Disney is Changing the entire Hollywood Rules with Star Wars The Last Jedi

Pay attention to Disney’s moves, because as Hollywood’s most powerful studio, it’s leading the way to the future.

Disney is flexing its muscles in the marketplace. The studio is not only launching a new streaming site to compete against Netflix, but demanding from domestic exhibitors a firm 65% aggregate movie rental — the percentage of ticket sales that theaters return to studios — for Star Wars The Last Jedi. This is yet another sign of the top-ranked studio’s confidence and assertiveness.

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There’s reason for cock-of-the-walk status. Over the last two holiday seasons, Disney’s first two new movies in the Star Wars saga amassed almost $1.5 billion in domestic gross, in both cases the greatest release of their respective years (on the all-time adjusted charts, #11 and 57).

Disney’s bold move underscores its proximity to becoming more powerful than any studio in the history of Hollywood. And it comes as their triumphant brand label strategy seems impossible to replicate for the foreseeable future.

The company is all over the news, with the strong opening of Thor Ragnarok, their brief banishment of the Los Angeles Times media from screenings due to negative coverage of the studio’s Anaheim theme park Disneyland, their proposed sky-high film rental terms for Star Wars The Last Jedi and now the possibility of a takeover of key assets from 21st Century Fox, including their television and movie production and distribution entities.

The strategy behind that move is unclear, although buttressing their international prowess remains a key motive. These Fox discussions (that may or may not prove productive) come at a time when Disney is perhaps the most dominant studio ever. (The conglomerate boasts other media holdings and resorts/parks.)

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Here’s what distinguishes Disney from its competitors.

Disney will win total market share for the second straight year

While they are currently ranked second for the year, behind Warner Bros. (17 per cent to the other Burbank studio’s 20), they will dominate the rest of the year, and by December 31 the grosses of Thor Ragnarok (perhaps $175 million), Coco ($250-300 million) and the first weeks of Star Wars The Last Jedi (at least $450 million) could add up to $900 million in additional gross, putting them at around $2.4 billion for the year.

They are currently about $250 million behind Warner Bros., which has the D.C Comics juggernaut Justice League ahead as well as the comedy Father Figures ahead. Disney will easily overtake them.

That would grant Disney the top spot for two consecutive years, and both over 20% (they set an industry record at 26.3% for 2016, beating Universal, which topped a 1/5 share in 2015 for the first time in history). Disney should also end up between 21 and 22 per cent. Anything over 21.3 per cent would make it the second highest share ever.

They will win with only eight releases

The lowest number ever from a studio in the #1 share position is 13. Most years it is double that or more. Warner Bros. will have 18 new releases by comparison to Disney’s eight.

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It was little noticed at the time, but Disney succeeded to go a third of the year — four months — without a single new movie. From mid-June (Cars 3) until Thor Ragnarok this past weekend, nothing was in release.

This is the apotheosis of what most studios have been heading toward. Disney Studios have turned into the equivalent of their parks. They own Pixarland (Cars 3, Coco,), Marvel World (Guardians of the Galaxy Vol. 2, Thor Ragnarok), Fairytale Village (Beauty and the Beast) Disneyworld (in-house animations like Moana), even a long-running series named after a ride (Pirates of the Caribbean). And currently the greatest asset of all — the Star Wars saga.

The studio has honed down their release schedule to a handful of high-end projects with worldwide appeal, rarely if ever standalone (their live- action fairy tales are more or less a series). When they go with a non-franchise film, it’s a top-end event (A Wrinkle in Time next year).

If projections play out for the rest of the year, they should end up with five of the ten biggest grossing titles, including the top two and three of the top five (The Last Jedi, The Beauty and the Beast and Guardians of the Galaxy Vol. 2) if not better.

Their tentpole emphasis means they are abandoning other lower-profile genres

Among the highlights of 2017 domestically have been It (horror film), Get Out (Hitchcockian race-themed thriller) and Dunkirk (older audience historical epic). Disney is no longer interested in those market niches.

As usual, Disney’s aim for the Oscar race is mainly animation and tech recognition, in a year when monsters like Get Out, Dunkirk, and Wonder Woman look to raise studio involvement to a beyond-average level.

That means Disney needs to win commercially with their expensive films. That is working. Universal is scoring with high-end franchise like Fast and Furious, Despicable Me and its sequels, but also cheap genre titles, namely Get Out and Split. Warners has expensive D.C. Comics tentpoles but also the major profit maker It. They and others mix franchises and originals. Disney has doubled down on a far more narrow emphasis.

There’s no question that more times at bat increases the chance for a breakout success. But Disney’s strategy manages to save money. Every wide release, whether the production budget is $5 million or $250 million, requires an expensive marketing and distribution outlay (for domestic $25 million or more low end). So that adds huge costs to a large slate packed with titles.

Until lately, studios maintained a regular flow of product via their pipeline since they felt it most effectively utilized their distribution staff and kept theaters dependent on them year round. But Disney has changed this model. Certainly, the downturn in box office starting in July equaled the studio’s absence from screens. At the end of June (two weeks after Cars 3) year to date was actually slightly up. After two months of no Disney films, down 6.3 per cent. September with It 2017 improved things, but October brought another down tick. The mighty Disney slate for the rest of the year will somewhat improve things, but not enough to match last year’s total. The message is clearly expressed: exhibitors can’t live without Disney.

Watch Disney full HD free movies online here: http://freemv.online/movies

Disney is Changing the entire Hollywood Rules with Star Wars The Last Jedi
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