Let It Go To Infinity And Beyond: Disney Turns To Sequels For Future Movie Growth

Walt Disney Co DIS's first-quarter earnings results and the company’s earnings call Wednesday were the first since Bob Iger rejoined as the CEO of the company, replacing his former replacement Bob Chapek.

Iger and the Disney management team discussed layoffs, cost-cutting measures, Disney+ strategy, the separation of business units and plans for ESPN as some of the key topics on its earnings call.

Another item was the announcement by Iger that Disney is working on sequels for the Toy Story, Frozen and Zootopia franchises. This means in the coming years, movie lovers will get to see “Toy Story 5,” “Frozen III” and “Zootopia 2.”

The announcement of the sequels from existing hit franchises could be part of the company’s plans to tighten content costs and perhaps count on known hits and fewer experiments.

“Times have changed. It’s gotten more competitive, the forces of disruption have only gotten greater and there are certain things that are residual of COVID that have gotten tougher from a macroeconomic perspective,” Iger said.

Iger said the key to Disney’s success over the years is in part due to storytellers in its entertainment division.

“We’re still a company that is focused on creativity in its highest form.”

Disney plans to spend less money on making movies and television shows, which could impact the launch of new franchises and see The Mouse instead rely on existing ones already in place.

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Why It’s Important: While other companies focus on their streaming platforms, Disney sought a balance to its theatrical releases and streaming content. Some of the company’s streaming originals came from existing franchises such as Pixar, Marvel and Star Wars.

Disney has strong lineups of Star Wars and Marvel content coming to the big screen and the announcement of sequels for these three hit franchises should be music to Disney shareholders' ears.

Here’s a look at the box office results for the franchises previously, with data from BoxOfficeMojo.

“Toy Story,” 1995: $191.8 million domestically, $52.9 million internationally, $244.7 million total

“Toy Story 2,” 1999: $245.9 million domestically, $241.2 million internationally, $487.1 million total

“Toy Story 3,” 2010: $415 million domestically, $652 million internationally, $1.07 billion total

“Toy Story 4,” 2019: $434 million domestically, $639.3 million internationally, $1.07 billion total

“Frozen,” 2013, $401 million domestically, $883.6 million internationally, $1.28 billion total

“Frozen II,” 2019: $477.4 million domestically, $976.3 million internationally, $1.45 billion total

“Zootopia,” 2016: $341.3 million domestically, $684.3 million internationally, $1.03 billion total

The Toy Story franchise had been one of the keys to the success of Pixar over the years. “Toy Story 4” ranked as the third highest-grossing Pixar movie domestically and ranked as the 28th and 37th top-grossing movie of all time for domestic and global box office, respectively.

“Toy Story 3” ranked 34th all-time domestically and 38th all-time globally for box office performance.

The Frozen franchise remains one of the best for Disney of all time. The 2013 first movie ranked 44th all-time domestically and 19th all-time globally for box office performance.

“Frozen 2” ranked 20th all-time domestically and 13th all-time for the global box office.

While they might be years away from release, getting one of these movies out each year in addition to the Marvel and Star Wars movies could help Disney continue to dominate the competition at the box office and have a trickle-down effect on other business lines.

One of the key items to watch in the future will be how expectations for “Toy Story 5” come in, with the origin story of Buzz Lightyear called “Lightyear” underwhelming at the box office, taking in $115.8 million domestically and $97.8 million in international theaters.

Having a large franchise movie in theaters can benefit Disney in several ways. The company could land consumer products and licensing deals around the release and also launch themed marketing campaigns in its theme parks.

The theatrical release could also help Disney with box office revenue and the ability to show the movie on cable and on streaming platforms.

DIS Price Action: Disney shares lost 1.27% Thursday, closing at $110.36 on Thursday, giving up earlier post-earnings gains. 

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Photo: Mercury Green via Shutterstock.