Disney Headlines for June 28th, 2023
This week, we talk about the Toy Story 3 lawsuit that won’t die and the premature judgment on some films.
There’s Lotso controversy in this week’s Disney Headlines.
Lotso Bear in Hot Water
Do you love Lots-o-Huggin’ Bear? How could you not?
Sure, the bear tried to kill all your beloved toys in Toy Story 3, but he smells like strawberries! And he’s so fluffy!
Disney has made a mint from Lotso merchandising, much to the chagrin of Randice-Lisa Altschul of Diece-Lisa Industries.
Altschul is a fascinating entrepreneur, having created and sold toys that made her a million by the age of 26.
The “serial inventor” has licensed more than 250 products in her career, including the world’s first disposable cellphone.
Altschul reportedly lost most of her money due to a swindle from one of her financial advisors, which led to her working on a job for a while.
During what would have been a dark time, Altschul came up with another idea for a saliva-based glucose test for diabetes.
We’re talking about a bona fide genius here…who happened to create and owns intellectual property rights for a wearable Lots of Hugs bear.
Lotso Goes to Court
Disney didn’t license this bear for Toy Story 3, instead creating its own “new” intellectual property, Lotso.
Obviously, Altschul deemed this copyright infringement and sued. As a reminder, Toy Story 3 debuted in theaters in 2010.
So, you can imagine how long this court battle has been underway.
Previously, Disney thought it had won once and for all due to a legal doctrine known as the Rogers test.
Altschul challenged up to the Supreme Court, who just agreed that the Rogers test shouldn’t have been applied in this way.
The Supreme Court has kicked the case back to the 9th U.S. Circuit Court of Appeals…and for reasons that have little to do with Disney.
In a different ruling, the Supreme Court diminished the scope of the Rogers test.
According to Reuters, “The Supreme Court reined in the Rogers test earlier this month when it decided that the First Amendment did not protect a “Bad Spaniels” vinyl chew toy that parodies Jack Daniel’s branding.”
So, a company selling a dog toy that looks like a Jack Daniels bottle may cost Disney millions of dollars. That’s what has happened here.
The circuit court will reevaluate whether the narrower scope of the law changes the previous ruling. If so, Disney must pay Altschul.
I guess we should all wish Disney – I apologize in advance – Lotso luck.
Disney at the Box Office
When I wrote about box office for a living, I’d perform a lot of interviews wherein people would pick my brain about the industry.
I developed a reputation as being notorious for replies like, “I think…but nobody knows for sure.”
The average person prefers a definitive answer, even if it’s wrong, to an ambiguous one.
Lately, I’ve thought about that a lot as I’ve stressed a “wait-and-see” approach to 2023 box office.
Everyone wants the cinema to return to the way things were before the pandemic, but we’re just not there yet.
Most movies fail at the box office at the moment. That’s the harsh reality of the business now, but it’s not fun to admit or discuss.
However, we’ve got a second factor with Disney, wherein some genuinely weird people WANT the company to fail.
I cannot imagine how they’ve reached a point in life where anyone could hate the company whose stories delighted them as children (and usually beyond).
Recently, a rumor has circulated that Disney has allegedly lost a comical amount of money on films that Deadline calculated were among the most profitable of 2022.
That’s the kind of logic we’re discussing here…in that there isn’t any. According to the person’s math, Disney films earned $1.8 billion.
You can check a website a friend of mine helped build, The-Numbers.com, and see that Marvel’s last four movies grossed more than $3 billion.
So, this person’s claim isn’t even in the ballpark of the truth.
The Redemption of Disney Box Office
But Disney did face a worrisome truth with two of its most recent releases.
The Little Mermaid’s opening weekend, especially its international box office, was disappointing.
As I mentioned at the time, review bombing in international markets deflated the film’s performance overseas.
One service described the strange phenomenon as “ratings terrorism.”
Over time, word spread about the underlying quality of The Little Mermaid, which is a very good film.
Not coincidentally, the film’s worldwide box office has gradually expanded into a fascinating new position.
There’s a real chance The Little Mermaid makes money during its theatrical run, which is something I wouldn’t have believed possible after opening weekend.
As a rule of thumb, a film needs to earn a factor of 3 or 3.5 more than its box office to make money during its theatrical run.
Historically, studios haven’t worried about this fact because a film’s release has worked as a glorified marketing campaign for home video.
The market has changed dramatically during the streaming era, which explains why so many parties are worrying about revenue right now.
Still, one box office law applies here, and that’s how much more domestic box office matters to a film’s bottom line.
I’ll spare you the details, but countries want their revenue to stay at home. So, they tax and create revenue-sharing agreements with this goal.
Films always want to earn most of their revenue in North America. It just doesn’t happen much these days…but it has with The Little Mermaid!
Oh, By the Way…
The film has earned more than $270 million domestically, with Disney probably retaining around $165 million of that.
Overseas, The Little Mermaid has still struggled a bit, but its $230+ million is better than anyone expected after opening weekend.
Even a pessimistic estimate of Disney retaining $70 million of that would give the studio $235 million on a $200 million production.
Disney has marketing expenses it has yet to recoup, but it’s gonna do that soon, as the July 4th holiday week inflates all box office.
Speaking of which, Elemental has also surpassed the entire box office run of Onward and appears poised to earn $100+ million domestically.
Nobody is reporting that story with the fervor of Elemental’s opening weekend disappointment.
What’s the point here? Films run in theaters for a while. We should stop judging them with finality after three days.
Also, rumors of the death of Pixar at the box office have been greatly exaggerated…and largely by that same group that hates Disney for some reason.
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Feature Photo: Disney/Pixar