Written by Oskar Wiedenhoeft
Ever since Walt Disney spurred his dreams of creating a cartoon studio into reality in 1923, the all-powerful mouse has become one of, if not the most powerful entities in Hollywood. Disney has been the studio behind iconic characters, movies, and IPs such as Marvel, Pixar, and Disney animation, many of which have cemented their legacies as globally renowned institutions that achieve annual revenues in the hundreds of millions. But from 2021 to 2023, for the first time in decades, Disney appeared to loosen its grip on consumers and showed some chinks in its armor.
In terms of the box office, Disney’s revenue peaked in 2019 at $3.8 Billion. But in 2023, well removed from the impact of COVID, revenue regressed by more than 50% to $1.89 Billion (Statista, 2024). Even worse, Disney lost chunks of its worldwide box office market share, which it had spent decades carving out. In 2019, Disney’s share of the worldwide box office peaked as high as 33%, and just four years later, that number was axed in half, dipping to as low as 16% in 2023 (The Numbers, 2024).
Notably, Disney experienced some high-profile bombs that lost the studio millions, including gargantuan failures such as Indiana Jones and the Dial of Destiny, which was released in June of 2023 and made $383 million worldwide on a more than 300 million dollar budget, likely losing Disney hundreds of millions of dollars (As a general rule of thumb, movies need to make about 2.5 to 3 times their budget to break even at the box office). The box office struggles did not end there. A marquee MCU installment in Ant-Man and the Wasp: Quantamania made $476 million on a $350 million budget, and disastrously, another MCU installment in The Marvels grossed an MCU record low $206 million on a $250 million budget. Disney was wounded at the box office, and it was the movies they always felt they could rely on that were failing so astronomically.
Even outside the exhibition industry, the company struggled to gain traction in the streaming gold rush. Disney Plus, the company’s flagship service, found itself unable to meet investor expectations quarter after quarter, in spite of hundreds of millions being pumped into content, including a staggering 11 different high-budget shows based on the MCU between 2021 and 2023.
The walls were collapsing around Disney. According to CNN’s Samantha Delouya, the company’s stock was “at its lowest level in nearly ten years,” and even worse, when comparing Disney’s stock numbers to that of their rivals: “Comcast’s stock is up more than 18% this year, and Warner Bros. Discovery … is up 22%.”, signaling that Disney was falling behind its closest rivals (Delouya, 2023).
Even Disney CEO Bob Iger admitted at a conference in November 2023 that “things had taken a downturn” (Goldsmith, 2024).
Despite this, as we approach the end of 2024, Disney has prevailed. This year, the studio has had massive wins such as Inside Out 2, which made an unbelievable $1.7 billion on a $200 million budget, as well as Deadpool 3, which made $1.3 billion, also on a $200 million budget. Crucially, the profits from both movies have more than likely recuperated the box office losses from 2022 and 2023 and then some. They say a rising tide raises all ships, and as of November of this year, Disney’s stock price is climbing, up nearly 50% from its 10-year low of $79.32 a share.
Disney’s comeback, particularly the speed of it, is rather astounding. The key to Disney’s turnaround has been the recognition by Disney executives of how the movie studio gets its economic influence. The reality is that Disney’s immediate recovery speaks volumes about just how attached we as consumers are to our all-powerful corporate entities, especially in an era in which people only go to see a select few number of movies a year.
First, it’s important to evaluate Disney’s adaptations in the last two to three years. In November 2022, the board ousted CEO Bob Chapek, who oversaw the 10 year stock low and had initially replaced a retiring Bob Iger in early 2020, as a result of various blunders and controversies. These blunders included the decision to focus more on the unknown revenue source of streaming, rather than on the tried and tested box office, by releasing films such as Black Widow simultaneously both on streaming and in theaters. This decision prompted a lawsuit from Black Widow star Scarlett Johanson, who rightfully felt she had unfairly lost out on millions in box office revenue, proving damaging to the company’s reputation. In addition, Chapek rather unceremoniously axed the chairman of Disney general entertainment television, Peter Rice, who, according to an article written by Gene Maddaus of Variety, “had been seen as a possible contender for Chapek’s job, should it become open” (Variety, 2022). This pegged Chapek as
someone solely vested in his self-interests, proving once again to be a bad look for Disney, and Chapek was ultimately axed.
With Iger’s return came immediate changes. For one, the CEO emphasized reducing the size of their budgets to increase profitability in theaters. As a result of COVID and general mismanagement during the Chapek era, budgets for projects such as Indiana Jones and the Dial of Destiny and Ant-Man and the Wasp: Quantamania had ballooned to well over $300 million. Meanwhile, the budgets of the key contributors to Disney’s comeback this year, Deadpool 3 and Inside Out 2, have been quelled to a more reasonable $200 million, and Disney was able to quickly recover their millions in losses.
In the same conference in November 2023 in which Iger admitted to Disney’s struggles, Iger also noted that moving forward, “Disney will be stressing quality over quantity” (Deadline, 2024), and Disney’s recent releases have proven that. Notably, the studio’s two 2024 releases that have inspired their comeback, Inside Out and Deadpool 3, have been well-regarded by critics and audiences. Comparatively, movies such as the Marvels, Ant-Man and the Wasp: Quantamania, and Indiana Jones and the Dial of Destiny received much more mixed reviews from critics and audiences, signaling a new emphasis on quality over quantity..
In the past two years, the mouse house also has scaled things back in terms of releases, only releasing two MCU shows on Disney Plus in 2024. When Disney attempted to pump too much content into both streaming and theaters, they spread themselves too thin, their quality faltered, and they lost a bit of that all important prestige. The reality is that the average moviegoer only chooses to see a select few movies a year nowadays. Thus Disney, previously touted for their quality projects for kids and adults, has re-emphasized that quality to get more parents to select Disney feature films as one of their few movies to spend $70+ to take their kids to. As long as they continue to produce reliably entertaining content for children and adults alike, Disney is here to stay.
For their upcoming slate of films, not only is the studio reducing the amount of movies they are pumping out, but also turning to already established quality brands, such as Zootopia and Snow White with both franchises slated for continuation in 2025. Disney’s future looks bright, and Bob Iger looks to have saved Disney from what could have been a disastrous and consequential decade.
References
Statista. 2024. “Box office revenue of Disney in the United States and Canada from 2000 to 2023.” Statista.
https://www.statista.com/statistics/187329/box-office-revenue-of-disney-in-north-america-since-2 000/
The Numbers. 2024. “Box Office Numbers for Walt Disney”. The Numbers. https://www.the-numbers.com/market/distributor/Walt-Disney
Delouya, S. 2023. “Disney is in trouble. Bob Iger has 5 big problems to solve”. CNN. https://www.cnn.com/2023/11/08/media/disney-iger-uncertainty-earnings-preview/index.html – Goldsmith, J. 2024. “Disney Touts Two-Year Turnaround Behind Studio’s Stellar Quarter”. Deadline. https://deadline.com/2024/11/disney-touts-two-year-studio-turnaround-1236176465/ – Maddaus, G. 2022. Bob Chapek‘s Early Blunders Made It Hard to Escape Bob Iger’s Shadow at Disney. Variety.
https://variety.com/2022/film/news/bob-chapesk-fired-disney-ceo-blunders-iger-1235438438