Opinion: Disney Can't Afford To Buy Any More Major Film Studios
Image credit: Rob Dobi, Variety
Tristan Young @talltristan
When we gaze upon the Skynet like horror wrought upon us by the AI overlords that control the final few conglomerates who dominate all of the world (safe money is on Apple, Google, and Amazon), we might regret being so hyped on Disney’s absorption of 20th Century Fox. The once thought impossible in scope merger further solidifies an alarming quantity of consumable media under a single banner. That concentration of power is problematic as it allows one actor to control too much of the market and therefore prices, among other seemingly more esoteric factors. Right now however, it’s hard to deny that this is all pretty cool! Who doesn’t want to see The Fantastic Four mingling with the Avengers on screen? Or the Vision tango with Silver Surfer? Or Iron Man going up against Magneto… that last one might be a bad idea.
There’s plenty of reason to be excited, and while Disney has no doubt done their homework on the cost/benefit analysis side of things, leading to what was probably a wise purchase (also an expensive one- 71.3 billion wow!), they’re about to run into a problem money can’t fix. With a truly intimidating roster of franchises primed for theatrical release, the only entity left to really compete with Disney is itself; and if they’re not careful they may lose. The House of Mouse is on the verge of unprecedented market saturation via their own properties that could result in cannibalization of revenue with each new release on the calendar. In other words, there simply aren’t enough weeks in the year to support much more than what Disney now has at it’s disposal. Not if it wants to maintain its theatrical revenue streams in its current form.
The average theatrical run time for a film is about 4 weeks. The heavy hitters like your Star Wars and Avengers last longer, but some are out in 2. The majority of a film’s revenue will be made before then, usually the first two to three weeks. Consider that the average box office drop off from week one to week two per theatrical release was 49.1% in 2012 (and considering it was 21.5% in the 90s and 15.7% in the 80s, 2019 numbers are probably a bit higher). Sometimes it’s that first week that will make or break a film. Studios aim for as low a second week drop as possible to establish the film has legs. If it can keep it’s drop within the low 40% range it will likely make the kind of money to ensure a proper return on investment over a proper 4 week run.
As of 2019 pre Fox merger, Disney had about 10 major releases for the year. This includes three marvel films, Star Wars, Toy Story 4, and a bevy of classics remakes. Note that it actually has a few more than 10, but the rest are fairly minor and don’t factor into this argument as much. That gives the big ones about 5.2 weeks per year of run time before the next Disney film drops. Easy. In this same year Fox has also about 10 films, including Alita: Battle Angel, Tolkein, Dark Phoenix, and New Mutants. Again, they have more than 10 but some are fairly inconsequential. If Disney owned Fox for the entirety of 2018 that would be 20 noteworthy major releases under its umbrella. That drops the run time for any film down to an average of 2.6 weeks before the next property they own hits theaters.
This is the future Disney is heading towards, where their own films are competing with themselves for the same dollars in perpetuity. This is before the X-Men franchise gets its third shot. Before Fantastic Four gets another reboot. Before the gratuitous onslaught of Avatar sequels finally gestates. If you think Episode 9 marks the wind down of Star Wars films, think again. Lucasfilm has confirmed a new trilogy by Rian Johnson (The Last Jedi) and another form David Benioff and D.B. Weiss (Game of Thrones). Kevin Fiege has claimed to have another decade of Marvel films ready to go, although it’s not clear if that includes the newly liberated X-Men and FF. Regardless, that’s a lot of movies! The years aren’t getting any longer either.
We are approaching a point of considerable diminishing returns for Disney if their films can only be undisputed box office champs for two weeks tops before their next tent pole film releases. Just because the Force Awakens made it’s first billion in only 12 days doesn’t mean their rest of the films couldn’t use a little more breathing room. One imagines a Disney board room where studio heads fight over who gets 10 day release window and who gets two weeks. This sounds pretty stressful. This particular dilemma doesn’t really impact us as the viewers- unless our eventual Orwellian Disney masters mandate some rule that requires we go to the movies twice a week which sounds pretty ok- but it highlights an interesting issue that money, influence, and market share can’t seem to circumnavigate. Through sheer volume of properties, Disney has cemented their unapproachable box office dominance likely for the next decade at least. However, if they wish get the most out of their films and to continue breaking box office records, they better cool it with studio purchases.