing multiple films that earned either close to or over a billion dollars annually. They held the reins of colossal franchises like Pixar, Star Wars, and Marvel, which generated massive profits. In addition, Avatar: The Way of Water, released last year, secured its place as the third highest-grossing movie in history.
Disney’s “All Tentpoles” Strategy Is Not Working as Expected
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More money, more problems for Disney.
Just a few years ago, Disney was enjoying tremendous success, commanding a significant portion of the market and producing multiple films that earned either close to or over a billion dollars annually. They held the reins of colossal franchises like Pixar, Star Wars, and Marvel, which generated massive profits. In addition, Avatar: The Way of Water, released last year, secured its place as the third highest-grossing movie in history.
However, this year has presented challenges for Disney. Their latest animated film from Pixar, Elemental, is struggling to perform well at the box office. Furthermore, there is no Star Wars movie released, and Marvel’s Ant-Man: Quantumania encountered a difficult start. Despite Disney still having some highly anticipated titles set to be released later this year, they are facing the prospect of experiencing their first year without a billion-dollar movie at the box office since 2014, excluding the COVID-19-impacted years of 2021 and 2022.
How Did We Get Here?
Well, Disney has been pushing a tentpole strategy for a while. These movies cost around $200 million to make and more to market. That means, conservatively, they need to make around $400 million to actually bring a profit back to the studio.
During a certain period, things were going smoothly. However, the post-COVID-19 era has brought about significant changes in the industry, altering the entire landscape.
Audiences are no longer purchasing movie tickets as frequently as they used to. Disney’s former CEO, Bob Chapek, further complicated matters by announcing that most of their films would be available on streaming platforms shortly after their theatrical release. This approach fails to incentivize people to venture out to cinemas when they already have access to these films from the comfort of their homes through a subscription service.
Overall, the box office has experienced a decline of approximately 20 percent, impacting every studio in the industry.
Furthermore, China, which was once a lucrative market for Hollywood films, has now become more restrictive in accepting foreign features. Consequently, studios cannot rely as heavily on international sales from China. If a movie fails to resonate with international audiences, its financial success will primarily depend on its domestic box office performance. This situation holds true for writer/director Greta Gerwig’s highly-anticipated film, Barbie.
But Disney is the one who really focused in on tentpoles, and if receipts continue crashing they’re going to need to reevaluate.
How Can We Fix This Situation?
Disney has the potential to alter their strategy by reintroducing the production of three or four mid-budget movies per year. These films would not carry the same level of pressure as their blockbuster counterparts, allowing for more creative risks within the market.
In the past, Disney successfully released movies like Herbie and The Parent Trap, which were star-driven family films and remakes of their ’60s classics. These movies required less financial investment to produce. Even if they didn’t become massive hits, they still managed to turn a profit due to their appeal to families seeking PG-rated entertainment.
Currently, there seems to be a gap in the market for such films, with no major player filling that specific niche. However, Disney is well-positioned for success in this area. They possess a vast catalog of beloved properties and could even support original concepts if they chose to do so. By tapping into this potential, Disney could diversify their offerings and capture a different segment of the audience.
Hollywood is changing incredibly fast, so maybe these trends will break or steer a different direction.
We’ll let you know as it plays out.
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