‘Toy Story 4’ Box Office Debut Bodes Well for Home Video

Disney/Pixar’s Toy Story 4 quietly opened with a reported $118 million gross at the North American box office — on par with the 2010 opening weekend for Toy Story 3, which went on to generate $415 million domestically.

The fourth installment of the animated toy-talking franchise, which began in 1995 with Tom Hanks and Tim Allen supplying the voices to memorable characters Sheriff Woody and Buzz Lightyear, respectively, and Randy Newman’s Oscar-nominated soundtrack, continues Disney’s theatrical success following Captain Marvel, Avengers: Endgame and Aladdin.

The title also portends success for Walt Disney Studios Home Entertainment, which has established a lucrative business selling “Toy Story” DVD and Blu-ray Disc units, among other formats.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The original Toy Story — directed by John Lasseter — ranks the 8th best-selling VHS title with more than 19.5 million units sold for $463 million in revenue (based on inflation) since its Oct. 29, 1996 retail release. It was also released on Laserdisc.

It is the 12th best-selling home entertainment release with 5.65 million combined DVD/Blu-ray Disc units sold since its March 20, 2001, DVD release and Blu-ray on March 23, 2010.

The title was released on the defunct Universal Media Disc (UMD) format on Sept. 6, 2005.

Toy Story 2 was released at retail in 1999, with a special edition re-release on Jan. 11, 2000. It generated $42.2 million in domestic DVD sales; $16.3 million in Blu-ray.

Toy Story 3 sold 10.8 million discs for $192 million in revenue, and was the No. 2 selling disc in 2010. Overall, the title sold $184 million worth of DVDs and $53.2 million on Blu-ray, according to The-Numbers.com.

Indeed, when asked whether franchise films such as Toy Story 4 would be fast-tracked to Disney’s pending subscription streaming service, Disney+, CEO Bob Iger told CNBC in April that there was little financial incentive to do so.

“Don’t forget, in that [home video] window after it’s available in first theatrical run, these movies will be available for a form of rental or download or purchase,” Iger said. “Physical copies are still being sold.”

Disney to Join Growing Hollywood Bandwagon Ceasing Operations in Georgia Should Anti-Abortion Ban Take Effect

The Walt Disney Co. could join Netflix and other Hollywood actors and production companies who say they would stop working in Georgia should a recently signed anti-abortion law take effect on Jan. 1, 2020.

Speaking to Reuters, Disney CEO Bob Iger was asked if Disney would continue to make movies (Black Panther) and TV shows in the state should statewide legislation outlawing a woman to abort her pregnancy after six weeks become law. Georgia currently bans abortions after 20 weeks.

Georgia Gov. Brian Kemp signed the legislation on May 8.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“I think many people who work for us will not want to work [in Georgia] and we have to heed their wishes in that regard,” Iger said. “Right now we’re watching it very carefully. I don’t see how it’s practical for us to continue to shoot there.”

Disney’s possible departure from Georgia could be a major blow to the state’s lucrative film business, which employs thousands and generates billions in annual revenue by offering studios generous tax incentives.

In addition to Panther, Marvel Studios Avengers: Endgame, Captain America: Civil War and Guardians of the Galaxy 2, among others, filmed in the Peach state.

Disney’s possible pullout of Georgia is reminiscent of a similar ploy when Georgia lawmakers attempted to ban same-sex marriage within the state.

Disney came out against the proposed legislation, claiming it was an affront to personal civil liberty.

“Disney and Marvel are inclusive companies, and although we have had great experiences filming in Georgia, we will plan to take our business elsewhere should any legislation allowing discriminatory practices be signed into state law,” a spokesperson said at the time.

Then Georgia Gov. Nathan Deal quietly vetoed the legislation.

Bob Iger: Disney Prepared to ‘Pivot’ in New Direction with Hulu Ownership

Disney’s acquisition of Comcast’s 33% stake in Hulu for total control of the SVOD platform is part of the Mickey Mouse company’s move toward engaging with consumers directly, CEO Bob Iger told an investor group.

The transaction also enables Disney to roll out Hulu and Disney+ internationally unfettered by possible conflicts with Comcast’s ownership of Sky and streaming service Now TV.

Speaking May 14 at the 6th Annual MoffettNathanson Media & Communications Summit in New York, Iger said full control of Hulu (and Hulu with Live TV) coupled with ESPN+ and Disney+ streaming service (launching Nov. 12) would enable the company to target consumers separately through sports, TV content and movies, or collectively in a digital bundle.

“Managing your customers seamlessly across platforms, I think, has real value,” Iger said. “We have the ability to leverage the content engines in the company [Fox, FX, ABC, Disney, etc.] in a significant way here.”

For example, the executive envisions content creators such as FX and ABC producing programming for streaming on top of their pay-TV and broadcast channels.

“There’s a lot to this [internal synergies],” he said.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Iger said his focus on direct-to-consumer distribution occurred on a “fateful” day in August 2015 when he claimed to be “rather candid” on an earnings call about the state of the pay-TV ecosystem, and ESPN in particular.

“We were seeing the disruptive effect of technology on traditional businesses,” Iger said, adding that none of the Disney business units (i.e. movies and TV shows) at the time — outside of the Disney Store and theme parks — interacted with the consumer directly.

“We decided we should be in the direct-to-consumer business,” he said, adding that theater operators, pay-TV operators, big box stores and ecommerce platforms have “known and owned” the Disney customer.

“We didn’t and we thought it was a big hole in terms of the company’s value proposition,” Iger said.

That realization prompted Disney to make an initial investment in BAMTech, which later (2017) morphed into complete ownership of the streaming tech company powering HBO Now, MLB.tv and NHL.tv, among other OTT platforms.

“Knowing essentially who [Disney’s consumers] are, we think we can create more value for the company and for them,” Iger said.

Streaming Red: Disney’s OTT Venture Down a Fiscal Black Hole

NEWS ANALYSIS — Disney bought Marvel Studios in 2009 for $4 billion. It bought Lucasfilm (“Star Wars”) for another $4 billion three years later.

The acquisitions helped Disney reign supreme at the box office in 2018, 2017 and 2016, according to data from BoxOfficeMojo. And it has a commanding lead in 2019 thanks to Avengers: Endgame.

At the same time, the Mickey Mouse company is set to lose more than $2 billion on streaming investments — “Disney Streaming Services” (formerly BAMTech), Vice Media, ESPN+ and Hulu — before it even launches its much-ballyhooed new $6.99 monthly SVOD service Disney+ in November.

Earlier this year, Disney CFO Christine McCarthy said ESPN+ is projected to lose $650 million annually through 2020. The company just wrote-off more than $300 million on its minority stake in Vice Media.

And the much-hyped Disney+ SVOD platform is not projected to become profitable until 2024 — three years after CEO Bob Iger plans to retire.

“Streaming requires a strong stomach for losses, especially as you are playing catch-up,” Rich Greenfield, analyst at BTIG Research, told CNBC earlier this year.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Down the OTT Rabbit Hole

As Disney saw Netflix growing exponentially worldwide — much of it based on streaming movies and TV series based on Marvel intellectual property, it switched its business focus from SVOD enabler to over-the-top provider.

Indeed, Iger says OTT video is the company’s No. 1 focus in 2019, regardless of the financial hits to the bottom line.

Hulu, which Disney majority owns along with Comcast, lost $580 million in 2018, while BAMTech, the backend tech firm acquired from Major League Baseball Advanced Media in 2017, spearheaded another $470 million operating loss for the company’s new direct-to-consumer and international operating unit (which also includes home entertainment).

And the fiscal hits continue.

DTC & International lost $393 million in the most-recent fiscal quarter (ended March 31), up from $188 million loss in the previous-year period. Through the first half of the fiscal year, DTC has lost $529 million, twice as much was lost in 2018.

“We expect our direct-to-consumer businesses to have an adverse impact on the year-over-year change in segment operating income,” McCarthy said in an understatement on the May 8 fiscal call.

Disney, of course, can arguably absorb the losses. It generated a $12.5 billion profit on almost $60 billion in revenue in 2018. That was before closing the 21st Century Fox transaction, which could help Disney reach $100 billion in revenue.

At the same time, the Fox acquisition upped Disney’s long-term debt from $18 billion to about $52 billion. Disney is also expecting about $2 billion of cost synergies absorbing 20th Century Fox Film Corp. and related businesses.

Thus far, Wall Street appears supportive, contending the Disney brand has the best chance of narrowing the SVOD divide with Netflix.

“I think Wall Street is at least accepting of the fact that we’re doing this, that it’s the most important thing we’re doing,” Iger told Barron’s in January. “And while I won’t say they’re cheering us on, they’re definitely giving us the room to prove that we can do it.”

Marvel Studios ‘Avengers: Endgame’ Streaming on Disney+ Dec. 11

The Walt Disney Co. May 8 announced it would make the current theatrical blockbuster Avengers: Endgame, from Marvel Studios, available on its pending direct-to-consumer streaming video platform Disney+.

Disney CEO Bob Iger said the $2.2 billion (gross to date) movie would be available on Disney+ Dec. 11 – one month after the platform’s November launch.

Avengers: Endgame has generated $644.5 million in domestic ticket sales in just 12 days of release.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Iger previously announced the SVOD service would launch with Marvel Studios’ Captain Marvel, starring Brie Larson, in addition to Black Panther and other studio hits.

Iger said Disney “did some deals” with third parties (including Netflix) to expedite the return of select titles under license agreement. He said the company remains in discussions about assuming control of other titles still under license agreement.

“We continue to explore ways that we might be able to get more back,” he said, adding that the film slate announced on its investor day already included some of the titles — notably Black Panther and Captain Marvel.

Iger said that the original landmark license deal with Netflix for its original theatrical releases included a window for early release of some titles.

“When we did the Netflix deal … even though at that point it was far off, the possibility that one day we might want to launch our own service, we carved the ability to run films on such a service,” he said. “And it paid off.”

Separately, CFO Christine McCarthy said that despite Endgame‘s impressive box office run, the film’s profitability would be initially tempered by more than $350 million in production costs, excluding marketing and theatrical revenue sharing.

Disney Re-Names BAMTech ‘Disney Streaming Services,’ Outlines Direct-to-Consumer Strategy

Disney April 11 announced it has renamed its BAMTech backend technical company “Disney Streaming Services” as part of the 96-year-old media giant’s expansion into direct-to-consumer business.

Acquired for $2.5 billion in 2017 from Major League Baseball Advanced Media, BAMTech has powered numerous OTT services, including HBO Now, MLB.tv, PGA Tour Live, ESPN+, and NHL.tv, among others.

“This is an exciting day for the entire Disney family. It is also a challenging time,” CEO Bob Iger told attendees at the start of a three-hour investor day presentation in Los Angeles.

Subscribe HERE for the FREE Media Play News Daily Newsletter!

The executive reiterated that Disney is entering the DTC ecosystem from a “position of strength, confidence and unbridled optimism.”

Iger said Disney is banking its future in part on digital distribution, including a new corporate segment — Direct-to-Consumer & International — featuring the pending Disney+ SVOD service, ESPN+, Hulu, Hulu with Live TV and Asia’s Hotstar ad-supported VOD platform with 300 million actively monthly users.

Kevin Mayer, chairman of DTC & International, said Disney’s foray into digital is based in part of a projected 1.1 billion high-speed Internet households worldwide by 2020 compared to 700 million in 2015.

Mayer said there will be 810 million DTC paid subscribers globally by the end of 2020 — growing 30% annually. With 1.2 billion hours of video streamed daily projected by 2020 compared to 260 million hours in 2015 — up 50% annually over a 10-year period.

[DTC] is becoming a crowded marketplace, in which brands matter more than ever,” Mayer said. “We have the brands that matter most when it comes to great entertainment.”

Mayer said Disney three domestic DTC products — Disney+, ESPN+ and Hulu — would target different market segments as standalone services and “likely be bundled to create even more value to consumers.”

Disney is eyeing a Latin America launch for ESPN+ as well.

Launching in November, Disney+ will feature catalog, current and original content from Disney, Marvel, Pixar, Lucasfilm and National Geographic — the latter due to Disney’s $71.3 billion acquisition of 20th Century Fox.

Mayer said Hulu, which Disney assumed majority ownership stake following the Fox acquisition, represents Disney’s most-established DTC product.

“We’re actively evaluating international rollout strategies for [Hulu],” he said.

Disney said Hulu was the fast-growing domestic SVOD service in 2018, ending the year with 25 million subscribers since launching in 2008. Online TV service — Hulu with Live TV — launched in 2018. Viewing increased by 75%.

“Hulu is going to give consumers the right product at the right price,” said Hulu CEO Randy Freer.

A Lot Riding on ‘Disney Plus’ Unveiling

NEWS ANALYSIS – Much like Apple’s recent Apple TV+ media event, Disney’s April 11 investor unveiling of its branded Disney+ subscription streaming service promises to be the digital media story of the day.

CEO Bob Iger has said the over-the-top video product slated to launch in November is the media giant’s top priority in 2019.

In short, Disney is betting billions on the distribution channel – a strategy that included removing branded content (and sacrificing millions in license revenue) from pay-TV operators, Netflix and even theatrical.

Subscribe HERE for FREE Daily Newsletter!

Disney got the ball rolling in 2017 when it acquired backend streaming provider BAMTech from Major League Baseball Advanced Media for $2.5 billion. The company has powered numerous OTT services, including HBO Now, MLB.tv, PGA Tour Live, ESPN+, and NHL.tv, among others.

That acquisition, in addition to investment in ESPN+ and Disney+ resulted in an increased fiscal loss of $136 million in the most-recent fiscal period for Disney’s direct-to-consumer & international segment. That compared to a loss of $42 million during the previous-year period.

The DTC segment generated a fiscal loss of $738 million in 2018, up from a loss of $284 million in 2017.

Disney needs Disney+ to succeed where its previous OTT attempt, DisneyLife, has stumbled. The $13 monthly SVOD service launched in the U.K. in 2015 and briefly in China before being shut down there by the government.

DisneyLife in the U.K. reportedly has been challenged by a lack of original content and branded movies licensed to third-party distributors such as Sky. As a result, Disney is holding back current theatrical hit Captain Marvel from the pay-TV window for Disney+.

“In all cases, the results [for DisneyLife] were bleak,” according to Bernstein Research as reported by The Wall Street Journal. “It might even be described as a ‘failure.’ ”

Regardless, Disney+ plans to launch anchored by the “Star Wars” and “High School Musical” franchises. Jon Favreau is directing a Star Wars spin-off series, “The Mandalorian.” A series based on Monsters, Inc. is in the works as well.

Interestingly, Kenny Ortega — producer/director of “High School Musical” — just signed a production deal with Netflix.

NATO Boss Chides Press for Streaming Video Focus

NEWS ANALYSIS — Helen Mirren may have gotten the most attention at this week’s CinemaCon confab in Las Vegas for her snarky, “I love Netflix, but f*** Netflix,” comment.

But for John Fithian, president of the National Association of Theater Operators, media attention to over-the-top video and home entertainment is no laughing matter. Fithian reportedly told reporters that continued attention to streaming undermines success at the global box office, which topped $41.7 billion in 2018 – up 32% since 2010.

NATO president John Fithian

“There’s no doubt that home entertainment consumption moves toward streaming [from disc] more with each passing day,” Fithian told attendees. “How does any given movie stand out among endless choices in the home? A robust theatrical release provides a level of prestige that cannot be replicated.”

He cited a study conducted by Ernst & Young that found consumers who frequent movie theaters consume more streaming video in the home.

“Streaming and theatrical don’t just co-exist, they reinforce each other,” Fithian said.

Subscribe HERE for FREE Daily Newsletter!

Of course the executive was channeling Netflix, which didn’t attend CinemaCon, but whose looming industry presence continues to undermine the theatrical window releasing movies into streaming channels concurrent with any cinema exhibition.

The practice has roiled exhibitors in the U.S. and France, which have boycotted Netflix movies and challenged its award nominations, notably at the Cannes Film Festival. Regardless, the Motion Picture Association of America recently accepted Netflix among its studio members.

Indeed, Netflix is hardly the only streaming threat. With Disney, WarnerMedia and Comcast set to launch branded SVOD platforms, direct-to-consumer distribution and original content remains a threat — a reality Disney CEO Bob Iger has taken steps to address by insisting the perennial domestic box office leader will remain faithful to the theatrical window.

“We have a studio that is doing extremely well and a [release window] formula that is serving us really well in terms of its bottom line,” Iger said on last November’s fiscal call.

With Kevin Tsujihara out at Warner Bros., efforts to release studio films early into homes through premium VOD are likely over.

Tsujihara, who was forced out following a sex scandal, was initially promoted to the chairman position in large part because of his expertise advocating for alternative distribution channels while heading Warner Bros. Home Entertainment.

Disney’s Iger Cites ‘Historic Day’ Closing Fox Acquisition

Following the official completion of the Walt Disney Co.’s $71.3 billion acquisition of 20th Century Fox Film Corp. and related businesses at 12:02 a.m. ET March 20, Disney CEO Bob Iger sent out an internal memo to combined staff calling the deal “a historic day for our company.”

The histrionics of the merger are just beginning in what could reportedly result in the elimination of more than 4,000 positions.

“I wish I could tell you that the hardest part is behind us; that closing the deal was the finish line, rather than just the next milestone,” wrote Iger. “What lies ahead is the challenging work of uniting our businesses to create a dynamic, global entertainment company with the content, the platforms, and the reach to deliver industry-defying experiences that will engage consumers around the world for generations to come.”

Aside from the previously reported high-profile departure of 20th Century Fox Film chairman/CEO Stacey Snider, studio vice chairman Emma Watts, Elizabeth Gabler, head of Fox 2000, and Steve Gilula and Nancy Utley, co-heads at Fox Searchlight, are transitioning to Disney.

Other senior executives making the move include Andrea Miloro and Robert Baird, co-presidents, Fox Animation, and Vanessa Morrison, president, Fox Family. All report to Alan Horn, chairman Walt Disney Studios, and Watts.

In his memo, Iger called for patience during the integration process, which he said would impact some businesses more than others.

“We may not have answers to all of your questions at this moment, but we understand how vital information is and we’re committed to moving as quickly as possible to provide clarity regarding how your role may be impacted,” he wrote.

The deal includes 20th Century Fox, 20th Century Fox Home Entertainment, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox’s television creative units, 20th Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Networks Group International; Star India; and Fox’s interests in Hulu, Tata Sky and Endemol Shine Group.

As part of the deal, Disney has agreed to sell 21st Century Fox’s Regional Sports Networks.

Disney’s $71B Fox Acquisition Effective After Midnight

The Walt Disney Co. announced that its $71.3 billion purchase of 20th Century Fox Film Corp. officially goes into effect at 12:02 a.m. ET on March 20.

The deal includes 20th Century Fox, 20th Century Fox Home Entertainment, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox’s television creative units, 20th Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Networks Group International; Star India; and Fox’s interests in Hulu, Tata Sky and Endemol Shine Group.

As part of the deal, Disney has agreed to sell 21st Century Fox’s Regional Sports Networks.

Disney is also acquiring approximately $19.8 billion in cash and assuming approximately $19.2 billion of debt of 21st Century Fox in the acquisition. The deal price implies a total equity value of approximately $71 billion and a total transaction value of approximately $71 billion.

“This is an extraordinary and historic moment for us — one that will create significant long-term value for our company and our shareholders,” Disney CEO Bob Iger said in a statement. “Combining Disney’s and 21st Century Fox’s wealth of creative content and proven talent creates the preeminent global entertainment company, well positioned to lead in an incredibly dynamic and transformative era.”