In 2019, Walt Disney released seven films that each grossed more than $1bn at the global box office — a remarkable feat built on Bob Iger’s string of studio acquisitions during his first 15-year tenure as chief executive.
Disney’s film studios were “on fire”, said Jessica Reif Ehrlich, an analyst at Bank of America. “Bob came up with a branded film strategy and for 10 years or longer, no other studio could compete with them.”
Now, however, Iger must deal with questions about whether the creative spark is starting to flicker at Disney’s studios, including the box office powerhouses Marvel, Pixar and Lucasfilm.
“The creative engines are just not working,” said Rich Greenfield of LightShed Partners, an investment research group. “And the challenge with the movie business is that there’s no quick fix.”
Last weekend’s disappointing box office performance by Pixar’s Elemental — a story about forbidden love between characters made of water and fire — crystallised the sense that Disney’s studios had fallen into a rut.
Elemental has had positive reaction from critics and audiences, but the film brought in under $30mn in the US box office on its opening weekend — a significant shortfall for a movie with an estimated $200mn budget. This poor showing has sounded alarms following the underwhelming performance of last year’s Lightyear, a Toy Story prequel that grossed only a quarter of the previous instalment of the franchise.
Ehrlich said: “It’s been a while since there’s been something like a Toy Story, something extraordinary that’s original and that really hits everybody.”
Iger was pulled out of retirement in November to help re-set the company’s course after his successor, Bob Chapek was forced out following a dispute with Florida governor Ron DeSantis and ballooning losses in its streaming business.
He has restructured the company to hand power back to creative executives, and last week Disney pushed out the release dates of a number of films — including those in the Avatar and Star Wars franchises.
But with less than 18 months left of his two-year contract, Greenfield asks if Iger will have time to revive the Disney magic.
“Everything at Disney flows from its creative excellence, whether that’s the theme parks, whether that’s consumer products, whether that’s Disney Plus,” he said. “More than any company, Disney is tied to its creative output, and that output just is not performing — and it’s not clear what’s wrong.”
Company executives acknowledged Elemental’s performance was disappointing but rejected the notion that Disney has hit a creative slump. They noted the strong US performance this spring of the live action version of The Little Mermaid and said they have high hopes for upcoming films including Indiana Jones and the Dial of Destiny, The Marvels and Wish. Marvel movies continued to draw large audiences, they added.
But the Elemental box office has drawn unfavourable comparisons with recent animated films released by Illumination studios, co-owned by Universal. Illumination’s The Super Mario Bros Movie, released April 5, has grossed $1.3bn worldwide, and its Minions: The Rise of Gru, has raked in $940mn since its release last year.
Pixar is under the leadership of Pete Docter, an Oscar-winning animator who started at the company in 1990. He has said Pixar is at work on a number of sequels, including Toy Story 5 and a follow-up to Inside Out.
Inside and outside Disney there is a sense that key brands, particularly Marvel but also Star Wars and Pixar, were pushed too hard to feed the company’s streaming service Disney Plus. During the pandemic, three Pixar features were released straight to Disney Plus, angering employees who say this conditioned audiences to think its films did not need to be seen in a cinema.
“The question is how much of this is overuse,” Greenfield said. “Is it trying to force everything on to Disney Plus with a series? Did they go too far with Marvel and Lucasfilm, diluting the power of the movie franchises by introducing all these [streaming] shows?”
After Disney bought Marvel in 2009, it spawned franchises that have produced dozens of movies and raked in tens of billions of dollars, making it the most successful hit engine in Hollywood. Marvel’s Avengers: Endgame, released in 2019, made an astounding $2.8bn and is the second highest-grossing film in history.
But Marvel’s record has been mixed more recently. There have been two hits — Guardians of the Galaxy Vol 3 and Black Panther: Wakanda Forever — along with a miss, Ant Man: QuantumMania.
Earlier this year, Iger said there was nothing “inherently off in terms of the Marvel brand” but suggested Disney needed to be more judicious about sequels.
“What we have to look at at Marvel is not necessarily the volume of Marvel storytelling, but how many times we go back to the well on certain characters,” he told a media conference in March. “Sequels typically work well for us, but do you need a third or a fourth?”
The same goes for the Star Wars films, which are under the supervision of Lucasfilm chief Kathleen Kennedy. Iger said: “We still are developing Star Wars films. We’re going to make sure that when we make one, that it’s the right one, so we are being very careful there.”
For Greenfield, the question is whether audiences are ready for Disney to branch out in new directions, instead of relying on its, admittedly valuable, library of intellectual property.
“If you look back over the last decade and Iger’s entire first run, the improvement year by year and the franchise growth was incredible,” he said. “And I think the question now is, have they gone to that well too many times? Do they need to create new IP?”