Disney breaks $7bn global box office record for 2016

Star Wars spin-off Rogue One helps studio break sales record after triumphs including Finding Dory, Zootopia and Jungle Book Photograph: Jonathan Olley/Lucasfilm/AP

 
by Mark Sweney

Disney has become the first film studio to take $7bn (£5.7bn) in global ticket sales in a year, with Star Wars spin-off Rogue One joining the hit factory production line alongside Marvel superheroes and animated children’s movies.

With Rogue One: A Star Wars Story, the spin-off tale of the mission to steal the plans for the Death Star, taking almost $300m (£323m) globally on its opening weekend, Disney has easily shot past the previous $6.9bn annual ticket sales record set by rival Universal last year with hits including Jurassic World and Furious 7.

With almost two weeks of the year left, the momentum generated by the most famous sci-fi franchise in the world and the popularity of the studio’s animated film Moana ($282m and counting) is likely to push Disney’s overall takings closer to $8bn.

Disney has already released the four top-grossing films of the year so far with Captain America: Civil War, Finding Dory and Zootopia taking more than $1bn at the global box office, while a live-action version of The Jungle Book fell just short. Doctor Strange, starring Benedict Cumberbatch, released in November, has made more than $650m to date.

The record haul is the crowning achievement of a decade long strategy to reinvigorate Disney’s film division by buying up blockbuster franchises, characters and talent.

In 2006, Disney spent $7.4bn buying Apple founder Steve Jobs’ Pixar, the hit factory behind Finding Nemo, its sequel Finding Dory, Toy Story and The Incredibles, to help revive its once proud tradition of producing hit animated films.
This was followed in 2009 by the surprise $4bn purchase of Marvel Comics’ superhero universe, bringing in characters including X-Men, Iron Man and Captain America, which took Disney into new live action territory.

The third transformational deal was snapping up George Lucas’ Lucasfilm, maker of Star Wars and the Indiana Jones franchises, in a $4bn deal in 2012, with a plan to vastly expand the sci-fi franchise starting with 2015’s The Force Awakens.

The $15bn of deals, which were in each case criticised by City investors as overpriced, were the brainchild of Bob Iger, Walt Disney chief executive.

“It was almost standard practice to say five and 10 years ago that Disney overpaid, but you see from the performance of the films from those divisions that they were essential to the company’s success,” says Guy Bisson, research director at Ampere Analysis.

When Iger took the helm in 2005 Disney was still licking its wounds, having fought off a hostile takeover attempt by cable TV company Comcast, which went on to take a stake in studio MGM and buy NBC Universal and DreamWorks. Its animation-led film operation was struggling.

That year the company managed to get just one film in the global top 10, The Chronicles of Narnia: the Lion, the Witch and the Wardrobe. And its studio was ranked fourth among the top five in the world’s biggest market, the US.

Fastforward to 2016 and Disney accounts for five of the top 10 grossing films this year. Star Wars: The Force Awakens has been Disney’s single biggest hit, raking in $2.07bn, spread across two calendar years of box office takings as it launched in December 2015. Rogue One looks set to also break $1bn but will also see its box office take split across two calendar years.

“Management had a vision that proved to be correct,” says Bisson. “They focused on strong characters that work across all their business lines – toys, merchandising and theme parks; and it has been very advantageous that the franchises breathe sequels and spin-offs very naturally, and they are also very popular among the key audiences of millennials and the younger generation.”

Disney is currently constructing a Star Wars Land at its flagship US theme parks, which will include a ride where visitors take control of the Millennium Falcon, and the Pirates of the Caribbean ride, which spawned the Johnny Depp mega-franchise, has recently been expanded to its Shanghai Disneyland.

Another Disney blockbuster, Frozen, is reportedly the biggest merchandise moneyspinner of all time, with sales of more than $107bn.

Hollywood’s movie secret, which Disney happens to have mastered the best, at least for now, is that bigger is better and less is more.

In 2005, the top five studios released 173 films, with Disney launching 31, according to Box Office Mojo. In 2016 that number has dropped to 118, with Disney down 60% with just 13.

“Since the financial crash studios had to rework the way they did things and cut their slates back,” says David Hancock, director, head of film and cinema, at IHS Markit. “Very few, very big films drive the box office upwards.”

The question is whether, or how long, Disney can keep its box office crown.

The studio will get a running start with about two-thirds of Rogue One’s global ticket sales counting toward’s next year’s tally.

And with a big titles including the second Guardians of the Galaxy movie, Pirates of the Caribbean: Dead Men Tell No Tales and Thor: Ragnarok, Disney is banking on another sequel-tastic year of blockbusters.

The 65-year old Iger, whose contract at Disney runs until 2018, will also be looking to the force for box office gold next year. Disney will be banking on once again trouncing rivals with the hope that Star Wars: Episode VIII will join just Avatar, Titanic and The Force Awakens in the exclusive $2bn-plus box office club. 

“The next film in the Star Wars saga has the potential to claim the title as the biggest movie of all time,” said Paul Dergarabedian, a film analyst with comScore.

Top 10 grossing films at the global box office 2016 (to date)

1. Captain America: Civil War - $1.15bn (Disney)
2. Finding Dory - $1.03bn (Disney)
3. Zootopia - $1.02bn (Disney)
4. The Jungle Book - $966m (Disney)
5. The Secret Life of Pets - $875m (Universal)
6. Batman v Superman: Dawn of Justice - $873m (Warner Bros)
7. Deadpool - $782m (Fox)
8. Suicide Squad- $745m (Warner Bros)
9. Fantastic Beasts and Where To Find Them - $718m (Warner Bros)
10. Doctor Strange - $653m (Disney)

Disney’s transformative deals

Pixar
When bought: 2006
Price: $7.4bn
Hits: Up (box office: $735m), Toy Story 3 ($1.1bn), Inside Out ($858m)
Upcoming films: Cars 3 next year, The Incredibles 2 in 2018 and Toy Story 4 in 2019
Marvel
When bought: 2009
Price: $4bn
Hits: The Avengers ($1.5bn), Iron Man 3 ($1.2bn), Guardians of the Galaxy ($773m)
Upcoming films: Guardians of the Galaxy Vol. 2 and Thor: Ragnarok next year, and Avengers: Infinity War in 2018
Lucasfilm
When bought: 2012
Price: $4bn
Hits: Star Wars: The Force Awakens ($2.07bn), Rogue One: A Star Wars Story ($290m opening weekend)
Upcoming films: Star Wars: Episode VIII next Christmas, Han Solo spin-off in 2018 and new Indiana Jones movie in 2019