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'Frozen' Will Seal a Record Box Office Year for Red-Hot Disney

Michael Santoli
Michael Santoli

Tales of Nordic gods and Scandinavian princesses will carry Walt Disney Co. (DIS) well past $4 billion in global box-office receipts for the year, a record annual performance for the storied studio operator.

“Thor: The Dark World,” a sequel in which the hammer-wielding Marvel hero must restore order to the universe, has earned nearly $550 million worldwide since its Oct. 30 international release, helping Disney hit $4 billion in one-year global ticket-sales. This beats the $3.79 billion earned by the studio in 2010 on the strength of “Toy Story 3,” “Tangled” and “Tron Legacy.”

Disney will add many more dollars to that $4 billion figure over the holiday weekend, as its new animated feature “Frozen” debuts Wednesday. The film is based on Hans Christian Andersen’s “The Snow Queen,” a tale of princess sisters in a Scandinavian realm, and has received generally favorable reviews.

Kevin Fallon at DailyBeast.com called it the best Disney Animation Studios release since “The Lion King,” which debuted nearly 20 years ago. On the Hollywood Stock Exchange, a site that allows betting on opening domestic box office totals, “Frozen” is seen collecting more than $130 million in its first four weeks, up from a collective guess below $100 million two months ago.

A round of splashy audience pleasers

These second-half hits took the baton from a couple of earlier big-money pictures this year, the can’t-miss three-quel “Iron Man 3” and “Oz: The Great and Powerful,” a re-imagined take on “The Wizard of Oz” that got a mixed critical reception but ultimately did nearly $500 million in global gross receipts. Together these splashy audience pleasers have more than made up for the spring flop that was “The Lone Ranger.” That money-losing Johnny Depp vehicle summoned memories of the ill-conceived and very expensive 2012 sci-fi Western “John Carter,” which led to a $200 million writedown for Disney and the replacement of its overall studio chief, Rich Ross.

The 2013 box-office bonanza also further ratifies the long-term movie-making strategy of Walt Disney chief Bob Iger, who has run the company since 2005 and has worked to apply greater financial and branding discipline to an often irrational business.

He came in openly saying Hollywood made too many films in a given year, and vowed that Disney in particular would focus on movies that identifiably embodied one of its core brands. That has meant fewer “me-too” romantic comedies or buddy movies, and more “occasion” movies with a strong brand voice that had the potential to become franchises in themselves.

In Iger’s definition, a franchise is a set of stories or characters than can work across multiple product platforms, from movies to merchandise to theme-park rides to cruise-ship stage shows. Think “Pirates of the Caribbean,” “Cars” or the Disney Princesses line.

Expert acquisitions

Along the way, Iger has expertly acquired unique entertainment properties to complement and further enliven the traditional Disney moviemaking fairy dust. He bought Pixar in 2006, bringing aboard easily the most innovative and skilled generator of computer-animated stories that appeal both to kids and adults. Three years later, under fire for lacking boy-friendly properties, Iger grabbed Marvel Entertainment, which became an instant blockbuster factory. Then last year Disney was offered the chance to buy Lucasfilm and its "Star Wars" franchise and Iger jumped at it.

In every case, Iger was criticized for overpaying and inviting failure by perhaps snuffing out these studios’ unique cultures. Yet they each represent long-lived intellectual property that cannot be closely replicated – a crucial advantage in a crowded media world. Pixar and Marvel have remained largely intact and their releases have more than justified the prices paid, and few doubt that, once "Star Wars" sequels begin rolling again in 2015, Lucasfilm will likewise seem to be a relative bargain.

Along with these largely autonomous studios, the company maintains Walt Disney Pictures, its live-action movie studio, and Disney Animation Studios, home of the traditional hand-drawn cartoon films and producer of “Frozen.”

This diversified approach has worked in Disney’s favor as each studio’s knack for hit-making has ebbed and flowed. Pixar had a pretty good winner this year with “Monsters University,” but it was a long-established franchise and generated less buzz than the best Pixar offerings have. Now its upcoming release, “Dinosaur Planet,” has been pushed onto the 2015 slate from spring 2014, apparently in need of more fine-tuning. This soft patch for Pixar hurts less because Disney Animation has undergone a bit of a revival, with the well-received “Princess and the Frog” and “Wreck-It-Ralph” preceding this year’s “Frozen.”

Filmed entertainment in total is, perhaps surprisingly, a relatively modest component of Walt Disney’s overall business. In the fiscal year ended Sept. 28, the studio division contributed 13% of company revenue and just over 6% of operating profits. Cable networks, specifically ESPN, are by far the most important piece of the company.

Still, the diversity, quality and discipline that Iger has brought to the studio division are part of the reason Disney has won raves from its investors. Disney stock, a fixture of family portfolios for generations, is up more than 36% this year and has climbed nearly 200% since Iger was named CEO in October 2005 – about four times the gain in the broad market over that time.