Is the Disney magic back?

Some people are saying so after Inside Out 2 proved to be a box office success story this past weekend. The film – a follow-up to 2015’s Inside Out about 11-year-old Riley and her funny, fascinating, sometimes problematic emotions – netted an estimated $155 million during its debut.

That’s the 29-year-old Pixar’s second-highest opening ever, with only Incredibles 2 beating it out at $182.7 million. Moreover, according to the Associated Press, it’s “the second-biggest animated opening ever,” the biggest since Barbie, and worth $295 million globally so far.

It’s prompted a lot of celebration by Disney shareholders and a lot of speculation by analysts. Both of which are understandable and justified.

As for me, I’m looking at it as a larger commentary on the movie theater business. Because Inside Out, like last year’s Barbie, and 2002’s Top Gun: Maverick, people still enjoy the movie theater experience…

If they’re properly incentivized. In which case, movie theaters still stand a chance.

Some of them, anyway.

The Glitz Is Gone (but Not Forgotten) From Hollywood

The pandemic really did put a wrench in Hollywood’s plans, shutting down theaters for months or more. With people coerced into their homes and onto their couches, they sought refuge in easy, online entertainment.

It was a lengthy period of conditioning that reset movie watchers’ expectations. As a result, they now need extra motivation to participate in what used to be a major Western world pastime.

That starts with movies people actually want to see.

Let’s face it: For too long, Hollywood has been pretty lazy at producing worthwhile pictures.

We can all probably name exceptions that meant something to us. But going back to Disney, look at what it did with the Star Wars franchise, a once beloved, money-making machine.

The “House of Mouse” bought all those rights on October 30, 2012… and immediately set out to destroy the status quo. The Force Awakens, released in 2015, saw Princess Leia and Han Solo separated, and their adult child terrorizing the galaxy as a Dark Force apprentice.

A son that kills his father at the end of the movie.

Thanks a lot, Disney.

It didn’t matter what fans actually wanted. The bucks would keep coming regardless, the company seemed to say… hence the reason they turned Luke Skywalker into an equal sob story a few years later in The Last Jedi.

Oh, and then he dies too.

Those Disney decisions were followed up by increasingly “woke” complaints from its audience. You won’t see much mention of that issue in the mainstream media. But it’s a big factor nonetheless in Disney’s recent string of box office failures.

The company has been pushing its political beliefs over everything – including good storytelling – and people just weren’t interested in paying for the results. Inside Out, from everything I’ve heard, changed the game in returning to Disney and Pixar’s uncomplicated heartwarming roots.

As for the rest of Hollywood, it’s no secret the larger industry lost much of its originality long ago. Most movies that have come out in the last decade are trite or, perhaps worse, poorly reimagined remakes of beloved classics.

The 2016 version of Ghostbusters…

The 2006 version of The Pink Panther

The 1998 version of Godzilla…

Why bother paying for that lack of quality consideration when you’ve got so many other video options at your literal fingertips?

Expensive and Oversaturated

The pandemic also made people realize how very overpriced the movie theater experience is.

Primetime tickets are now $10 or more – maybe much more – depending on where in the U.S. you live. A large popcorn is probably going to cost you an extra $6 or more. And if you want to add a soda, you could easily bring your total bill up to $20.

For a single person.

Before the pandemic, the average person could easily spend closer to $12 for the same experience. Talk about inflation!

But that’s not the biggest factor in pushing people away from movie theaters, believe it or not. The biggest problem by far is one the pandemic didn’t create; it only emphasized.

There are simply too many movie theaters in existence. Just like there are too many malls.

Before 2019, there were more than 43,000 screens in the U.S. Today, that number is under 40,000. And it’s still too much.

As for individual movie theaters, just do a search for your personal “near me” list on Google or Apple Maps. Depending on where you live, there could easily be five or more within a 30-mile radius.

That’s a lot of competition for a business as specific and economically unnecessary as a theater.

Sure, it’s convenient for consumers. But that doesn’t make it sustainable, even for the average five films a year moviegoers used to see. That’s why you saw movie theaters struggling and even closing across the country in the 2010s and even 2000s.

I saw this happen myself with a location I built myself back in Spartanburg, South Carolina. It was leased to a local movie theater named Carmike that made good money for a time.

But that ended in 2000 (after Carmike went into bankruptcy), and the structure has since been demolished and turned into an ExtraSpace Storage facility.

(Incidentally, tomorrow’s piece will be about self-storage… a lucrative field you should know a thing or two about.)

The Death of Movie Theaters Isn’t Inevitable

Just this January, The Hollywood Reporter wrote that “one out of every five moviegoers has vanished since the pandemic.” And they might never come back.

In which case, we’re going to see even more theaters close across the country before this saga is said and done.

The success of movies like Inside Out shows there are enough people who enjoy the typical popcorn-crunching, soda-slurping, side-by-side seating experience to make money. They’re even willing to pay exorbitant prices to do so.

But again, they have to be properly enticed. That’s why so many successful theaters are remodeling their spaces, their seating, and their amenities.

Full meals served to you in your seat? Cocktails if you so choose? Reclining chairs?

They’re all available in select locations.

Of course, that’s all something the bigger movie theater chains can more easily afford, which means many smaller competitors are on their way out.

And all of them, regardless of size, are very dependent on how well their Hollywood suppliers cater to consumers. To quote more of that Hollywood Reporter piece:

Superhero fare – the genre that helped prop up the business for well over a decade – no longer got a free pass [in 2023] as mega-budget pics bombed, including The Flash and Aquaman and the Lost Kingdom, both from DC, and Marvel Studios’ [aka Disney’s] The Marvels.

And we already discussed once-unthinkable Disney flops, with 2022’s Lightyear and Strange World, as well as last year’s Wish serving as specific examples. It all just goes to show that moviemakers need to start caring more consistently about what they’re making and for whom.

If they do that well, I’m confident that the much-discussed slow and painful death of movie theaters will turn out to be highly inaccurate. But one way or the other, I can almost guarantee more pain from here.

Regards,

Brad Thomas
Editor, Intelligent Income Daily