Mass media and entertainment conglomerate The Walt Disney Company DIS has seen shares fall in 2023 amid worries about its box office, streaming platform and advertising revenue. The drop comes with former CEO Bob Iger back in charge of the House of Mouse.
Box office anxieties have been rife in 2023, and the recent revelation of a crucial milestone being at risk may further darken the news landscape.
What Happened: Disney has dominated the box office for years with hit franchises from Marvel, Star Wars, Pixar and Disney Animation. In 2022, the company had four of the top 10 grossing movies domestically and four of the top-grossing movies worldwide.
"Avatar: The Way of Water" stood as the company's highest-grossing film globally, raking in $1.44 billion in 2022. Achieving $1 billion in worldwide gross, the movie continued a significant tradition from Disney.
Since 2014, Disney has had at least one movie that made $1 billion at the worldwide box office, except for the 2020 and 2021 years which were severely impacted by the COVID-19 pandemic and saw many movies end up directly on streaming platform Disney+, as reported by Variety.
Despite having the second, fourth, fifth, and sixth highest-grossing films in the domestic market in 2023, along with several international box office successes, Disney's problem lies in the fact that these movies are underperforming compared to previous years, with some falling significantly short of projections.
Disney recently released the Pixar movie “Elemental” which has a box office revenue of $194 million worldwide. Recently released “Indiana Jones and the Dial of Destiny” has grossed $154 million worldwide in its first week, which puts it below estimates and likely out of reach of the $1 billion milestone.
Disney’s top movies in 2023 include:
- “Guardians of the Galaxy Vol. 3”: $356.4 million domestically, $838.3 million worldwide
- “The Little Mermaid”: $283.8 million domestically, $527.5 million worldwide
- "Avatar: The Way of Water": $283.1 million domestically, $283.1 million worldwide
- “Ant-Man and the Wasp: Quantumania”: $214.5 million domestically, $476.1 million worldwide
Despite some films underperforming, Disney still maintains a 37% share of the box office market.
Variety cites factors like lower demand for sequels, bad reviews, movies not being released in Russia, and China not being a guaranteed release market for top blockbusters.
In 2019, the last year before the pandemic, Disney absolutely destroyed the box office. It held the top six spots in domestic box office revenue and eight of the top 10. Moreover, six of the company's films grossed over $1 billion that year.
Disney has pushed several of its top franchises to pump out content for Disney+, its streaming platform. This has led to no Star Wars movies released in theaters since 2019 and several Marvel franchises getting the series treatment instead of movies.
Related Link: Disney Q2 Earnings Highlights: Revenue Beat, Disney+ Subs Decline
What’s Next: The box office segment of Disney has often provided a stable stream of revenue and profits, which could now be something for analysts and investors to watch.
The good news pointed out by Variety is the fact that Disney’s consumer products business is hugely successful and helps cushion the blow of movies not doing as well in theaters as they can drum up millions of dollars in revenue for other business lines.
Though 2023 is not yet over, Disney's chances of reaching the milestone appear slim without an unexpected movie breakthrough. "Guardians of the Galaxy Vol.3" is on the cusp, but it's likely too distant from the milestone at this point.
Other 2023 releases coming from Disney include “The Haunted Mansion” in July, “The Marvels” in November, and “Wish” in November.
Another item for investors to consider is the quarters for Disney not lining up with the calendar year. So while Disney may not have a $1 billion movie in the calendar year 2023, its fiscal year saw “Avatar: The Way of Water” hit the milestone in the first fiscal quarter.
DIS Price Action: Disney shares are down 1% in 2023 and currently sit near the bottom of their 52-week trading range of $84.07 to $126.48. Shares are down 8% in the last year and down 16% over the last five years.
Read Next: Disney To Face Lawsuit And It's Not From DeSantis, But Over This Popular Franchise
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
