Disney looks for boost from upcoming films

[Melanie]

Disney looks for boost from upcoming films

By Claudia Eller
Los Angeles Times
Article Last Updated: 08/09/2008


HOLLYWOOD - Disney, experiencing one of the worst slumps at the box office in years, is counting on talking dogs and singing teens to turn things around.

When the Walt Disney Co. reported earnings July 30, the one glaring weak spot in an otherwise strong quarter was in the company's Studio Entertainment division, which encompasses the movie studio. Operating income plunged 49 percent and revenue was off 19 percent from a year ago mostly due to Disney's pictures performing below expectations.

With its newest release, ''Swing Vote'' succumbing last weekend to a landslide and ticket sales for the studio down nearly 30 percent this year, Disney is now in last place in box office market share - an unusual place for the company which is usually ranked at or near the top.

Disney is betting that won't last for long, however. Among the movies it believes will put it back on top this fall are ''Beverly Hills Chihuahua,'' about a pampered pooch from the 90210 ZIP code lost in Mexico, and ''Bolt,'' an animated film overseen by Pixar Animation Studios guru John Lasseter about a showbiz dog. Disney is also releasing ''High School Musical 3: Senior Year,'' the third movie in the pubescent franchise and the first debuting on the big screen.

The studio says one of the reasons for its weaker performance at the box office in the third quarter is that results in the year-ago quarter were extraordinarily high due to gains by last summer's blockbuster, ''Pirates of the Caribbean: At World's End,'' which generated $961 million in worldwide ticket sales. In addition, Disney made a strategic shift a couple years ago to release fewer movies annually, which potentially reduces its box office total.

Still, other than its current Pixar comedy ''Wall-E,'' which has grossed more than $200 million in the U.S., Disney hasn't hit one out of the park in seven months. Its biggest live-action bet, ''The Chronicles of Narnia: Prince Caspian,'' the second film in the franchise co-owned by Phil Anschutz' Walden Media, performed below expectations at $140 million domestically - less than half of what its 2005 predecessor ''The Chronicles of Narnia: The Lion, Witch and Wardrobe'' did and less than half the U.S. total that ''Pirates'' achieved.

And while the studio made some money on modest budget pictures such as ''College Road Trip'' and ''Step Up 2: The Streets'' and its Miley Cyrus' ''Hannah Montana'' concert movie beat expectations, those films' grosses paled next to those collected last year by the comedy ''Wild Hogs,'' the action sequel ''National Treasure: Book of Secrets,'' and ''Enchanted.'' ''What we're seeing is increased quarterly volatility from fewer film releases,'' said Laura Martin, a senior media analyst with Soleil Securities. She said that Disney's off-quarter was ''widely expected'' given the comparison to last year's ''Pirates'' sequel. Because Disney has a strong track record delivering franchise hits, the market does not penalize the studio when its movies hit a dry patch at the box office.

Disney Studios Chairman Dick Cook said that although box office races ''have their place,'' public companies such as Disney are ''judged on having a great return on capital.'' On that account, he said that the Studio Entertainment group - which includes worldwide theatrical, DVD, television sales of movies, stage plays and music earnings - is doing well.

''We're having the second biggest year in the history of the studio,'' said Cook. He noted that last year the division generated operating profit of more than $1 billion, and in the nine fiscal months of this year has earned $988 million.

Of course, much will depend on Disney's fourth quarter, which will include the lion's share of earnings from ''Wall-E,'' which was released one day before the end of the third fiscal quarter. Cook and his team are bullish about the films they have lined up between now and the end of the year, which also includes an Adam Sandler family comedy at Christmas, titled ''Bedtime Stories.''

The studio could have a much tougher time selling tickets to its upcoming fall release ''Miracle at St. Anna,'' a World War II drama directed by Spike Lee which is being touted for its award prospects.

Cook said that quarterly results are heavily dependent on when and which films are released in theaters and on DVD. Dates are selected for how movies will maximize audience, Cook said, and are not tied to the fiscal calendar.

[Faver]

The only film listed that I'm looking forward to is Bolt......hhhmmmm.... they may be in a slump

[NotaGeek]

OMG. They think Beverly Hills Chihuahua is going to pull them out of a slump?

[Melanie]

OMG. They think Beverly Hills Chihuahua is going to pull them out of a slump?

Pretty funny, right? I've not had the pleasure of seeing a preview, but listening to everyone here, it sounds like it's going to be an embarrassing bomb.

[Speedy1998]

The one problem I have with this article is that when they are talking about hits from last year they are talking about movies release throughout the year, not just the movies that came out in the first half of the year.

I would also like to note that just because you are not intrested in HSM3, does not mean that it will not do well. Millions of 6-15 year old girls are counting down to it's release.