‘Luca’ may go to Disney +, but Pixar’s future is in theaters

Still from the latest Disney Pixar movie “Luca”.

Disney

Along the clean white sand beaches and azure waters of the Italian Riviera, an unlikely friendship grows between two young sea monsters disguised as humans.

That’s the premise of Pixar’s latest feature film, “Luca,” which opens Friday on Disney +.

Since 1995, Pixar has released 23 other titles, setting the standard for animated films. His films have won nearly two dozen Academy Awards, including 10 for best picture, and have grossed more than $ 14.5 billion at the global box office.

“It’s hard to imagine [it’s been] 26 years since Pixar first opened its box of animated toys to the world, “said Paul Dergarabedian, Senior Media Analyst at Comscore.” From the first ‘Toy Story’ movie to ‘Luca,’ Pixar has left an indelible creative mark on animation art, earned a reputation for storytelling brilliance, and in the process, generated a worldwide box office fortune. “

Over the course of nearly three decades, Pixar has fundamentally changed the animation industry. He released the first fully computer-generated feature film in 1995 and revolutionized the way animated films were made. His stories were designed to entertain children and adults alike.

Disney acquired the studio in 2006, funneling millions into the brand’s coffers to produce and release more movies. Pixar became the favorite of the Disney company, revitalizing its animation channel, which had stalled at the box office.

But, nearly two decades later, Pixar animators are reportedly questioning their role in the ever-growing Walt Disney Company. They may not have to worry, analysts said. Animated films have had a strong track record at the global box office, which should persuade studios to continue releasing these features on the big screen.

The coronavirus pandemic accelerated studios’ broadcasting ambitions, altering the way certain films hit the market. Disney bypassed theaters in December to release Pixar’s “Soul” on Disney + for free, a move that employees at its prestigious animation branch hoped would be unique.

However, in March, the company said its next “Luca” would skip theaters and head straight to broadcast as well. Once again, Disney did not put the $ 30 opening access price on the film, something it had done for the release of “Mulan” and “Raya and the Last Dragon,” as well as part of the theatrical release of “Cruella.” and the next “Black Widow”.

The “Luca” strategy was developed when the studios were very concerned about the theatrical display. Only in the last month has the box office shown signs of revival. The momentum also comes as Disney has reorganized its media and entertainment divisions to focus more on digital offerings.

Disney + has always been the home of television series based on Pixar and Disney Animation properties such as “Monsters Inc.” and “Big Hero Six.” The strategy has also been used for the Star Wars and Marvel franchises.

For the most part, studios have postponed the release of animated films until movie theaters have reopened. Universal-owned animation studio Illumination, for example, delayed “Minions: The Rise of Gru” until 2022 to make sure it could be released in as many theaters as possible. After all, animated features can bring in hundreds of millions of dollars at the global box office and even surpass the billion dollar mark.

“I think a lot of people involved in feature film development are not happy with the direct approach to streaming,” said Eric Handler, media and entertainment analyst at MKM Partners. “If your compensation structure depends on the financial success of a movie, then cutting the first window, and the largest one, probably means less profit. Also, how do you define the benefit of a movie that is part of a subscription-based platform? “

Representatives for Disney did not respond to CNBC’s request for comment.

The big screen against the living room

In recent years, streaming players like Netflix have looked to animation as a way to attract new subscribers, particularly parents of young children. That could change the dynamics a bit, as streaming services seek to keep subscribers satisfied.

Although Disney was forced to put “Soul” and “Luca” on Disney + due to the pandemic, these films could easily have made hundreds of millions of dollars at the company’s box office. Disney diverted these movies to its streaming platform primarily because the coronavirus outbreak disrupted the development process and needed new content for its digital consumers.

“Throughout the pandemic, major media conglomerates have prioritized their streaming platforms as the key (top priority) growth engine of the future,” Handler said, explaining that movies became a tool to accelerate growth. subscribers.

Tina Fey and Jamie Foxx voice the characters in Disney Pixar’s “Soul.”

Disney

Disney + has certainly benefited from this. In May, the company said it had 103.6 million paid subscribers at the end of its second fiscal quarter. This was a feather in the cap for Disney, considering that the platform had only launched 16 months prior. The company expects to see between 230 million and 260 million subscribers on Disney + by 2024.

Still, the sizable budgets for movies like “Soul” and “Luca” mean that this digital release strategy is not sustainable. While shows like “WandaVision,” “Loki,” and “Monsters at Work” were budgeted for streaming debut, these Pixar features were created with the expectation that they would hit the big screen first.

“Since not all theaters are open yet, capacity restrictions are still in place, and not all age demographics are comfortable returning to theaters yet, studios need to be flexible with their films, especially since there aren’t many spaces. available for release in theaters. more movies in 2022, “said Eric Wold, senior analyst at B. Riley Securities.

As global markets continue to reopen and seating restrictions relax, there is an expectation that attendance will return to normal levels. Handler and Wold anticipate that Pixar releases will also return to theaters.

‘To infinity and beyond’

When it comes to the box office, Pixar has become one of the most consistent studios in the industry.

Since his first film, “Toy Story,” was released in 1995, his films have averaged $ 650 million at the global box office and four of his films have grossed more than $ 1 billion in ticket sales.

And the critical reception of his films has been equally constant.

The animation company has long been praised for its poignant and sometimes heartbreaking narrative. His films feature complex characters and rich universes. The study has answered timeless questions that populate children’s minds, such as: What happens to your toys when you leave the room? What if the monsters in your closet weren’t all bad? Where do our emotions come from?

Only seven of its 23 releases have scored less than 90% on Rotten Tomatoes, and only one movie, “Cars 2,” is considered “rotten” on the site, with a score of less than 60%.

“Pixar’s appearance on the Hollywood scene was a turning point if it ever existed,” said Shawn Robbins, chief analyst at Boxoffice.com. “Not just ‘Toy Story’ and those early films led a new era focused on [computer-generated] animation, effectively retreating the traditional style, showed that Disney’s in-house animators weren’t the only creative teams capable of making timeless animated classics. “

In fact, Pixar’s early success in movies like “Toy Story,” “Monsters Inc.,” “Finding Nemo,” and “The Incredibles,” which were co-produced with funding and distribution from Disney, led to then-CEO Bob Iger. to buy the company for $ 7.4 billion in 2006.

Tim Allen and Tom Hanks voice Buzz Lightyear and Sheriff Woody in Pixar’s “Toy Story.”

Disney

Pixar’s use of computer animation changed the game. This new method of filmmaking basically bypassed the need for hundreds of illustrators and significantly reduced the amount of time it took to make an animated film.

“It took hundreds and hundreds of people, highly skilled people, to make a piece,” said Frank Gladstone, executive director of ASIFA, an international animated film association. “In the traditional way of drawing and painting and photographing and all that, it took a lot of time and a lot of people. There were other animated functions, but for all intents and purposes of the big markets, it was Disney. “

In the decades before “Toy Story” was released, the box office saw only a handful of animated movie releases each year, and the dominant distributor for those movies was Disney. Now, there are dozens of animated movies from various different studios every year.

And as more content flooded the market, the Academy of Motion Picture Arts and Sciences took notice. It added a category to its annual Oscars for animated films only. Along with the prestige, there were huge box office profits, which inspired studios to continue to invest heavily in these projects.

In the years before Pixar entered the industry, animated films averaged only about $ 250 million to $ 350 million in ticket sales globally. Since 1995, nine animated films have surpassed $ 1 billion at the global box office and the average box office gross is around $ 740 million worldwide.

This blockbuster is hard for studios to ignore and is one reason analysts are convinced animated films will continue to debut on the big screen.

“It has become clear that most studios have been using some key titles to launch their streaming platforms, and that is likely no longer a priority going into 2022 and beyond,” Wold said.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Illumination, Dreamworks, and Rotten Tomatoes.

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