January 27, 2023

Still from Disney’s newest Pixar film “Luca”.

Disney

Along the white beaches and sky-blue waters of the Italian Riviera, an unusual friendship develops between two young sea monsters disguised as humans.

That’s the premise of Pixar’s newest feature film, “Luca,” which will debut on Disney + on Friday.

Since 1995, Pixar has released 23 more titles, setting the standard for animated films. His films have won nearly two dozen Academy Awards, including 10 for Best Picture, and more than $ 14.5 billion at global box offices.

“It’s hard to imagine [it’s been] 26 years since Pixar first opened its animated toy box to the world, “said Paul Dergarabedian, senior media analyst at Comscore.” From the first ‘Toy Story’ movie to ‘Luca’, Pixar has made an indelible creative impact on the arts des animation, has built a reputation for brilliant storytelling and has generated global net worth in the process. “

Over the course of nearly three decades, Pixar has fundamentally changed the animation industry. It released the first fully computer-generated feature film in 1995 and revolutionized the production of animated films. His stories are designed to entertain children and adults alike.

Disney acquired the studio in 2006 and poured millions into the brand’s box office to produce and release additional films. Pixar became the Disney company’s darling, reviving its animation pipeline that had stalled at the box office.

But almost two decades later, Pixar animators are set to question their role in the ever-growing Walt Disney Company. You may not have to worry, analysts said. Animated films have a strong box office record worldwide, which should encourage studios to keep bringing these features to the big screen.

The coronavirus pandemic has accelerated the studios’ streaming ambitions and changed how certain films hit the market. Disney dodged theaters in December to release Pixar’s “Soul” for free on Disney +, a move that staff at its renowned animation division hoped would be a one-off.

In March, however, the company announced that its upcoming “Luca” would skip the cinemas and go straight to streaming as well. Once again, Disney didn’t award the film the $ 30 premiere entry price – something it did for the release of “Mulan” and “Raya and the Last Dragon” as well as part of the theatrical release of “Cruella” and the coming “black widow”.

The strategy for “Luca” came about when studios were very concerned about theater shows. It was only last month that the box office showed signs of recovery. The boost is also coming as Disney reorganized its media and entertainment departments to focus more on digital offerings.

Disney + has always been the home of television series based on Pixar and Disney animation properties such as “Monsters Inc.” based. and “Big Hero Six”. The strategy was also used for its Star Wars and Marvel franchises.

For the most part, the studios have held back from releasing animated films until the cinemas reopen. Universal’s own animation studio Illumination, for example, has postponed Minions: The Rise of Gru until 2022 to ensure it can be released in as many cinemas as possible. After all, animated features can fetch hundreds of millions of dollars and even break the $ 1 billion mark at the global box office.

“I think a lot of people involved in feature film development are not happy with the direct-to-streaming approach,” said Eric Handler, media and entertainment analyst at MKM Partners. “If your pay structure depends on the financial success of a movie, then cutting out the first and largest window likely means less profit. Also, how do you define profit for a movie that is part of a subscription-driven platform? “

Disney officials did not immediately respond to CNBC’s request for comment.

The big screen vs. the living room

In recent years, streaming players like Netflix have relied on animation to attract new subscribers, especially parents of young children. That could change the dynamic a bit as streaming services try to keep subscribers happy.

While the pandemic forced Disney to put “Soul” and “Luca” on Disney +, those films could easily have grossed hundreds of millions of dollars at the company’s box office. Disney mainly redirected these movies to its streaming platform because the coronavirus outbreak disrupted the development pipeline and required new content for its digital consumers.

“During the pandemic, major media groups prioritized their streaming platforms as the main growth driver (with the highest priority) of the future,” Handler said, explaining that the films became a tool to accelerate subscriber growth.

Tina Fey and Jamie Foxx voice the characters in Disney Pixar’s “Soul”.

Disney

Disney + has certainly benefited from this. In May, the company announced that it had 103.6 million paying subscribers by the end of the fiscal second quarter. This was a feather in Disney’s cap, considering the platform had only launched 16 months earlier. The company expects 230 to 260 million subscribers to Disney + by 2024.

However, given the sizeable budgets for films like “Soul” and “Luca”, this digital release strategy is unsustainable. While shows like “WandaVision”, “Loki” and “Monsters at Work” were slated for streaming debut, these Pixar features were developed with the expectation that they would hit the big screen first.

“Given that not all cinemas are open yet, capacity constraints, and not all age groups are comfortable returning to theaters, studios need to be flexible with their films – especially since there aren’t many theatrical slots available to watch them push movies into 2022, “said Eric Wold, senior analyst at B. Riley Securities.

As global markets continue to open up and seat restrictions eased, it is expected that visitor numbers will return to normal levels. Handler and Wold anticipate that Pixar releases will return to theaters as well.

‘To infinity and beyond’

When it comes to the box office, Pixar has grown to be one of the most enduring studios in the industry.

Since his first film, Toy Story, was released in 1995, his films have grossed an average of $ 650 million worldwide, and four of his films have grossed over $ 1 billion in ticket sales.

The critical reception of his films was just as consistent.

The animation company has long been recognized for its heartwarming and sometimes heartbreaking storytelling. His films are characterized by complex characters and rich universes. The studio has answered timeless questions that move in the mind of children, such as: What happens to your toys when you leave the room? What if the monsters in your closet weren’t all bad? Where do our emotions come from?

Only seven of its 23 releases scored less than 90% on Rotten Tomatoes, and only one movie, “Cars 2”, is considered “lazy” on the site with a score of less than 60%.

“The advent of Pixar on the Hollywood scene was a turning point, if ever there was,” said Shawn Robbins, chief analyst at Boxoffice.com. “Not just ‘Toy Story’ and those early films ushered in a new era that was going on [computer-generated] Animation, effectively pulling back the traditional style, they proved that Disney’s in-house animators weren’t the only creative teams capable of making timeless animated classics. “

In fact, Pixar’s early success with films like “Toy Story,” “Monsters Inc.,” “Finding Nemo” and “The Incredibles,” which were co-produced with funding and distribution from Disney, led then-CEO Bob Iger to become bought the company in 2006 for $ 7.4 billion.

Tim Allen and Tom Hanks speak for Buzz Lightyear and Sheriff Woody in Pixar’s Toy Story.

Disney

Pixar’s use of computer animation changed the game. This new method of filmmaking essentially eliminated the need for hundreds of illustrators and significantly reduced the time it took to create an animated film.

“It took hundreds and hundreds of people – highly skilled people – to make a piece,” said Frank Gladstone, executive director of ASIFA, an international association for animated films. “The traditional way of drawing and painting and photography and all that, it took a long time and it took a lot of people. There were other animated features, but for the big markets it was Disney in every way. “

In the decades prior to Toy Story’s release, there were only a handful of animated films at the box office each year, and Disney was the dominant distributor of those films. There are now dozens of animated films from different studios every year.

And as more and more content flooded the market, the Academy of Motion Picture Arts and Sciences took notice. It added an animated feature film-only category to its annual Academy Awards. In addition to the prestige, there were massive box office wins that inspired studios to continue investing heavily in these projects.

In the years prior to Pixar’s entry into the industry, animated films averaged only about $ 250 million to $ 350 million in ticket sales worldwide. Since 1995, nine animated feature films have topped $ 1 billion at box offices around the world, and the average box office hit is around $ 740 million worldwide.

This box office hit is hard for studios to ignore and is one reason analysts believe animated films will continue to hit the big screen.

“It was clear that most studios were using some major titles to kick off their streaming platforms – and that probably won’t be a priority until 2022 and beyond,” said Wold.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Illumination, Dreamworks, and Rotten Tomatoes.