Boardwalk Times: Stories from the Seashore — Is Disney Failing Pixar?
After the release of Elemental, we have to discuss Disney's Pixar situation.
Welcome back to Boardwalk Times: Stories from the Seashore!
In this issue, we will be covering:
Is Disney Failing Pixar? 😨
Disney’s search for its next CFO and the fallout of Christine McCarthy leaving. 💰
Disney’s Hulu Decision. 📺
Podcast Plugs 🎙
Links of the Month 📰
But before all that are the monthly poll questions… We’ve gained a few new subscribers, so I wanted to ask some questions.
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Is Disney Failing Pixar?
Elemental was an amazing film. It felt like classic Pixar. It had vibrant animation, fun characters, and a solid overall theme. Despite Elemental being beloved by critics and fans, the film only made $29.5 million at the box office. That’s the lowest in the history of Pixar.
Disney’s marketing efforts for Elemental weren’t great.
It’s quite evident that the general audience didn’t even realize Elemental was coming out until it was too late. At points, it felt like Disney wasn’t even trying to market Elemental to a mass audience. Someone, somewhere within Disney decided to give The Little Mermaid (a film that is a remake that sells itself) the full marketing blitz while ignoring Pixar.
To make matters worse, Elemental’s low opening is coming at a time when Pixar just can’t find itself a win. Onward was released at the beginning of the pandemic. During the Chapek era, we witnessed three Pixar films sent directly to Disney+. The pandemic was happening, so releasing Soul direct to Disney+ made sense at the time. Luca should’ve gone to theaters. Even if it would’ve opened lower, it would’ve kept Pixar’s theatrical brand intact. Heck, Turning Red which came out in 2022 should’ve been in theaters. (If Disney was concerned about how the film would’ve performed against The Batman, they could’ve just taken the hit and delayed it. That’s better than just giving it away for essentially “free”). After the three straight-to-Disney+ films, Pixar returned to theaters with a Toy Story spinoff Lightyear. The film was a big financial and creative misfire (I won’t stick Lightyear’s failure on Disney at all, that was a pure Pixar move and even the best of studios sometimes miss). Yet, Disney’s lack of Elemental marketing is just another example of how Disney has mistreated one of its most prized and beloved studios.
So it’s time to ask: Is Disney Failing Pixar?
Sure, Pixar films have been theatrical since its existence but did the whole “Pixar to Disney+” strategy screw up Pixar’s audience? This quote from Pixar CCO Pete Docter expresses how that strategy was a mixed blessing.
“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+. 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.”
Animation is for everyone, but one of Pixar’s core audiences is families. Docter makes an excellent point that it’s cheaper for families to watch on Disney+ than to go to the theater. So, it may be safe to assume that some families are just fine waiting 40 days to see Lightyear or Elemental show up on Disney+, after all these same families got to watch Soul, Luca, and Turning Red for free with their Disney+ subscriptions. It may be a hard habit for families to break.
Docter continued to share his views on why families are reluctant to return in his interview with Variety:
“I think families with kids are more reluctant. It’s not just health, it’s the cost. It’s not a cheap outing to go to the theater and buy popcorn. It’s a great time, but they really are very selective about what they’re going to go see.”
The problem is in the last line of this quote. Families are selective about what they’re going to go see. Sure it’s harder to get people to go along for the ride and see something original but you still have to try. You also have to market the movie! Sure, Across the Spider-Verse and Super Mario Bros. Movie had huge fanbases already baked in but those films did their fair share of marketing in the lead-up to their releases. (Mario is the highest-grossing film of 2023 so far, Spider-Verse is fourth!)
Docter mentioned how people want comfort of what they know but he also said how it’s essential that all the studios continue to develop new original stories. Docter admitted it’s harder to get people excited and harder to publicize. Pixar makes some of the most creative films in the world, maybe it’s time for them — along with Disney — to get creative with their promotion. But we can’t forget at one point all Pixar titles were originals!
Then Disney decided to trot Elemental and Indiana Jones and the Dial of Destiny at Cannes. Just a bizarre decision in hindsight for BOTH films. Heck, Pete Docter even said the Cannes premiere was confusing. Elemental went from a seven-minute standing ovation to being torn to shreds and being stuck with a bad Rotten Tomatoes score. The Rotten Tomatoes score would rise once more reviews got in.
Elemental just seems like another case of Disney neglecting Pixar for no good reason. And this time the world can’t blame it on Chapek!
But now let’s look at the other side of the coin: Is Pixar failing Disney?
This seems like a case that is being made everywhere. So I have to explore it, and I know I’m writing about how Disney is failing Pixar but one knock against the studio is the sheer fact that not every single film should cost $200M. Animators and animation are expensive but when every film costs $200M, it’s a lot tougher financially when you miss.
After the box office bomb of Lightyear, Disney actually increased its oversight at Pixar. When you start to lose money you start to lose your autonomy and freedom. Pixar has to address the large budgets because their competitors make their films at a way lower cost.
Another issue, that has been discussed when debating this Pixar situation is the fact original animation may be too tough to sell in this current environment. We mentioned this a ton in the previous section on how it’s difficult to market original films. We also have to consider the fact that Pixar as a studio has grown up a bit. It’s a different studio now than it was back when it was run by Ed Catmull and John Lasseter. Pixar has more fresh and diverse voices than ever and that’s a good thing. All studios evolve but maybe Pixar being a more mature and ambitious studio is actually hurting its appeal with the kids and family demographic. Just a thought as that point has been argued.
Pixar CCO Pete Docter has gone on the record that Pixar doesn’t make programming for children. Of course, Pixar makes programming for everyone. However, Matt Belloni of Puck News reported that one Pixar insider believes that Pixar has lost its broad accessibility.
I don’t think we should be going after Docter though. He shouldn’t be blamed for all these chaotic circumstances that were largely out of his control. His track record since taking over Pixar has been good critically. It should be better commercially but he can only control what he can control, and that’s telling good stories.
Pixar’s future is uncertain for the most part. We may have to dive into its future in a future newsletter. However we got Win or Lose, Pixar’s first long-form Disney+ series coming out this year. An Inside Out Disney+ series is also in the works, and likely will be long-form if I had to guess. Pixar’s 2024 film slate is Elio, which only has a teaser so far but it’s giving me Lightyear vibes… Then we got Inside Out 2 happening but it’s unclear if the entire voice cast will return. I think this sequel will only work if they can get the entire crew back. You don’t want a Pixar sequel coming across as a direct-to-VHS-type film.
Elemental thankfully only dropped 37% in its second weekend and had a $18 million haul. Word of mouth works, and the film deserves it. Although that opening could’ve been a lot stronger if Disney didn’t putz around and actually advertised it.
I personally think Disney is failing Pixar by not giving it the right marketing support. Instead of just making Toy Story 5, there should be some deep discussions on how to improve the marketing and promotion of future Pixar original films. Disney should also try to boost morale at Pixar. Heck, maybe give Soul, Luca, and Turning Red limited one-weekend runs at the box office during the slow months at the theaters?
Do you think Disney is failing Pixar? Is Pixar failing Disney? Make your voice heard and cast a vote below.
Have a topic you want me to cover? Drop me a line at boardwalktimes@yahoo.com!
Disney Begins Its CFO Search
Disney CFO Christine McCarthy will be stepping down as Disney’s CFO on July 1. McCarthy is taking a family medical leave of absence, but she’s also going to help Disney find a successor. Disney’s interim CFO will be Kevin Lansberry, the CFO for Disney, Parks, Experiences, and Products. Lansberry is temporarily taking on the interim CFO role and moving to Burbank from Orlando. Could he just capture the job? I wouldn’t rule that out.
After it was announced that McCarthy would be stepping down, it was reported by The Wall Street Journal that McCarthy was clashing with Disney execs on cost cuts. McCarthy was pushing for the Disney Entertainment unit (Disney+, Theatrical, etc.) to be consolidated even further to improve margins. McCarthy wanted Disney to adopt a structure similar to Netflix.
It’s clear that was a no-go with Iger and the other executives. Christine McCarthy also played a pivotal role in the ousting of former Disney CEO Bob Chapek and before that former Disney General Entertainment exec Peter Rice. McCarthy was also the one to make the call to Bob Iger to see if he would return to the company. Now McCarthy is the one being pushed out.
After how it was publicized how McCarthy blindsided Chapek it felt like it was only a matter of time before she would step down from Disney. What would stop McCarthy from throwing Iger under the bus right now? It’s a smart decision for Iger to move on and get fresh blood. There were also some who speculated and saw McCarthy as a CEO contender. The timeline there never made sense.
So who are possible internal candidates for Disney’s next CFO?
Kevin Lansberry (Interim Disney CFO) — This one is pretty easy. He’s the interim CFO. There is a reason he was asked. It wouldn’t be hard to just drop the interim. He’s a Disney veteran after all.
Brent Woodford (Executive Vice President, Controllership, Financial Planning, and Tax) — Woodford is responsible for the company’s external and internal financial reporting and plays an integral role in developing Disney’s operating profit, cash flow, and capital spending plans.
Carlos A. Gomez (Senior Vice President and Treasurer) — Gomez is responsible for the management and oversight of Disney’s global treasury organization, which includes corporate finance, liquidity management, capital markets, financial risk management, pension and investments, enterprise consumer payments, and global cash management. McCarthy was Disney’s Treasurer before becoming CFO.
Alexia Quadrani (Senior Vice President, Investor Relations) — Quadrani serves as Disney’s information liaison to the global investment community and a key advisor and resource to Disney’s senior management team.
It’s a little less clear when it comes to external candidates for CFO. I’d assume any seasoned and respected CFO in the media, entertainment, and or tech sectors would likely be possible for the job.
Although this CFO search may inform us of Disney’s approach to CEO succession. If Disney brings in an external candidate, they could do the exact same thing for CEO. In an ideal world, Disney could kill two birds with one stone and identify successors for CEO and CFO within the same time period. Although, that would require major cooperation between the Board, Iger, and Disney’s senior leadership team.
It Seems Like Disney Knows What It’s Doing with Hulu
The saying is that nobody knows anything. But let’s be honest it seems like Disney knows what it’s doing with Hulu. After teasing the possibility of selling the service, it seems likely that Disney will be keeping the streaming service. Sure, they are going to have to pay at least $9 billion for Comcast’s stake, but it seems like Hulu is here to stay.
In May, it was announced that Disney+ and Hulu would be a one-app experience for some subscribers by the end of the year. A combined Disney+ and Hulu app makes sense. The move will likely keep subscribers within the larger Disney streaming ecosystem (adding an ESPN tab is a no-brainer too). It’s just baffling that it took Bob Iger three months into his second run to realize that Disney+ & Hulu together would be a strong combination. Why didn’t he support this notion back in 2020? 2021? What changed his mind? Other than just finally realizing that it would just make a lot more sense to feature all of your premium content in one place.
On the other side of the Hulu equation, Comcast isn’t going to be a major player in the streaming wars. I think everyone knows that. Peacock doesn’t have enough to compete with the other services, and I could see Comcast pivoting its strategy and supplying streamers like Netflix, Apple, Max, and Amazon with content. Comcast acquiring Hulu doesn’t move the needle. It would just be Peacock cosplaying as Hulu. Why should Comcast waste its time and capital on that?
Despite all signs pointing to Disney buying Hulu outright, folks are going to speculate. Of course, it would be epic to see Bob Iger trade Hulu for Marvel Theme Park Rights in Florida. But that just won’t work. The whole Hulu situation has been tough for Disney but it’s becoming increasingly clear there is only one way out.
I’ve said in the past that a Disney+/Hulu/ESPN combined streamer would be a valuable service. It would be pricey but Disney could justify the price if they conveyed the content through marketing correctly. Disney will still offer the services individually but you have to wonder how long that lasts.
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Podcast Plugs 🎙
I was joined by Richard Nebens and Muska Olumi to discuss Spider-Man: Across the Spider-Verse, our first non-MCU title discussed on the pod. (Spotify) (Apple)
Savannah Sanders of The Direct joined me on a deep dive into the Marvel Theme Park Universe. (Spotify) (Apple)
Skrull SZN, our Secret Invasion after-show, kicked off this month. (Spotify) (Apple)
My Dad (Max Perilstein) returned to my podcast for Father’s Day. (Spotify) (Apple)
LINKS OF THE MONTH
— Walt Disney Studios exec Sean Bailey discusses developing new original films, the future of Pirates of the Caribbean, The Lion King becoming a saga, and more. (The New York Times)
— Bruce Vaughn is back at Walt Disney Imagineering. Vaughn discusses his return, VR/AR, Disney IP, drones, Iger, and more. (InPark Magazine)
— What do we think about these rankings for the best Disney song? I love the parks’ representation on this list. (Billboard)
— Quick Thoughts on Disney+ Coming to Apple Vision Pro. (Boardwalk Times)
— Spider-Man is now a part of Avengers: Quantum Encounter on the Disney Wish. Marvel doesn’t mess around when it comes to themed experiences and updates. (The Direct)
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