During an earnings call on November 8, Walt Disney Company CEO Bob Iger admitted that the entertainment behemoth had somewhat fallen short on delivering quality material in its endeavor to pump out content for its audiences.
"I've always felt that quantity can be actually a negative when it comes to quality," he said. "That's exactly what happened. We lost some focus."
Sharing plans to slim down production and make fewer movies with a focus on higher quality, Iger said that the company would spend $25 billion on programming in the new fiscal year, $2 billion less than the previous one.
"We're all rolling up our sleeves, including myself, to do just that. We have obviously great assets [and] great stories to tell," said Iger, who returned as Disney CEO last November, following Bob Chapek's departure.
Iger's announcement came in the same month that saw more disappointment at the box office. The Pixar Animation musical-comedy Wish underperformed dismally, earning $19.6 million in its opening weekend over the Thanksgiving holiday.
In the weeks since, the movie has trudged on to a domestic total of $43.6 million. Internationally, the film has earned $39.7 million, bringing the global total up to $83.4 million.
Disney and Pixar have released seven animated movies in November over the past 25 years, according to figures compiled by movie consultancy Franchise Entertainment Research. Of these, Encanto previously had the lowest three-day opening at $27.2 million. Still, Wish fell considerably under that figure.
Marvel's Dip in Fortunes
Marvel Studios, which is Disney's most valuable property, has had its worst year at the box office since 2014, not counting 2020, when none of its movies were released due to the COVID-19 pandemic.
Marvel's $1.51 billion earned at the box office this year is the lowest total since 2014, when the studio pulled in $1.49 billion. However, Marvel released two films in 2014, while there have been three this year.
The Marvels, which debuted on November 10, has been something of a flop at the domestic box office, with an opening weekend of $47 million—far under the already lowered expectations of $60 million. It marked the Marvel Cinematic Universe's (MCU) lowest-ever opening weekend.
Domestic earnings for the movie, which sees Brie Larson reprise her role as Captain Marvel, currently stand at $81.4 million, while it has pulled in $116.4 million overseas. Preceding its release was the recently concluded actors' strike, which prohibited stars from promoting their films.
The earnings pale in comparison to Captain Marvel, which made $153.4 million during its opening weekend in 2019 before amassing $1.13 billion worldwide upon its release.
In a statement shared by Variety, Disney announced on Sunday that it would no longer be reporting the movie's global box office takings.
Larson notably debuted as Captain Marvel one month before The Avengers: Endgame's premiere—at the height of the studio's success—a critical juncture for the MCU's Thanos-centric storyline. Endgame felt like the end of an era, making the Captain Marvel release all the more important.
And it might not be the quality of the film, which has received several positive reviews, that affected the poor box-office performance, but rather an emerging trend for Marvel movies.
Ant-Man and the Wasp: Quantumania came out in February and made $476 million worldwide, a relatively paltry amount compared to other MCU movies. Marvel currently has four movies in the top 10 highest-grossing films of all-time globally.
Unprecedented Position
With Disney once seen as having the box office Midas touch, news like this has made industry analysts sit up and take notice as the company enters a new fiscal year without the towering high hopes once bestowed upon it without question.
So what went wrong? David A. Gross, who runs Franchise Entertainment Research, told Newsweek that the company's focus on its Disney+ streaming service—and pumping out enough content to keep subscribers on board—has placed it in an unprecedented position.
"At the beginning of the pandemic, the industry embraced short-term thinking and threw itself into the streaming business without thinking about what that might do to moviegoing when the pandemic ended," he explained.
"The stock market rewarded it. Traditional release windows were blurred and moviegoers were trained to watch what had been theatrical stories at home. Audiences became comfortable, and the value of the big screen dropped. We had at least two years of that, before the industry realized what was happening. By the time Wall Street pulled the plug, the theatrical experience was damaged."
With Disney+ having launched in November 19, 2019, the timing could not have been more perfect for the platform to entertain stuck-at-home audiences when the COVID-19 pandemic led to sweeping global lockdowns from March 2020.
"This timing worked in favor of the new streaming service but also applied pressure on their big screen movie brands to pivot to the small screen and thus placed some of their biggest theatrical films from their Pixar, Star Wars, animation and of course Marvel divisions in a simultaneous day and date release or a small screen only premium option that left many consumers confused," Paul Dergarabedian, senior media analyst at Comscore, told Newsweek.
"Producing a massive amount of spinoff Marvel shows, some of which required much homework on the part of even die-hard fans to unravel the various plot points and universe interconnectivity, also caused consternation among fans and critics alike."
Perhaps in a move to wake itself from a nightmare of its own making, it was announced this week that Pixar plans to release three of its movies in theaters across the U.S., long after they had streaming debuts on Disney+.
Soul, Turning Red and Luca will be released domestically on January 12, February 9, and March 22, respectively. In 2020, Soul debuted on Disney+ at the height of the pandemic, followed by Luca in 2021 and Turning Red in 2022.
The release of the films will follow the unexpected summer success of Elemental, which had a soft opening with $29.6 million, but went on to become a sleeper hit, earning $154.4 million at the domestic box office and an additional $341.5 million internationally.
"In the long run, there's been a bit of a mixed blessing because we've trained audiences that these films will be available for you on Disney+," Pixar's creative chief officer Pete Docter told Variety in June "And it's more expensive for a family of four to go to a theater when they know they can wait and it'll come out on the platform. We're trying to make sure people realize there's a great deal you're missing by not seeing it on the big screen."
Political Detractors
However, luring audiences back to movie theaters in huge numbers may prove difficult for Disney, which helped to solidify a new viewing culture that consumers appear stubborn to revert from.
Then there's the political aspect: Disney has faced fervent criticism from MAGA conservatives in recent years. A move for more diverse casting and themes in its movies has sparked backlash.
Former President Donald Trump, who is the de facto face of the MAGA movement and a friend of Marvel Entertainment's former chairman and CEO Isaac "Ike" Perlmutter, called out Disney for "going woke" during a rally in Florida in November.
It was also criticized for choosing to cast Halle Bailey in the role of Ariel in the 2023 live-action remake of The Little Mermaid—including from conservative commentator Matt Walsh, who said a Black mermaid wasn't accurate from a "scientific perspective."
Looking at the mixed reaction from audiences, Gross told Newsweek that "in terms of the Marvel, Disney and Pixar brands, we had a period of creative experimentation during the pandemic, including directors from different genres and gender and race swapping. Some of it worked beautifully, and some of it didn't.
"Some of it worked temporarily, and some of it was enduring. Against the backdrop of saturation on streaming, audiences are less committed now if they have a doubt about something new."
Jonathan Majors Trial
Disney also has an issue in the form of Jonathan Majors, as the studio presses on with plans to prominently feature the actor in one of its major projects amid his ongoing domestic violence trial.
The Loki actor is facing a Manhattan court over charges he allegedly assaulted his ex-girlfriend, Grace Jabbari, in a March incident in New York City. Attorneys for the actor, who has denied all charges against him, previously told Newsweek he was "provably the victim here," in his altercations with his ex.
Majors has been slated to become MCU's overarching new villain, Kang the Conqueror, and has already appeared in the first season of Disney+ series Loki and the film Ant-Man and the Wasp: Quantumania.
The actor currently remains signed to appear as the supervillain in Avengers: The Kang Dynasty in 2026 and Avengers: Secret Wars in 2027, a move that would have solidified Majors' rise as an A-list leading man following his lauded turn in HBO's cult sci-fi hit Lovecraft Country.
Despite his legal issues still ongoing, Disney is, for now, sticking with Majors.
Adding to what appears to be a behind-the-scenes headache for the studio, Avengers: The Kang Dynasty and Avengers: Secret Wars are currently without a director. Last month, filmmaker Destin Daniel Cretton exited as Kang Dynasty's director, perhaps signaling a creative overhaul. Variety has reported that Loki creator Michael Waldron is on board to write the screenplay for Kang Dynasty.
While Majors currently retains his high-profile role with Disney, the entertainment giant does not appear to be all-in. Disney has removed the previously much-hyped Searchlight film Magazine Dreams, starring Majors, from its release schedule.
It could be that Disney is taking a wait-and-see approach, perhaps downplaying its current projects with Majors while also keeping him on board for movies in the further distance should the trial go his way.
Should the trial not go Majors' way, recasting is also an option for the studio giant. Marvel has previously recast a number of roles in MCU, including replacing Terrence Howard with Don Cheadle in Iron Man 2, William Hurt with Harrison Ford after Hurt's death, and most infamously, recasting the Hulk character when it swapped out Edward Norton in favor of Mark Ruffalo.
Amid the speculation, one thing is for sure: Majors' future with MCU, and on the big screen overall, rests in the hands of his trial.
Newsweek has contacted representatives of Disney via email for comment.
Harvey Weinstein Factor
Adding to Disney's woes, Legends of the Fall star Julia Ormond filed a lawsuit in which she accused Harvey Weinstein of sexually assaulting her following a business dinner in 1995. At the time, Miramax, the production company co-founded by Weinstein, was co-owned by Disney.
While the allegations are similar to other claims made against convicted sex offender Weinstein in recent years, the lawsuit sits in unusual territory in that Ormond is also suing Creative Artists Agency (CAA), The Walt Disney Company and Miramax.
"CAA, Miramax, and Disney continued to handsomely profit from their close association with Harvey Weinstein for many years after Ormond was assaulted by him and then cast aside by Hollywood," Ormond's attorneys state in the lawsuit. "But the damage to Ormond—and so many other women Harvey Weinstein went on to rape, assault, and harass—has yet to be fully understood."
In a statement shared with Newsweek, Ormond said that after "living for decades with the painful memories of my experiences at the hands of Harvey Weinstein," she now has the opportunity "to shed light on how powerful people and institutions like my talent agents at CAA, Miramax and Disney enabled and provided cover for Weinstein to assault me and countless others."
While an attorney for Weinstein said the onetime producer "categorically denies the allegations," legal experts not connected to the case told Newsweek that the implications could be far-reaching for Disney, depending on how the case progresses.
"If Ms. Ormand can prove that Disney was indeed in a supervisory relationship with the convicted rapist Weinstein, they could potentially be on the hook for millions of dollars in damages, to say nothing about the public image damage that could be done to the holder of the Micky Mouse brand," Seattle attorney Kirk Davis told Newsweek.
Los Angeles entertainment law attorney Tre Lovell told Newsweek that the case against Disney "certainly sets precedent. In most cases, a parent company is not liable for the tortious conduct (or negligence) of its subsidiary.
"However, if Disney was significantly involved in the operations of Miramax to where it was jointly operating the company, as well as having control over employment and other functions, there's a good argument it may have had a duty to create a safe, harassment-free environment along with Miramax."
Disney's Other Brands
The political aspect of Disney detraction has bled over into the company's other brands, most notably its theme park in Florida. A dip in revenues, raising inflation pressures, layoffs, big wage demands from workers, and an ongoing political battle with Florida Governor Ron DeSantis—who has placed the theme park at the center of his ideological war against "wokeness"—have all taken their toll.
Last year, Disney made headlines for criticizing DeSantis' Parental Rights in Education bill. The bill, also known as the "Don't Say Gay" law, says that "a school district may not encourage classroom discussion about sexual orientation or gender identity in primary grade levels or in a manner that is not age-appropriate or developmentally appropriate for students."
It also says that parents "may bring an action against a school district to obtain a declaratory judgment that a school district procedure or practice violates this paragraph and seek injunctive relief. A court may award damages and shall award reasonable attorney fees and court costs to a parent who receives declaratory or injunctive relief."
After DeSantis, a Republican, signed the bill into law in March 2022, Disney said in a statement: "Florida's HB 1557, also known as the 'Don't Say Gay' bill, should never have passed and should never have been signed into law. We are dedicated to standing up for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country."
Disney, which continues to be at loggerheads with DeSantis, has since faced criticism from a faction of conservatives angered by the company's stance.
Disney has six theme park resorts, located in Florida, California, France, Japan, Hong Kong and China. The Walt Disney Company generated a total revenue of almost $29 billion in 2022 through its parks, experiences, and products, according to Statista. This represented an increase of around $12 billion from the previous year. However, there have been reports of changing numbers in recent months.
The Associated Press reported in August that travel analysts observed an unusual downturn in visitors heading to the U.S. theme parks during peak summer months. Ride waiting times at Disney World in Florida and California's Disneyland were shorter by an average of 10 minutes over the summer from a 2019 high, per the report.
A spokesperson for Disney told Newsweek last month that the reduced wait times do not necessarily represent a reduction in customer footfall. The representative added that Florida was the sole park to have seen a reduction in numbers—an issue affecting parks across the region—as more Americans opted to vacation in Europe this past summer following the global lifting of COVID-19 pandemic restrictions.
The recent storms clouding Walt Disney World in Florida have consumers and economic experts keeping a close eye on what its future holds, with some questioning how exactly park bosses will transfer increasing costs onto consumers.
"The costs of running the theme park will continue to escalate, creating pressures for executives to quickly adjust and evolve their formula for growth. The real challenge? How do you disperse the hourly wage increase for park employees onto paying customers who themselves are dealing with the looming threat of a recession," Christina Curtis, founder of Curtis Leadership Consulting, previously told Newsweek.
In a move that it is hoped will boost fortunes, Disney is spending $60 billion to expand its parks and cruise offerings over the course of about a decade.
It was also announced this week that Storyliving by Disney would be developing a new residential community, dubbed Asteria, on around 1,500 acres of land in North Carolina. It is the second Disney-themed community in development in the U.S., following the Cotino community in Rancho Mirage, California.
Looking Forward
A shot at utopian living will still leave residents wanting entertainment once they're done meandering through the proposed neighborhood parks and walking and biking trails. The question is, will they turn to Disney to fill that gap?
Gross, of Franchise Entertainment Research, told Newsweek that, looking ahead, he sees glimmers of hope.
"Looking ahead, Planet of the Apes in May 2024, which was originally a Fox property, looks very strong," he said. "Looking back, Guardians of the Galaxy Vol. 3 last May did very well. It finished with $845.6 million worldwide—that's a very good number, down only 2 percent from Vol. 2. There was nothing wrong with that, at all."
"All genres are fragile right now, with the exception of horror, which is doing well," Gross said. "We're going to know more about superheroes and animation soon with Aquaman 2/DC Comics and Migration/Illumination (both being released on Dec 22), but business has been soft for these kinds of films, so nothing is sure."
Disney, Gross notes, has the challenge of producing content that doesn't reflect what audiences have been going for over the past year.
"What worked well this past summer were stories that connected personally and made audiences feel something about themselves," he said. "That's a departure from classic Marvel, Disney and Pixar, which generally work in the fantasy realm.
"There are exceptions, of course, but we have to see if that is really a sea change, or a passing fad. It took 20-plus years for superheroes and animation to reach the pinnacle of success. Those stories are still universal across most cultures and languages. Stories about good versus evil will always be at the center of Western storytelling. Let's see where it lands."
"Moviegoing is upside down right now and it's going to take time to settle down," he added.
Dergarabedian, of Comscore, predicts a turnaround of fortunes for Disney, which he asserts will have taken notes on the factors that haven't worked over the past year.
He told Newsweek that "the audience is making it clear as to how they feel about the content on offer from Disney and with this information in hand, this venerable and iconic company can certainly right the ship and return to the glory days that has made it one of the biggest media powerhouses in history."
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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