Walt Disney Co.‘s (NYSE:DIS) movie business hasn’t been having a stellar year. Even just five years ago, Disney was among those studios consistently demolishing box office records. Whether with Pixar-made animated features like Up, tween-targeted, low-cost monsters like High School Musical or family-friendly action adventures like National Treasure, the company was pumping out hit after hit, much as it had done for years. A string of underperforming sequels and new franchise attempts over the past eighteen months, however, has failed to re-create the magic.
But now there are signs the company might be climbing back to the top of the box office mountain, although it probably won’t be happening with new material. Disney has found its first runaway hit in 2011 with the 3D re-release of The Lion King.
The 1994 animated feature was converted to 3D for its Blu-ray release. A limited theatrical re-release opened Friday and gave Disney the No. 1 spot on the weekend box office charts, earning $8.8 million on Friday night alone and pulling in $29.3 million by Monday. That’s a fraction of the $109 million worldwide gross earned by the company’s summer Pixar picture, Cars 2. That movie, however, cost Disney $200 million to produce, whereas it costs approximately $8 million or less to convert an older 2-D film to 3D. Disney earned back its investment with The Lion King in just one night, and the run has the better part of two weeks left.
Disney is one of the few film companies out there that hasn’t been stung by consumer backlash to 3D. The Lion King is just the latest in a string of lucrative 3D legacy releases from the company. The November 2009 re-release of Toy Story and Toy Story 2 pulled in $30.7 million in the U.S., and the conversion to 3-D of computer-animated features costs approximately half of what it does for hand-animated and live-action movies. A 3D conversion of Beauty and the Beast played for two weeks at the El Capitan theater in Hollywood, and a wide theatrical release is planned for either later this year or early 2012.
The profits brought in from these re-releases has got to have Disney wondering if it might mollify shifty investors by simply recycling its most popular properties. The company certainly could use the easy money. There has been more than one unfortunate flop for Disney this year. March’s Mars Needs Moms cost $150 million to produce and made just $39.5 million at the box office; Winnie the Pooh cost $30 million and grossed just $33 million; Cars 2 made close to $548 million worldwide, which is nothing to sneeze at until it’s compared to the more than $1 billion earned by 2010′s Toy Story 3.
The company’s once booming tween-centric cinema offerings have also begun to flag. April’s Prom cost only $8 million to produce but earned only $10 million — especially disappointing considering that the $11 million High School Musical 3 earned $252 million in 2008. Even the company’s tent-pole picture Pirates of the Caribbean: On Stranger Tides, which has earned more than $1 billion since releasing in May, has disappointed by not matching the total gross of 2006′s Pirates of the Caribbean: Dead Man’s Chest.
Relying too heavily on 3D re-releases of its classic films isn’t a winning strategy for Disney. Consumers have proven time and again that 3D isn’t a key value proposition for them. Disney needs something to make its shares pop again, though, and if a handful of strategically released 3D conversions of classics like Aladdin and others in the vault can pull in some easy revenue for the company’s Hollywood operation, Disney would be foolish not to strike. The company already delayed Beauty and the Beast‘s wide 3D release to avoid flooding the market. Disney is playing this one smart.