Disney is a victim of its own success

By Kent R. Kroeger (June 20, 2023)

Why does a movie studio need to worry when its movies in 2023 have already grossed over $809 million in the U.S. ($1.7 billion worldwide) and whose potentially biggest release of the year, Indiana Jones and the Dial of Destiny, is still on the summer horizon?

The ‘what have you done for me lately’ mentality of the modern entertainment business is one source of Disney’s current angst. Disney isn’t just competing against Universal, Sony Pictures, and Lionsgate for box office market share, they are competing against themselves. Disney movies captured 33 percent of the North America domestic market in 2019 — the last pre-pandemic year — while pulling in a record $11.1 billion in worldwide box office receipts ($13.2 billion if you include Disney’s recently purchased Fox film titles). But Disney will be fortunate to break $5 billion in worldwide box office in 2023 (at near mid-year, Disney has earned $1.7 billion worldwide so far).

Just the same, box office isn’t the most important success metric. Is Disney still making a good profit margins, regardless of lower ticket sales?

The $1 billion dollar (reported) production costs of Disney’s four most expensive spring/summer movies (Ant Man and he Wasp: Quantumania, Guardians of the Galaxy 3, The Little Mermaid, and Indiana Jones and the Dial of Destiny) presents a major risk to Disney’s profit margins. And that doesn’t include marketing and distribution costs which often equal (if not exceed)…