Disney: Will Thanksgiving reverse box office slump? Can Iger 'strengthen' studio output?
Disney (DIS) is hoping to reverse its Thanksgiving slump at the box office this year.
The media giant, which just saw its latest Marvel film bomb, will debut its new animated title "Wish" on Wednesday. So far, reviews have been lukewarm with critics assigning the film a mere 49% on Rotten Tomatoes.
"I tend to think that on some level 'Wish' is going to be a little critic proof, maybe not entirely, but it's certainly appealing to families and kids," Box Office Pro chief analyst Shawn Robbins told Yahoo Finance.
Robbins said he would consider a $40 million-$50 million debut over the five-day Thanksgiving period a win considering the circumstances as Disney CEO Bob Iger attempts to revamp the company's film division following multiple box office disappointments.
Iger said recently that one of Disney's "key building opportunities" includes "the need to strengthen the creative output of our film studio."
"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," he said on the company's earnings call earlier this month.
Iger stressed a strategy of "quality over quantity," citing an overproduction of content amid the 2019 Disney+ debut.
"I've always felt that quantity can be actually a negative when it comes to quality," he said. "I think that's exactly what happened. We lost some focus."
Box office watchers and Wall Street analysts alike believe the journey to recover won't be easy.
"I don't think the studio is going to be an engine that's going to help Disney grow for the next 18 months," Doug Creutz, analyst at TD Cowen, told Yahoo Finance. "I don't think it's going to get worse, but I don't think it's going to get better either."
Robbins warned a dismal debut for "Wish" will "reaffirm" just how much work Disney has ahead of itself, adding: "It's an uphill fight not just for this movie, but for Disney in particular right now."
One reason: Competition has escalated, particularly within the animation space, as NBCUniversal (CMCSA) and Sony (SONY) debuted strong titles this year — including the $1 billion "Super Mario Bros. Movie" and "Spider-Man: Across the Spider-Verse."
In addition, Disney, historically a leader in animation, has failed to measure up in recent years.
Last summer, Pixar's "Toy Story" prequel "Lightyear" fell short of expectations, producing just $51 million in its domestic debut before going on to gross a mere $118 million in theaters ahead of an expedited Disney+ release.
More recently, the animated film "Strange World," starring Jake Gyllenhaal and Dennis Quaid, cost the company a reported $200 million after it opened to dismal reviews during last year's Thanksgiving period. It was one of the worst flops of 2022.
Industry watchers blamed the misses on poor marketing plans and audience confusion over which titles were theatrical exclusives and which were streaming-only releases on the company's Disney+ platform.
TD Cowen's Creutz added that demand for animation "has definitely gone down" post-pandemic, driven by the excess of kids content on streaming platforms.
"The only animated films that have done well since pandemic have been big sequels. ... Disney's pipeline didn't have any sequels in it," he said.
Thanksgiving struggles
But it's not just Disney that's struggled. The Thanksgiving box office as a whole has been on a decline since 2019.
The pre-pandemic box office delivered more than $250 million in domestic ticket sales each year, according to Comscore data. Since then? It hasn't even been able to reach the $150 million mark.
It's possible "Wish," along with the debut of Apple's "Napoleon" (AAPL), could help boost this year's results — although the box office likely won't reach those $250 million-plus numbers for some time.
Still, "I do think we'll still continue to see studios try to revitalize the Thanksgiving box office because it has always been so important," Robbins said.
The analyst noted that the end of the Hollywood strikes, coupled with improved content pipelines post-COVID, should help boost attendance. "It's not going to be easy, but I absolutely think it's possible," he said.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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