As Frozen skated its way into Japan on March 14, the question began to loom larger and larger: Could the movie break Toy Story 3‘s $1,063,171,911 in worldwide box office to become the highest-grossing animated film of all time? When Bob Iger predicted it would happen, the reality of such a possibility crystalized further. And now, in its 19th international frame, the two-time Oscar winner has overtaken Disney’s TS3, earning $1,072,402,000 to win the crown of highest-grossing global animated release, ever. It’s also raced ahead of another Disney movie, Pirates Of The Caribbean: Dead Man’s Chest, to make it to No. 10 on the all-time worldwide box office chart. Ironically, the new notch comes one week after Frozen fell out of the domestic Top 10 for the first time during its long run.
Not a lot of love at Diece-Lisa Industries for Disney or Toy Story 3, it seems. Yesterday, the toymaker sued Disney Enterprises in a Texas federal court for trademark infringement and unfair competition. Like it did in previous filings against Disney Shopping Inc and QVC last year and Pixar in 2012, the New Jersey company is claiming that the devious Lotso character featured in 2010’s Toy Story 3 is too similar to the “Lots of Hugs” technology and stuffed bears it has produced since the mid-1990s and re-trademarked in 2007. While not quite saying Disney knew of its product directly, the filing (read it here) this week notes that Diece-Lisa licensed the hugging tech to products related to the Jim Henson Company’s Bear In The Big Blue House TV series — which was sold to Disney in 2004. Noting the box office success of the Toy Story sequel from Pixar and the $7 billion is has made in merch, Diece-Lisa wants unspecified damages as well as an injunction stopping Disney from future use of the character and declarations from the court as to its rights.
The other cases have been weaving their way through the courts, with Pixar being dropped as a defendant in one of them in late 2012. Still, with Disney Enterprises as its latest defendant, Diece-Lisa is determined that the Toy Story 3 character has caught consumers in a retail bear hug.
Big Media 3Q Corporate Earnings Roundup: Are CEOs Really Worried About Recession? Or Just Looking For Convenient Excuse?
Three months ago, when Big Media CEOs wrapped up their 2Q earnings, they were still relentlessly upbeat about the business. Any worries about the economy? Not then. But the messages they delivered over the past few weeks, as they discussed 3Q, were different. Although they’re still optimistic — remember, they’re paid to be salesmen — now and then you could hear expressions of concern about where things are headed. It stood out when Viacom CEO Philippe Dauman noted that “ad sales growth will face some headwinds.” Other CEOs who are known for speaking bluntly warned that other shocks may bedevil the business. For example, Dish Network Chairman Charlie Ergen said that his satellite company — and others in pay TV — have to fight harder against rising programming costs because “there’s a limit to the price increases that could be passed on to consumers.” Time Warner Cable CEO Glenn Britt warned that premium channels such as HBO, Showtime and Starz “are clearly impacted by the economy as consumers try to cut back.” Either they’re genuinely worried, or they want a scapegoat to blame for things that are going bad, or may soon do so. Whatever the case, we can expect to hear a lot more about the economy when it’s time for the post-mortem on the all-important 4Q earnings.
As for industry performance matters, parents of movie studios had their usual mixed results to brag about or explain away: Time Warner benefitted from Harry Potter And The Deathly Hallows Part 2. Viacom was up on Transformers: Dark Of The Moon. And News Corp beat its chest about Rise Of The Planet Of The Apes and X-Men: First Class. But Disney’s Cars 2 was no match for last year’s Toy Story 3. Comcast’s Universal Pictures had nothing to compare to last year’s Despicable Me. Lionsgate suffered from Conan The Barbarian and Warrior. And DreamWorks Animation’s Kung Fu Panda 2 didn’t contribute as much in the quarter as Shrek Forever After did in the same period last year.
Over at the TV networks, Comcast’s NBC underperformed the Street’s already modest expectations. Execs at almost all the companies were eager to talk about the cash they expect to collect soon from political ads — as well as their favorite new ATM machines: retransmission consent deals and digital streamers including Amazon, Hulu, and Netflix. Speaking of Netflix, CEO Reed Hastings once again tried to reassure investors that he’s focused on “building back our reputation and brand strength” after his decision in July to slap a 60% price increase on customers who wanted to continue to rent DVDs and stream videos. In 3Q Netflix lost 57.7% of its market value and 800,000 subscribers. And since that customer loss was bigger than projected, Netflix shares continued to fall — they’re now down 67.3% since July 1.
Here are some other themes from the latest earnings reports:
Ad sales: They’s good, but for how long? Most television networks report that scatter prices are comfortably above the upfront market from this past summer. CBS chief Les Moonves says prices in 4Q are up by “mid-teens” on a percentage basis, while Discovery says it sees least high single digit percentages. But Disney’s Bob Iger noted that scatter prices have “slowed slightly these last few weeks.” Kurt Hall of National CineMedia — the leading seller of ads in movie theaters — was far more direct when he spoke to analysts after ratcheting down his company’s financial forecasts. “I’m sure that the broadcast and cable guys are sitting there now counting their lucky stars they got their upfront done before August,” he told analysts. “There’s a lot of uncertainty.”
The company reported net income of $1.1B, up 30% vs the period last year, on revenues of $10.43B, up 7%. That comfortably beat Street forecasts for revenues of $10.36B. Earnings, at 58 cents a share, also topped predictions of 54 cents — and without one-time charges would have hit 59 cents. Disney’s cable channels led the charge with revenues up 9% to $4.8B and a 20% hike in operating profits to $1.46B. The company says that ESPN and the overseas channels led the way with higher affiliate fees and international ad growth — although the sports channel was hurt by rising costs for programming and marketing and a ratings drop from the loss of the FIFA World Cup. The networks figures include the ABC broadcast operation, where revenues were up 4% to $1.33B with a 37% increase in operating income to $201M. Although it didn’t have political ads, the unit benefitted from higher ad rates — partly due to an uptick in ratings for news and sports — and lower programming costs. The company says that scatter prices are 25% ahead of the upfront market.
At the theme parks, attendance was up 1% but spending was up 9% due to price increases. That led to a revenue increase of 11% to $3.13B with operating income rising 33% to $421M. The company says that consumer spending was up — especially new guest offerings at Disney California Adventure and at the Disney Cruise Line, although …
Disney claims it is looking into accusations of human rights abuse at the factory in China that makes its popular Cars and Toy Story merchandise. An undercover investigation, which took place in June after a factory employee’s suicide, revealed mistreatment including child labor and excessive overtime. Although the maximum amount of overtime allowed by law is 36 hours per month, factory workers produced wage slips showing they averaged 120 extra hours per month, according to a report. Employees also cited the use of dangerous chemicals without protective equipment, which they said made them ill, and told undercover investigators that they were made to hide adhesives and thinners during audits by client companies, which also include Mattel and Walmart. Concerns about conditions at the factory, called Sturdy Products, were raised when a 45-year-old worker reportedly jumped off a building at the site after being mistreated by managers. Walmart said in July that it was investigating the suicide. Disney also is launching its own investigation at the factory.
“We take these matters impacting our licensees and business partners very seriously and will continue to evaluate this situation based upon the information available to us,” Disney told Deadline today.
Human rights group Students and Scholars Against Corporate Misbehaviour, which helped investigate Sturdy Products, last year exposed abuses at Apple’s Foxconn plant in China, which had seen a spate of employee suicides. In 2010, Disney remained the top seller of licensed goods worldwide, as …
Although U.S. audiences have cooled to 3D movies, overseas ticket buyers still loved the technology in 2010, a report today from IHS Screen Digest Cinema Intelligence shows. Researchers say that ticket buyers worldwide spent $6.1B on 3D movies last year, which was 19.3% of total box office. That was up from $2.5B in 2009, accounting for 8.6% of all ticket sales. But the big growth came outside the U.S.: Overseas audiences accounted for 63.9% of last year’s 3D sales, up from 53.8%. Hollywood can take credit: “The global market still is dominated by U.S. releases, which accounted for more than 90% of revenue from international 3D screens,” says Charlotte Jones, senior analyst for cinema at IHS. Japan was the biggest market after the U.S. generating gross 3D receipts of $471M from films including Fox’s Avatar, Disney’s Alice in Wonderland and Toy Story 3, and a local release Umizaru 3: The Last Message. Trailing Japan were the UK ($427.6M), France ($364.7M), and Russia ($336.5M). But on a per-capita basis, movie-goers in Colombia showed the most interest in 3D. The technology accounted for 35.6% of the country’s total box office sales. Among the least interested: Norway, where just 15.8% of ticket sales were for 3D. IHS says that moviegoers in China and Mexico saw the biggest markups for 3D tickets. Still, Mexico had the lowest average ticket price for 3D.
UPDATE, 3:10 PM: CEO Bob Iger told analysts that Disney hasn’t seen much change in consumer spending plans as a result of the stock market gyrations and recession talk over the last few days. He adds that he doesn’t think that price discounting at the theme parks is “something we’ll have to do quickly.” In the conference call analysts mostly wanted to know Iger’s thinking about when and how he’ll offer Disney movies and TV shows to online streaming services such as Netflix. He says that “we’re in discussions with Netflix and a number of other entities and it’s likely we’ll make more deals” soon. Online services will land ”little, if any” TV shows the same season they initially air. Iger wants to “protect and respect” current cable and satellite pay TV providers. Indeed, even though Iger wants to sell Hulu — which Disney co-owns with News Corp and Comcast’s NBC Universal — it’s unclear whether he’ll help the cause by guaranteeing that a buyer fresh Disney programming on an exclusive basis for several years. Speaking generally about online Iger says that “I don’t think we’ll make long term deals for the content. The world is changing” too quickly. “It’s exciting, but we’re still at the beginning of the beginning.”
PREVIOUS, 1:23 PM: The bad news is that Cars 2 and Thor, both released in the quarter that ended in June, were no match for last year’s Toy Story …
EXCLUSIVE: After Toy Story 3 cracked the billion dollar worldwide gross mark and got a Best Picture nomination for Disney, I’m told the studio is making moves to pair stars Tom Hanks and Tim Allen in Jungle Cruise, the live action film inspired by the venerable Magic Kingdom theme park ride. The studio has hired Roger S.H. Schulman to write a script that’s being produced by Mandeville’s David Hoberman and Todd Lieberman, who themselves are coming off a Best Picture nomination for The Fighter. No director yet, I’m told.
Schulman has written on such films as Shrek and Jungle Book 2. Disney has been trying to get Jungle Cruise out of dry dock for several years, but the combination of Hanks and Allen in a family film makes this the equivalent of an E-ticket for a family-themed film. Hanks just direct Larry Crowne, starring with Julia Roberts and producing with Playtone partner Gary Goetzman. Hanks also is attached to another family film project based on the Mattel toy Major Matt Mason, which Playtone is also producing at Universal. CAA reps Hanks.
Allen is returning to TV for the first time since Home Improvement. The new pilot will shoot in April for ABC, through Fox Studios. WME and Messina/Baker. Paradigm and Rain Management rep Schulman.
American Cinema Editors (ACE) tonight announced the winners for the 61st Annual ACE Eddie Awards recognizing outstanding editing in nine categories of film, television and documentaries. Winners were revealed during ACE’s 61st annual black-tie awards ceremony in the International Ballroom of the Beverly Hilton Hotel. Christopher Nolan received the ACE Golden Eddie Filmmaker of the Year Award, while Career Achievement honors were bestowed on veteran film editors Michael Brown, A.C.E. and Michael Kahn, A.C.E. Director Joe Sargeant presented to Brown, with Steven Spielberg presenting to Kahn. The ACE Eddie Awards is considered an integral precursor to the Oscars; no film has won Best Picture at the Oscars without also having received at least a Best Editing nomination since Ordinary People in 1981. Since the ACE membership boasts a very high crossover within its membership of Academy members, it is considered a very accurate bellweather for the eventual Oscar outcome:
NOMINEES FOR 61st ANNUAL ACE EDDIE AWARDS
BEST EDITED FEATURE FILM (DRAMATIC):
The Social Network
Angus Wall, A.C.E. & Kirk Baxter
BEST EDITED FEATURE FILM (COMEDY OR MUSICAL):
Alice in Wonderland
Chris Lebenzon, A.C.E.
BEST EDITED ANIMATED FEATURE FILM:
Toy Story 3
Ken Schretzmann & Lee Unkrich, A.C.E.
BEST EDITED DOCUMENTARY:
Exit Through the Gift Shop
Tom Fulford & Chris King
BEST EDITED HALF-HOUR SERIES FOR TELEVISION:
Modern Family: “Family Portrait”
BEST EDITED ONE-HOUR SERIES FOR COMMERCIAL TELEVISION:
The Walking Dead: “Days Gone Bye”
BEST EDITED ONE-HOUR SERIES FOR NON-COMMERCIAL TELEVISION:
Treme: “Do You Know What it Means”
Kate Sanford, A.C.E. & Alexander Hall
BEST EDITED MINISERIES OR MOTION PICTURE FOR TELEVISION:
The Deadline Team of Nikki Finke, Pete Hammond, and Mike Fleming have spent recent days interviewing the studio moguls to gauge their perspective on this very close Oscar race:
WALT DISNEY STUDIOS
12 Nominations: 5 Toy Story 3, 3 Alice In Wonderland, 1 Tron: Legacy 3D, 1 The Tempest, 1 Tangled, 1 Day & Night
DEADLINE’s Nikki Finke: You’ve never done an Oscar campaign before. These weren’t even your movies. What was the biggest challenge you were facing?
RICH ROSS: For me to be able to support films that I didn’t greenlight was putting me in the brain of a marketer. I certainly knew I was lucky that I saw Alice In Wonderland before it was complete, and I saw Toy Story 3 way before it was complete. I think what made it very easy for me, in all honesty, was working with Tim Burton on Alice or working with John Lassiter — people who pour their heart and soul into these movies. And seeing how these movies both performed and were talked about and heralded is no less thrilling because I didn’t greenlight them. I see the faces of the people who win and you know they are thrilled. And that makes me happy. I would say that the most challenging situation was coming in and coming up with a strategy of support. At the same time you don’t have relationships which people have had for 20, 30, 40 years with the different organizations who determine the outcome of those races — people in the Directors Guild or people in the Producers Guild or the Hollywood Foreign Press Association, or the National Board of Review. These are many, many organizations aside from the critics who are giving out kudos.
DEADLINE: But you had Oscar consultants.
ROSS: We already had Tony Angelotti on the animation side, and we had Kira Feola on the live action side. They’ve split up the responsibilities. And the late Ronni Chasen was working on Alice In Wonderland, too, because she had worked with the Zanucks for a very long time. So Dick had asked me if it was possible to bring in Ronni to help support the film, and of course to support the filmmaker we said sure.
DEADLINE: It must have been such a blow for everyone at Disney when she died.
ROSS: Well, it was beyond shocking because I saw her the night before and she was very much in the heat of the moment because she was very close with the Zanucks and so when it happened it was very tough.
DEADLINE: You’ve done plenty of Emmy campaigns. What is the difference do you think now?
ROSS: The Emmy campaign is so much more targeted because you’re really going for one group of people who are voting on that series of awards. The Oscar campaign difference is the diversity of the groups. You have to thread the needle. You are going from literally that first National Board of Review list through every critics group that are in Iowa and St. Louis to all the Guild groups til you get to the Oscar nomination and an Oscar win.
DEADLINE: Let’s talk about Alice in Wonderland first. It didn’t get a Best Picture nomination.
ROSS: My feeling on Alice was I knew going into it we had a proverbial issue of timing. Obviously, it made a billion dollars. But that doesn’t help you. It opened in March. So it was about getting people to remember what they saw. Aside from the problem of when they do see it, the No. 2 challenge is commercialism which seems to come up every year. Last year the ultimate was with Avatar vs The Hurt Locker where people felt Avatar already had its success because the box office was there. It’s not that it doesn’t get attention but it’s definitely a challenge in terms of people’s interpretation of the Awards season. And one of the curious things for me was Mia Wasikowska who was doing her first film and held together a $150 million plus film that made a billion dollars. And when people are talking about breakout stars, I would stand around talking about her, and they are like, ‘Really?’ Now she’s getting huge movies and I believe she will be a huge star. But to me that was the most curious.
DEADLINE: And then Tim Burton has been pretty much ignored by Oscar voters.
ROSS: I think he’s clearly at the top of his game. This was a giant year for him and I assume he wanted to be appreciated. I do believe that day will come before it has to be an honorary Oscar. And I don’t believe it will be a small movie, Nikki. I do believe it will be some substantial commercial film where people will say, ‘It’s about time.’
Brad Bird won the Winsor McCay Award at the 38th Annual Annies for his work on animated films from Iron Giant to The Incredibles and Toy Story 3. Bird is currently directing his first big live action feature in Mission: Impossible-Ghost Protocol, and says he’s leaving animation behind. Only I’m not sure he means it. Fast forward to 4:30 and see what I mean.