Disney’s Box Office Slump Continues as ‘Wish’ Also Flops
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Entertainment giant Disney’s box office slump continued into the Thanksgiving weekend as the company’s theatrical release “Wish” flopped adding to the long list of titles that have performed poorly.
Wish generated just $31.6 million over the five-day weekend in the U.S. which was well short of the $45 million-$55 million that analysts expected. Also, the collections trailed that of “Napoleon” from Apple which came second with $32.75 million. Meanwhile “Hunger Games: The Ballad of Songbirds and Snakes” from Lionsgate was the best-performing title during the weekend with $42.2 million in ticket sales.
Disney’ “Wish” underperforms at the box office
Usually, the Thanksgiving week has worked well for Disney’s releases but Wish tanking at the box office is yet another setback for the company after the latest Marvel release also failed to generate the expected sales.
Paul Dergarabedian, senior media analyst at Comscore said, “A set it and forget it strategy based on past performance can no longer be employed by any studio.” He added, “There are some hard lessons being learned as this confounding movie marketplace continues to re-write the rules and audiences make their preferences known with either their presence or the absence at the multiplex.”
Meanwhile, analysts believe that “Trolls Band Together,” the third title in the popular Trolls franchise from Universal’s DreamWorks whose box office collections totaled $25.6 million over the period also ate into Wish’s sales.
According to Dergarabedian “Entering a marketplace with a familiar ‘Trolls’ movie already in the mix was a recipe for a less than stellar result for the company’s latest release.” He’s however still optimistic about Wish and said, “Wish’ fortunately has the December holiday family moviegoing corridor and of course a future on Disney+ to bolster its fortunes.”
Disney’s streaming pivot
In 2019, Disney’s then CEO Bob Iger started the company’s Disney+ streaming business which reached the benchmark of 100 million subscribers in just 16 months – much quickly than other streaming services.
Bob Chapek, who succeeded Iger put streaming at the center of Disney’s business and set up ambitious long-term streaming subscriber forecasts. However, while Disney’s streaming subscribers were rising fast under his watch – so were the segment’s losses which peaked at almost $1.5 billion in the fiscal fourth quarter of 2022 that ended in September.
Shortly after Disney disclosed the massive loss, the company’s board fired Chapek and bought back Iger who withdrew the streaming subscriber guidance while putting focus on profitability.
Disney’s streaming losses have narrowed
The efforts have paid back and the streaming segment’s operating losses narrowed to $420 million in the most recent quarter.
Disney ended the fiscal year with total Disney+ subscribers of 150.2 million which was higher than the 148.15 million that analysts expected. The company had 46.5 million subscribers in the U.S. and Canada and another 66.1 million in international markets – where the subscriber count incidentally increased 11% as compared to the previous quarter.
The company however lost Disney+ Hotstar subscribers and the metric fell 7% to 37.6 million. There have been reports that Disney is looking to sell its streaming business in India. Responding to an analyst question about the plans for the India business, Iger said that Disney is “considering our options in the country.” He added, “We’d like to stay in that market. But we’re also looking to see whether we can strengthen our hand obviously, improve the bottom line.”
Bob Iger admitted to its titles not performing well
Meanwhile, during the fiscal fourth quarter 2023 earnings call, Iger admitted, “At the time the pandemic hit, we were leaning into a huge increase in how much we were making. And I’ve always felt that quantity can be actually a negative when it comes to quality. And I think that’s exactly what happened. We lost some focus.”
He however added, “I feel good about the direction we’re headed, but I’m mindful of the fact that our performance from a quality perspective wasn’t really up to the standards that we set for ourselves.”
Iger said, “To achieve this we are focusing heavily on the core brands and franchises that fuel all of our businesses and reducing output overall to enable us to concentrate on fewer projects and improve quality, while continuing our effort around the creation of fresh and compelling original IP.”
How analysts reacted to weak numbers of Wish
Gitesh Pandya, founder and editor at Box Office Guru told Yahoo Finance, “The numbers on [“Wish”] were really low — even by Disney standards and Thanksgiving standards.”
Pandya said, “People have tremendous options at home.” He added, “One of the things consumers are thinking about is, ‘Do I need to spend $60 to $70 as a family in a movie theater right now?’ ‘Or can I wait for Disney+ later?’ That’s something which ‘Wish’ didn’t have — they tried all the marketing, but the excitement just wasn’t there. ”
TD Cowen analyst Doug Creutz does not believe that the road ahead is easy for Disney and said, “I don’t think the studio is going to be an engine that’s going to help Disney grow for the next 18 months” Creutz added, “I don’t think it’s going to get worse, but I don’t think it’s going to get better either.”
Iger is trying to transform DIS
Meanwhile, while Disney stock rose last year after Iger was appointed as the CEO, it has since pared gains even as the company has now increased the targeted cost cuts from $5.5 billion to $7.5 billion.
Iger also outlined “four building opportunities” for Disney. These are
- Achieving significant and sustained profitability in the streaming business
- Transforming ESPN into the “preeminent digital sports platform”
- Improving the output as well as the economics of Disney’s film studios
- Turbocharging the growth of the Experiences business
Iger added, “We have already made considerable progress on these four opportunities, and we will continue to move forward with a sense of purpose and urgency.”
However, teething issues at its parks, perennial losses in the streaming business, the underperformance of recent titles, as well as the sagging growth of its Linear TV business have spooked investors.
