Disney (NYSE: DIS) killed it at the box office this year. Star Wars: The Force Awakens, Zootopia, Captain America: Civil War, The Jungle Book…the first three grossed a billion worldwide, while the last film is almost at $900 million at the time of this writing. Then - Alice happened.
Alice Through the Looking Glass, to be precise. The movie opened over the Memorial Day weekend to a little under $27 million in the domestic marketplace, according to Box Office Mojo. Its production budget is a reported $170 million.
This isn't how the script was supposed to go. Instead, Alice was supposed to be on an unambiguous path to $1 billion worldwide, like its predecessor (or, some very large number, anyway). While its international numbers are a little better, the film is nevertheless not a hit.
As a shareholder of Disney, I don't fault the company for trying to compete during the traditional debut of the summer box office season. Fox put up a strong piece of celluloid with X-Men: Apocalypse, and considering that the latter was based on a Marvel product, Disney could certainly take some solace. One might argue that Disney should have stayed away from the blockbuster, but there are only so many prime release dates on the calendar, and risks just sometimes have to be taken.
Where Disney might be criticized a little is in its choice of the Alice sequel as its Memorial Day offering. Looking at the cinematography in the trailer, it seemed to me that the film might have worked in a different time frame, maybe in the fall, or, as was the case with the first Alice movie, in early March. Of course, Disney had Zootopia and Book to think about this year, so that presented a problem; maybe Alice could be programmed in February.
Unfortunately, like Tomorrowland last year, Alice just didn't capture the imagination of moviegoers. The business of storytelling on film is obviously hit-or-miss, but Disney has developed a reputation for very scientifically determining what its target demographic wants, and when it wants it. A lot of thought supposedly goes into the process of developing and releasing a Disney project. So, what is going through the minds of Disney execs in reaction to the domestic failure of Alice?
Here's what should be going through their minds: The company's upcoming Steven Spielberg fantasy, The BFG, should be concerning. It looks like a hit, doesn't it? Anyone who has seen the trailer can detect the director's exacting display of wonder, thrill and magic that every frame and every syllable of dialogue will attempt to convey to a multi-quadrant audience.
In total honesty, though, doesn't it have the same feel as Alice? Doesn't it look as if the two movies could have switched places - i.e., the character of Alice, instead of fighting Time (or whatever she did in the movie), could have instead dealt with giants in Wonderland? Couldn't the directors of these two films have swapped projects and produced the same nearly-identical project?
I would therefore, if I possessed the power of a Disney marketing exec, review very carefully the competition coming out around BFG, the tracking on the film, and all the trailers online and all the social media programs in place, and start to think about adjustments. Since Alice failed, BFG has to perform; make that, it has to over-perform. The B now has to stand for billion-dollar-franchise. Of course, this isn't a film totally brought to fans by Disney; Walden Media and Spielberg's Amblin Entertainment are involved, so I'm not certain how ownership of the movie will affect what entity might have the privilege of distributing future sequels. Nevertheless, no matter what percentage of the profits Disney might be taking, and no matter whether it releases more films based on this universe, the present is all that counts, and after a recent box-office stumble from a studio division that has been praised and highlighted by both media observers and Disney's own Robert Iger (check out the closing comments the CEO made at the recent earnings conference call to get a sense of how proud the company is of its motion-picture business), BFG has to open big and get as close to $300 million domestic as possible. Granted, in between now and the release date for the Spielberg film (July 1), Pixar will release Finding Dory, and that will help to cancel out Alice; still, BFG is what Disney should be thinking about.
Perhaps, for future Memorial Day weekends, the company will program stories that, for one reason or other, might seem more apt for the summer season; maybe one of those derivative tales-from- Star-Wars adventures might be appropriate, or something along the lines of Pirates of the Caribbean; even a Pixar cartoon might make more sense. The movie business cannot be reliably predicted, so it is important to remember that any release date contains a potential for risk and reward, even if the date is crowded with, or free from, big-studio/big-brand competition.
Disclosure: I am/we are long DIS.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.