Pixar President Jim Morris shared why he believes the studio’s most recent release, Elemental, will be profitable for The Walt Disney Company.
Elemental has grossed $149.2 million domestically and another $274.2 million internationally for a global gross of $423.5 million globally.
The film had a slow start at the box office only bringing in $29.6 million in its domestic opening weekend, but it had strong holds moving forward. It brought in $18.4 million in its second weekend, $12.1 million in its third weekend, $10 million in its fourth weekend, $9 million in its fifth weekend, $5.7 million in its sixth weekend, $3.4 million in its seventh weekend, and most recently $1.3 million in its eighth weekend.
While the film has legged out at the box office, it still has an estimated production budget of $200 million. That means the film would need to hit $500 million globally to break even if you use conservative estimates.
If you use more aggressive estimates, the film would need to hit around $600 million to break even.
Nevertheless, Morris spoke with Variety and claimed that the film will do better than break even theatrically. He said, “We have a lot of different revenue streams, but at the box office we’re looking at now, it should do better than break even theatrically.”
Not only did he claim it would make money at the box office, but he noted all the other revenue streams that The Walt Disney Company will deploy in order to make it even more profitable, “And then we have revenue from streaming, theme parks and consumer products. This will certainly be a profitable film for the Disney company.”
Interestingly, Morris also shared he hopes the film will get to the $460 million mark globally at the box office, “We’re hoping it’ll get to maybe $460 million. I always wish higher. I’d hate to disappoint myself, but I’d love to see it get to half a billion.”
Given he hopes the film will top out at $460 million and that it will be do better than break even theatrically, it’s quite possible the production budget on the film is actually lower than the estimated $200 million.
It’s also possible that Pixar and The Walt Disney Company cut costs on marketing the film. Disney CEO Bob Iger has made cutting costs one of his big talking points during the company’s earnings call as well as in appearances at financial summits and in interviews.
As an example, Iger said during the company’s Q2 FY23 Earnings Results webcast, “And one interesting example — I should throw marketing in too — where when you make a lot of content everything needs to be marketed. You’re spending a lot of money marketing things that are not going to have an impact on the bottom except negatively due to the marketing costs.”
“One thing we also know is that our films, those that are released theatrically, big tentpole movies, in particular, are great sub drivers, but we were spreading our marketing costs so thin that we were not allocating enough money to even market them when they came on the service,” Iger said.
Morris was asked on how Disney could reduce costs for films like Elemental and upon answering he revealed the film “was particularly expensive.”
He said, “One of the ways you make these films for less money, and almost all of our competitors do this, is to do work offshore. It’s only us and Disney Animation that makes animation films in the U.S. anymore with all of the artists under one roof. We feel like having a colony of artists approach has differentiated our films. We hope to find a path to make that work.”
“Elemental was particularly expensive because all the characters have visual effects,” Morris asserted. “We had been getting the film costs down.”
However, he also differentiated estimated production budgets for films from Pixar compared to theatrical releases from other studios, “The other thing I’ll say about our film budgets is that our whole company exists only to make these films. So when we say a budget, that is everything it takes to run the whole company.”
“Sometimes, the budgets [for other films] that get reported are physical production costs and don’t include the salaries of executives and things like that. Our budgets include all of that, so there’s some accounting context that gets lost. But that doesn’t mean they’re not expensive,” Morris elaborated.
What do you make of Morris asserting that Elemental will indeed be profitable for The Walt Disney Company?