Sunday, April 05, 2009

Wall Street Whines About Up

The New York Times morphs into a wet blanket:.

,,, To the extreme irritation of the Walt Disney Company ... two important business camps — Wall Street and toy retailers — are notably down on “Up.” ...

Some industry watchers, a few of them still griping about the hefty $9 billion that Disney paid for Pixar in 2006, are fretting about the film’s commercial potential, particularly when it comes to benefiting other Disney businesses.

Richard Greenfield of Pali Research downgraded Disney shares to sell last month, citing a poor outlook for “Up” as a reason. “We doubt younger boys will be that excited by the main character,” he wrote, adding a complaint about the lack of a female lead ...

With moving pictures, the way it works -- as William Goldman says -- is that nobody knows anything, least of all the Wall Street smart alecks. (Though they've had such a sterling track record lately managing the known financial universe, it's tough to bet against them.)

Maybe Up will be a huge hit, maybe it ends up a middle-of-the-pack money spinner. My bet is, by the time the movie works its magic at the world box office and wends its way to DVDs and other ancillary markets, the Pixar opus will be comfortably in the black.

But it just might not be in the black enough for the ravenous expectations ensconced in lower Manahattan. And in that case, Disney stock will slide south, and all the finger waggers will come out to say: "We told you the price for that Emeryville studio was too high!", forgetting that they applauded loudly and pushed Disney stock up when it happened.

But some people are never happy, particularly ones who live on Wall Street.


Anonymous said...

No, they won't. They worship and think about money 24 hours a day. Everything in their lives is all about money - who has it and, more importantly, who owes it and how much they owe. They work 24 hours a day to earn it and expect the rest of the world to do the same because that's somehow what makes the world go round. I think they're just pissed off when people take their money and spend it on shite they have absolutely no control over. Well, someone has to spend it. It's worthless fiat currency anyway.

Anonymous said...

For my part...I applaud Pixar for exploring new realms in its search for fresh ideas and stories. But I worry that it's getting Frankly, I haven't really enjoyed a Pixar film since "The Incredibles". "Cars" left me cold, "Ratatouille" was just meh, and "Wall-E" bored me silly. I enjoyed "Kung Fu Panda" (Dreamworks) and "Bolt" (Walt Disney) far more, which was the last thing I expected. I just...think that sometimes Pixar tries too hard to be eclectic. I wish it would focus less on high-concept and more on character. Just my two cents. (I am looking forward to seeing "Up", though; that dog kills me).

Anonymous said...

Oh they need not worry - the instant classic Cars 2 will be rolling out soon enough to get the same bitches crawling back on hands and knees to the mighty Pixar cash making demigod.

David said...

I read the NY Times article .

At one point the writer, Brooks Barnes, claims:

"Pixar’s last two films, “Wall-E” and “Ratatouille,” have been the studio’s two worst performers, delivering sales of $224 million and $216 million respectively, according to Box Office Mojo, a tracking service."
(emphasis added by me)

I wonder why in this New Global Economy™ the NY Times would choose to selectively focus on only the domestic box-office receipts for those films and not give readers the big picture showing the worldwide box-office cumulative gross from both the domestic and foreign release:

Ratatouille : $621,426,000

Wall E : $534,767,889

Cars: $461,983,149

So according to Box Office Mojo (which the Times writer must have looked at to get the domestic gross figures) Ratatouille and Wall E have not been Pixar's "worst" performers at the box-office. Both made more money than Cars when the entire box-office gross is considered.

But Cars has made even more money with ancillary merchandise and I suppose that is where the real money is.

Justin said...

What gets me is that the Walt Disney Co. made $37.8 billion in fiscal year 2008. Let's say that Up is Pixar's worst performing movie ever and ends up making less than Cars in both global box office and merchandising. That could equal $200 million less than Wall-E made.

That represents 0.5% of the Walt Disney Co.'s earnings. This investor is really going to downgrade Disney shares due to a potential drop of half a percent in one segment of their company?

Anonymous said...

Justin-it's more involved than just domestic performance along for the WDC. The article reflects worries about less potential ancillary stuff-toys, books, getting people into Disneyland with "Up" tie-ins or excitement, then the DVD sales, and on and on. It's true that a big corporation can handle a less-than-blockbuster without keeling over but of course they never look at it that way, nor do the hyper investors and forecasters.
I think it's fair that they're only counting domestic B.O., because that's the focus of the article-domestic-as a judge of success as they're discussing it. That said the concerns seem a bit silly. For instance since when is there some belief that boys want "a female lead"?! That's the inverse of everything I've ever heard from these people. Are they upset that it isn't "Dora"? Come on.

I thought the article was pretty restrained and it included some good quotes from the director and producer. There's clearly a lot of respect in the press for Pixar's output and pedigree, as there should be. Still, it's a valid Wall Street concern to cavil over upcoming films. The writer also points out that the pundits' worries over Ratatouille and WALL*E turned out to be unfounded. Pretty balanced. It won't set off any panics(or shouldn't) and happily the film will speak for itself soon enough.

Ryan Summers said...

I think that with the simple and sweet Cars, John Lassetter closed the book on the first chapter of the Pixar story. As we get the second films of most of the original stable of Pixar directors (Stanton w/ Wall-E, Doctor w/ Up, and even Bird with Ratatouille) we're partway through an ambitious phase for these directors. Has there ever been a studio in Hollywood with as reliable and successful a stable of filmmakers? The fact that challenging "kid's films" like Wall-E and Ratatouille made as much as they did around the world is astounding.

Maybe the marketing department folks at Disney should show the studio and directors of Pixar a little more faith, especially after the unheard of legs that Cars continues to demonstrate. With Toy Story 3, Cars 2, and a rumored Monsters Inc sequel in the pipeline, their jobs are about to get much easier.

Anonymous said...

The "original hard-sell trilogy" (with Ratatouille and WALL-E) is over after Up. In the next 2 years you only see sequels from the Lamp, until the end of 2011.

You will be very sorry once Toy Story 3 and that king-of-merchandising humongous Cars 2 are out and you have sold all your DIS.

Anonymous said...

Soon we'll all get to see how it was Lasseter was able to convince Disney to drop the producing Pixar cheapquels!!

Anonymous said...

I wonder why in this New Global Economy™ the NY Times would choose to selectively focus on only the domestic box-office receipts for those films and not give readers the big picture showing the worldwide box-office cumulative gross from both the domestic and foreign release

I suspect it's because financial journalism is not about what happened yesterday, that was on the internet 5 minutes after it happened; it's about making a prediction and cherry picking some data to make it look like it's inevitable.

Anonymous said...

If any studio has earned the right to be a little quirky and risk-taking, it's the one up in E-Ville. Hopefully, the audience will follow. But, sometimes they don't. (Coppola's "One From The Heart" springs to mind.)

Anonymous said...

“We doubt younger boys will be that excited by the main character,” he wrote, adding a complaint about the lack of a female lead ..."

If is worth bucking convention if only to prompt financial prognosticators to have to make statements like this. I hope John goes out of his way to make their next film about purple amoebas bicycling through Snotland.

Anonymous said...

In the end, Pixar will be making more money.

The problem with Dreamwork's films is that they are so quickly forgotten. No one is going to see Madagascar or Monsters vs. Aliens. Heck, I doubt anyone is going to watch Shrek.

Pixar films are much different. Every decade, Disney will rerelease them to the next generation. And, each generation will snap them up. Disney will probably do an occational theater rerelease too. Much the way Disney rereleases its animation classics every decade to a new generation.

How much do you want to bet that the original Toy Story and Toy Story 2 will both be rereleased in theaters when Toy Story 3 is about to come out? How much do you want to bet that Disney creates a special Blu-ray set that contains all three movies for only $49.95, and that millions of copies will be sold?

I'll even bet that Disney will make more money on the rerelease of Toy Story and Toy Story 2 than Dreamworks has made on all of their movies combined.

That's the power of writing for quality instead of quick bucks.

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