Mark J. (NDD#102) (33 Posts)

Mark was born and raised in Fayetteville, WV. He first visited Disney World back in 1975 and was instantly hooked. He returned several times as a child and now brings his own family as often as possible. Being a new lawyer, however, that isn't as often as he'd like. Mark is married to Sherri, NDM#237.

. . . I’ve been meaning to write you for some time. As a Disney shareholder, I want to pass along an idea that I feel will add to Disney’s profits to the shareholders while also providing more value to Disney’s loyal customers.

There was a time when Disney re-released its animated features to the theaters every seven years or so in order that a new generation of children could experience these classics. This practice ended shortly after VCRs and other home video players became popular. The feeling was that since the movies were available to watch in one’s home, releasing the movies in the theaters wouldn’t generate enough revenue to be worth the effort. However, I disagree and humbly suggest that the Walt Disney Company renew this practice and begin re-releasing its library of animated classics into theaters.

There’s no doubt that the home video market has been a financial boon to Disney. My family alone has probably invested several thousand dollars in Disney VHS videos and DVDs. But I don’t think that we’re unusual in that we like to see Disney’s new movies in the theater, and then get the DVD of the movie when it’s released several months later. Contrary to the thinking at the time that the decision was made to discontinue theatrical re-releases, it’s not an “either-or” equation. For many families, including mine, buying the DVD or Blu-Ray is a way to relive the magic of first seeing the picture in the theaters.

But don’t just rely on a hunch based on my personal experience, Mr. Iger. Let’s take a look at some of the limited theatrical releases Disney has undertaken since home video took over. Most recently, in the fall of 2009, to gear up for the next summer’s release of Toy Story 3, Disney and its subsidiary Pixar re-released the first two Toy Story films in theaters in 3D as a double feature. Personally, my family was thrilled. While both of my children had seen Toy Story and Toy Story 2 on DVD many times, this was the first opportunity they had had to see them in the theater. The re-release was the number three film at the box office its opening weekend . Over the course of the five-week limited release, these films grossed over $30 million in additional revenue for Disney. Not too shabby for movies that had already been available in the home video market for years.

It may not be fair to use a 3D double feature to rate the potential of theatrical re-releases, though. So let’s take a look at another, more traditional theatrical release. This is the model I have in mind. In November 1997, Fox Studios was releasing its animated feature, Anastasia. Disney didn’t have an animated film ready for release to counter its competition. So it re-released its classic, The Little Mermaid. I vividly remember this because it was the first movie my then three-year-old daughter saw in the theater. Over a two-week limited release, The Little Mermaid grossed nearly $20 million dollars . It was number three its opening week, and most importantly for Disney, it soundly beat Anastasia.
So you can see, the home video market has not significantly reduced the demand for theatrical releases of Disney classics. And as impressive as these box office returns are, it’s important to remember that they’re gross figures. Profits are determined by net, the amount the release makes over its cost of production. That’s the beauty of re-releasing the animated classics and why they’re almost sure to increase profits. Almost all of the costs of development have already been paid for. Disney’s costs would only be the amount needed to clean the films up and distribute them. Very little would have to be spent on marketing, as these films are already classics that most every kid and parent is familiar with. All you would have to do is let people know that the film was being re-released, when, and for how long.

Like I said, I’ve been meaning to talk to you about this for a while, but then I saw news last week that makes me wonder if you’ve been reading my mind. This September, Disney is re-releasing The Lion King in 3D in theaters for a limited two-week run prior to its Diamond Edition release on Blu-Ray and DVD. Brilliant, Mr. Iger! Thank you. I promise the company won’t regret this decision. Personally, I would prefer the animated films be released in their original format, not 3D. This would also decrease the costs of the release to Disney. But I can live with 3D.

Now Disney needs to continue to release its animated classics every year. The holiday season is when Disney traditionally releases its new animated film, and Pixar has its release every summer, so we don’t want to compete at those times. Fall or spring, however, would be ideal times to re-release an old classic. I’m not proposing that Disney re-release every one of its fifty animated films. I doubt any one is clamoring to see Make Mine Music, The Black Cauldron, or Treasure Planet back in theaters. But the true Disney classics—Pinocchio, Peter Pan, Cinderella, Beauty and the Beast—need to be seen on the big screen. I would also add the more recent classics, The Princess and the Frog and Tangled. In seven or eight years, there will be a new generation of children that should have the opportunity to see these in theaters.

That’s the true reason Disney needs to take my advice. I know that you’re the CEO, responsible to the Board of Directors and shareholders to maximize profits. I hope I’ve shown how theatrical re-releases can achieve that. But more importantly, think of the generations of children (and even some young parents) who have never had the chance to see Snow White and the Seven Dwarves or Sleeping Beauty in the way Walt envisioned. It saddens me when I consider it. The Walt Disney Company is more than a mere corporation. It’s an integral part of the American experience. As such, it owes a duty to the public as much as it does to its shareholders. Fortunately, re-releasing Disney’s animated classics would allow the company to meet its duties to both constituencies.

Mark Jeffries

P.S. While I have your attention—can you also attach an animated short to the beginning of every Disney animated theatrical release? There was one at the beginning of Meet the Robinsons a few years ago. My family thought that this was the beginning of a trend, and were sorely disappointed to find out we were wrong. Pixar begins each of its features with a short, and I don’t think you can dispute the commercial or critical success of their practice. Thanks.

Contributed by:Mark Jeffries (NDD#102) Mark is the DDL Finance Blogger.

7 thoughts on “DEAR BOB IGER…

  1. Your 1997 analogy is a bit flawed, in my opinion. In 1997, the primary home video option was VHS. Some had laserdiscs, (DVDs were just coming out) but most watched a movie at home on VHS. The 4:3 aspect ratio of TVs as well as the size of these televisions meant that most films were modified for VHS with a technique called “pan and scan”. These tapes cropped the original film down a good deal to fill the television screen. In contrast, theater releases were on a huge screen, and the theatrical screen was not cropped like the television set. In addition, the sound system was much better.

    Today, we have large HDTVs (some that can display 3D), 1080p Blu-Ray players, and 7.1 surround sound systems. Couple this with patrons who can’t seem to be quiet or put their smartphones away in the movie theater and the home theater experience is more comparable to the movie theater than it was in 1997. I still go to the movies every so often (mostly for Disney movies these days), but it’s not nearly as much as I used to.

    I haven’t decided if I’m going to see The Lion King in theaters yet; 3D for a feature-length film doesn’t mean much to me personally. I think it works better for shorter experiences such as Philharmagic or MuppetVision. It will also be out on Blu-Ray two weeks later as mentioned above, and the price of tickets alone could buy the Blu-Ray.

  2. Thanks, I’m really excited to take my kids (and me) to see The Lion King in theaters for the first time.

  3. Good point about the technological advances in recent years, but I believe that the overall point is still sound–home theater hasn’t displaced the demand for theatrical releases.  If that were true, movie theaters would’ve gone out of business years ago and everything would be released direct to DVD/Blu-Ray.  I believe this is particularly true for films with low overhead, like the re-releases.  The film doesn’t have to gross nearly as much to be profitable.  I’ll bet a paycheck that The Lion King turns a big profit in September.

    I’m with you on the 3D feature-length films.  My eyes hurt after a while.  Plus, unless the film was specifically designed to be shown in 3D and take advantage of it (think Fozzie’s pranks in MuppetVision), I don’t get enough out of it to justify the increased price.

    Thanks for commenting!

  4. You know, some of those Disney flops- like Treasure Planet and Atlantis and Emperors New Groove- could be theatrical hits in re-release.  My boys love Treasure Planet.  They watched it on Disney XD over and over.  I’d take them to see it in a theater on the big screen.  They LOOOOOOVE watching movies in the theater with a big bucket of popcorn and a soda (which they don’t get at home!).

  5. That’s an interesting observation I hadn’t thought about.  Traditionally, the theater release generates demand for the home release, but I can see where kids who have never seen a movie anywhere but at home might be really excited to see a favorite from DVD on the big screen.  Reverse synergy, if you will.  I just wish Disney would give it a shot.  Maybe if Lion King does well, we’ll see more theatrical re-releases.

  6. Dear Mr. Iger,
    I just saw Winnie the Pooh last weekend and was pleased to see the animated short at the beginning.  Thanks for listening!

    Your buddy,

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