THB #264: Holiday Mythmaking @ The Box Office

There are two lines of myth making happening around the box office this weekend. First, there is the Glass Onion saga and then there is the Strange World demise.

I’ll start with Strange World, since I wrote about the state of Glass Onion going into the weekend on Friday.

Disney under Chapek & Daniels has had a major animation problem.

Chapek officially became CEO at Disney on February 25, 2020. Onward was an unusually unclear Pixar release on March 6, 2020. It opened to $39 million. Can’t blame Chapek for that… or for COVID.

Since then:
December 2020 - Soul (D+ dom - $121m int)
March 2021 - Raya and the Last Dragon ($55m dom - $75m int)
June 2021 - Luca (D+ dom - $55m int)
November 2021 - Encanto ($96m dom - $161 int)
March 2022 - Turning Red (D+ dom - $20m int)
June 2022 - Lightyear ($118 dom - $108m int)
November 2022 - Strange World ($19m dom opening - $9m int opening)

That’s $288 million domestic and $549 million international.

BUT COVID!!!! Families are afraid to go to the movies because of COVID! Let’s keep blaming COVID for everything! COVID ate my homework! COVID messed up our international release strategy for D+! COVID COVID COVID!!!

I couldn’t actually have been more irritated today as when I read repeatedly that the disastrous release of Strange World was to be blamed on COVID.

Amazingly, Universal has, like Disney, had 7 animated releases since COVID happened.

April 2020 - Trolls World Tour ($450k dom - $49m int)
November 2020 - The Croods: A New Age ($59m dom - $160m int)
June 2021 - Spirit Untamed - ($18m dom - $25m int)
July 2021 - The Boss Baby 2 ($57m dom - $90m int)
December 2021 - Sing 2 - ($163m dom - $244m int)
April 2022 - The Bad Guys - ($97m dom - $153m int)
July 2022 - Minons 2 - ($369m dom - $569m int)

That’s $764 million domestic and $1.29 billion international.

I guess the new leader in animation is Universal, with their Illumination and Dreamworks Animation brands.

Is this when some of you try to convince yourself that Encanto’s Thanksgiving opening last year should have done about the same number as The Bad Guys did this spring? And that #1 worldwide album with multiple worldwide #1 singles was managed well… that wouldn’t have driven box office, only popularity on streaming… right?

You are, simply, wrong. Encanto was every bit the opportunity that the original Frozen was. You could argue 25% less because of COVID and Omnicron… maybe. But even that is a reach. There is a way that Disney has sold their summer and Thanksgiving animated movies for year after year, to great successs and the occassional failure. Not only did Disney back away from those successful traditions, they treated their animated treasures like filler.

There is always the fallback that no one can ever know, so let’s agree to disagree. But anyone who really looks at the box office can see opporunities missed. Soul happened in the heat of the scariest times of COVID. I don’t think it was the right call, but I get it. I can rationalize it. Some would say that Sing 2 underperformed. (I would likely agree.) But it did 70% more than Encanto domestically, released within a month of one another… and didn’t have a single hit song, much less two #1 worldwide smashes.

You want to argue degree, I can’t really fight it off. But the claims about Disney’s animated failures under Chapek are extreme, not marginal. There is no fight to have.

I haven’t even seen Strange World because of my frustratingly direct relationship with COVID in the last couple weeks. But as I complained since 2 months before the release of Encanto that Disney was not putting in the resources they have traditionally put into selling their animated films. I saw the same with Strange World, but even worse. At least Encanto had a central character who was prominent in all the materials. At least there were hints at the musical to come. I still don’t know what the hell Strange World is about, aside from adventurers and weird gummy creatures. The only thing Disney really used to sell this movie was colorful images and big graphics.

And for what it’s worth, Lightyear was a more interesting movie than they sold too… and perhaps that is why it underperformed as well.

I’m not even getting into the seeming misogyny of barely releasing Encanto (then getting lucky a month later… which would have been an explosive boon had the film still been in theaters, like Spider-Man) and then Turning Red.

People can twist and turn all they like, there is NO rational argument that the market for family movies is still stuck in COVID mode. Had Strange World opened to 10% less than the uninspired opening of Encanto, okay… maybe… but still a stretch. But when a Disney animated film can’t launch to more than $20 million on a 5-day Thanksgiving weekend (or $12m for the 3-day), keep your lame excuses to yourself. Time to look in the mirror. Universal is the fairest of them all right now. And it’s not just that they have worked for it and have sequels. Disney, you have undercut the entire segment for years. No one else to blame.

So…

We got reported numbers on Glass Onion. “Reported.” They were whispered to Deadline and, I assume, the rest of the trades, which reported these whispers in various ways.

Deadline - “Glass Onion: A Knives Out Mystery from Netflix continues to tower over adult fare with $3.6M on Friday (+91% over its Thanksgiving) and $3.5M on Saturday, per industry sources”

Nice numbers. Congratulations.

Thing is, the numbers themselves mean absolutely nothing. Proves nothing. Nothing bad. Nothing particularly good. No lasting impact.

The only reason the numbers were whispered to the trades is because they seem positive - they are - and the only real purpose of this whole exercise seems to be publicity for the Oscar run, publicity to keep Wall St happy, and to please Rian Johnson and future filmmakers who might see this kind of weird pseudo-release as attractive.

If the movie actually makes the Netflix-projected $15 million in this week-long stunt, it may bring in $6 million in rentals… which it is probably about $4 million - $9 million less than Netflix’s ad spend for the stunt.

After Netflix failed to place other films in AMC and Regal in the past because they refused to spend on marketing - and agreed to spend more like exhibitors wanted this time - Netflix has floated the claim this weekend that “the streamer kick(ed) in 4x the amount of money toward exhibitors’ marketing for the sequel than a regular studio does on an average title,” which may be true in some technical way, but not by the smell test. My guess is that the “4x” somehow manipulates the fact that most movies have runs of at least 4 weekends and Netflix agreed to spend a similar amount on this 1-week run.

I have nothing against Netflix. I have nothing against Glass Onion. I adore Rian Johnson and his work.

Maybe I am wrong, but my understanding was that trade papers saw themselves as journalistic organizations and not just marketing apparatus for the highest bidders. So maybe do a little journalism?

Let’s do the math. If Netflix did this for 3 more weeks, with this alleged $15 million a week take as the best possible scenario, that would be $60 million. In the case of how Netflix is doing this, it would bring about $24 million back to Netflix. At an added cost of, say, $5 million a week to support the next 3 weeks in theater, that might come close to covering the advertising costs.

So, it’s not really in Netflix’s interest to extend the theatrical. They would be, in fact, working against their own interest with that choice. And there is every reason to believe that the box office would drop. Even if it was just 20% a week, the box office total would be about $45 million, returning about $18 million to Netflix. That would not cover the marketing. Netflix is in this for streaming.

Now… a real theatrical for Glass Onion would surely do $150 million domestic, if not more, and another $150 million internationally. That would leave Netflix with a March/April opening on Netflix of a $300 million-plus worldwide hit and put the cost of the Pay-1 Forever streaming cost at around $100 million instead of $200 million, as it is now. Probably less.

That is the value in the successful execution of a 2-window system.

The short game doesn’t offer it. Even when it goes really well, as it seems to have this week. The economies of scale work against the short window too hard.

This is less true for, say, Universal, which releases a wide array of films without the expectation that they will all succeed. We can debate - and we will - how short the windows should or should not be. But they have built an ecosystem for their product. And the problems they have building Peacock are really a separate issue, not a gaping wound hoping to ease its pain by putting Universal out of its core game.

The treachery of allowing ourselves to get sucked into the instant gratification of one moment, one experiment, one stunt… it skews reality. It does not lead to truth. It does not lead to solutions.

In this, I think these two stories share some space. I believe Chapek and Daniel came to believe that the magic of planting the seed and letting the flower grow was too risky. Sure bets only! Likewise, there are very legitimate concerns with Netflix starting to spend cash on theatrical releases because it adds a lot of cost and risk that they don’t face inside their specific ecosystem.

The movie business is a gambler’s field. It’s not widgets. It’s not for the fearful.

Netflix is in the TV business, which can actually be more risk averse and work great.

But movies are big swings. Little in the way of safety nets.

I’m not saying you have to be in it. But if you are in it… be in it… or you are wasting your time.

Until tomorrow…