In “Inside Out 2” from Disney and Pixar, joy, sadness, anger, fear and disgust meet new emotions.
Disney | Pixar
Disney wants to bring a little joy to theaters with the upcoming release of Pixar’s “Inside Out 2.”
Current expectations are for the animated sequel to easily top $85 million in its domestic premiere this weekend, which would make it the highest debut of any film released in the U.S. and Canada in 2024. Some even predict the film could gross more than $100 million in ticket sales, a feat not seen since July 2023 Warner Bros.’ “Barbie” came into theaters.
“Inside Out 2” has already grossed $13 million in Thursday night previews in North America. By comparison, 2019’s “Toy Story 4” brought in $12 million in Thursday previews and $120.9 million in its opening weekend.
Any opening above $50 million would be a boon for Pixar, which has struggled to regain its footing at the box office in the wake of the pandemic. However, Disney seems confident about “Inside Out 2” as the film is expected to run for 100 days in theaters, which is almost unheard of for animated features and non-blockbuster action films these days.
While most consumers are agnostic about theatrical release windows – the period of weeks or months during which a film is shown exclusively in theaters before hitting streaming or other on-demand options – for cinema operators and box office analysts, a commitment of Requiring more than three months of exclusivity on the big screen is a big deal.
Before the pandemic, the industry standard was the so-called 90-day theatrical window (although the average was actually closer to around 75 days, according to market research firm The Numbers).
Only a select few films would make it past this date – usually major franchise films or blockbuster hits. After this period, a film could enter the home video realm, which includes digital downloads, DVD and Blu-Ray discs, and availability on streaming sites. The films would still be in theaters after that date, but would then compete with sales in the home market.
When the pandemic hit and theaters were forced to close, studios had to decide whether to hold off releasing their films until theaters reopened or offer them on streaming or video-on-demand in the meantime.
Disney was among the companies that chose to make a number of their animation offerings available to the home market during this period.
As theaters reopened, studios renegotiated the length of time films had to remain on the big screen before they could enter the domestic market. After all, new Covid variants and a vaccine that was not yet widely available meant that many cinemagoers stayed at home. The result was a very different time frame for exclusivity, as each studio negotiated its own contract with the major cinema chains.
For example, Universal and Focus Features signed a deal that required films to run in theaters for at least three weekends or 17 days before they could be transferred to premium video-on-demand platforms.
“Ninety-day windows were always going to be unsustainable,” said Jeff Kaufman, senior vice president of film and marketing for Malco Theaters. “The pandemic kind of accelerated that.”
The changing cinema windows present studios and cinemas with a complex equation.
A shorter window
Studios were pushing to shrink the time slot before the pandemic to reduce marketing spending, said Daniel Loria, senior vice president of content strategy and editorial director at the box office company.
Studios paid a significant amount of money to market films for theatrical release, and then months later had to create a buzz again to get a film into the domestic market. With shorter time frames, studios don’t have to spend as much to reacquaint audiences with a film, since it’s likely to be remembered fresh from its debut.
“My impression of the upcoming films [premium video on-demand] “Early on, it’s usually a decision not to double marketing spend,” Loria said.
According to The Numbers, the average running time of a widely released film last year was 39 days. So far, the average duration in 2024 is 29 days. As larger blockbuster titles come onto the market in the summer months, this number will of course increase.
Average theatrical window from a major Hollywood studio in 2023
- Focus Features – 28 days
- Lionsgate – 30 days
- Universal – 30.8 days
- Warner Bros. – 30.9 days
- Paramount – 42.5 days
- Sony – 47.75 days
- 20th Century Fox – 60 days
- Searchlight – 60 days
- Disney – 62 days
Source: The Numbers
There are cases where studios have extended their runs well beyond the typical theatrical window. In 2022, for example, “Top Gun: Maverick” from Paramount and Skydance ran in theaters for more than 200 days before heading to the home market.
And these numbers only refer to when a film becomes available for rental in the domestic market. Typically, the wait time for movies to become available on subscription streaming services, which are often viewed as “free” by those subscribers, is much longer.
The Numbers reported that the average time between theatrical release and streaming subscription start in 2023 was 108 days.
Early on, there were experiments with daily releases, which meant films were released in theaters and streamed at the same time. However, this faded as studios realized that these simultaneous releases were cannibalizing sales and leading to increased piracy rates.
There is also the consideration that many actors and directors have contractual terms that guarantee them a percentage of the theater revenue. In 2021, actress Scarlet Johannson sued Disney over its simultaneous streaming and theatrical release of the 2020 Marvel film Black Widow. She claimed that her agreement with the company guaranteed an exclusive theatrical release of her solo film and that her salary was based in large part on box office performance. Johannson and Disney later agreed for an undisclosed sum of money.
Still, Universal has dabbled in the day-and-date model for horror films centered around Halloween, recently opting to release Five Nights at Freddy’s simultaneously in theaters and on streamer Peacock. While the film had a stellar opening weekend, grossing over $80 million at the domestic box office, ticket sales fell more than 76% in its second weekend, reaching just $19 million.
Of course, shorter exclusivity and lower ticket sales can be bad for theater chains that are still struggling to get their operations back on track post-COVID. However, some argue that having the window wrong can also be bad for the film.
“A sufficient time window is important not only for exhibitors, but also for our studio partners, as it is necessary to reap the full advertising and financial benefits of a film’s theatrical release, which significantly increase the lifetime value of a film across all distribution channels Streaming” said Sean Gamble, President and CEO of Cinemark.
Disney’s dilemma
That’s a lesson Disney has learned during the pandemic.
Both Walt Disney Animation and Pixar struggled to regain their footing at the box office as pandemic restrictions eased and audiences returned to theaters. Much of this was due to Disney choosing to release a handful of animated films directly to the Disney+ streaming service during theater closures and even after theaters reopened.
The company wanted to fill the company’s fledgling streaming service with content, overload its creative teams and send feature films straight to digital.
This dynamic led parents to seek out new Disney titles via streaming rather than in theaters, even as Disney opted to bring its films back to the big screen.
Because of these and other challenges, no Disney animated film from Pixar or Walt Disney Animation has grossed more than $480 million at the global box office since 2019. For comparison, just before the pandemic, “Coco” grossed $796 million worldwide, “Incredibles 2” grossed $1.24 billion worldwide, and “Toy Story 4” grossed $1.07 billion worldwide .
Box office experts view “Inside Out 2” as a barometer for Pixar’s health and future. If the film can capture audience attention and perform well in its opening weekend and beyond, the animation studios will regain favor with audiences and the industry.
Latest results from Pixar’s domestic opening weekend
- “Elemental” (2023) – $29.6 million
- “Lightyear” (2022) – $50.5 million
- “Turning Red” (2022) – streaming release
- “Luca” (2021) – streaming release
- “Soul” (2020) – streaming release
- “Onward” (2020)* – $39.1 million
- “Toy Story 4” (2019) – $120.9 million
- “Incredibles 2” (2018) – $182.6 million
* “Onward” was released just as Covid cases were surging in the US and theaters were beginning to close.
Source: The Numbers
A 100-day window for “Inside Out 2” could be key.
According to Sebastian Gomez, a research and data analyst at The Numbers, Disney is one of the few studios that doesn’t have a traditional premium video-on-demand window. That means once the theatrical window opens, it will head to Disney+, where subscribers can watch it for free instead of using a sub-rental option.
By delaying the home release, Disney is signaling to audiences that the latest Pixar release is a “must see” on the big screen.
The first “Inside Out” film, released in 2015, grossed $90.4 million in its opening weekend and has grossed more than $850 million at the global box office.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
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2024-06-14 18:37:20
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