by Ray Keating
Analysis
DisneyBizJournal.com
June 24, 2024
It feels like the good old days, which weren’t that long ago. What do I mean? Disney/Pixar has a big hit on its hands.
Critics and audiences love Inside Out 2, and people are shelling out dollars (as well as foreign currencies) to watch in theaters.
Over at RottenTomatoes.com, critics love the movie (91% fresh), while audiences love it even more (96% fresh).
And then there’s the box office gross. Over at BoxOfficeMojo.com (on June 24), the worldwide gross for Inside Out 2, which was released on June 14, registered $724.4 million. That included $355.2 million domestic and $369.2 international.
Nice.
But what about those pesky runaway costs plaguing Disney? Well, it’s widely reported that Inside Out 2 carried a whopping production budget of $200 million. Yikes.
Once more, we need to do a little more digging. First, marketing/promotion costs have to be factored in, which can run anywhere from 50 percent to 100 percent of a production budget. Assuming a midpoint, then marketing/promotion costs would come in at roughly $150 million. That puts the total cost of Inside Out 2 at $350 million. Gulp.
Next, we need to isolate the studio’s take of both the domestic and international box office. As DisneyBizJournal has noted before, various industry reports point to studios taking in about 55 percent of the domestic box office, and anywhere from 20 percent to 40 percent of foreign ticket sales. As always let’s assume the best case. Therefore, 55 percent of the domestic $355.2 million and 40 percent of the international take of $369.2 million indicate a Disney share of the gross box office for Inside Out 2 at $343.1 million ($195.4 million domestically plus $147.7 million international).
Amazingly, that puts Inside Out 2, with a current gross box office of just about $725 million at a breakeven point right now for Disney. Now, this is a movie that apparently will have legs, so Inside Out 2 will prove to be profitable for Disney during its theatrical run.
At the same time, however, the numbers on this movie, once again, speak to Disney’s inability to control costs on its movies (and streaming shows). Inside Out 2 is a clear hit, so the cost issue hurts less. But it hurts, nonetheless. The notion that Disney, and much of Hollywood, must spend extravagantly to produce quality movies is absurd. The industry’s history shows otherwise, and the leaps forward in technology in the movie-making business should eventually reduce costs.
You can’t keep betting on hits the size of Inside Out 2 to deal with costs. It’s just not realistic – especially during creative lulls like the one Disney has been struggling through of late.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
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