Walt Disney (DIS 1.94%) needed a box office hit to get back on track over the weekend. Indiana Jones and the Dial of Destiny failed to woo summer audiences back to the movie theater. The fifth installment of the iconic franchise starring Harrison Ford as the trouble-digging archaeologist generated just $60 million in domestic ticket sales in its debut weekend. It collected another $70 million internationally.
With an estimated $250 million to $300 million production budget, it's now possible that the film will fail to turn a profit. It's bad news for Disney, of course. It's also unwelcome news for multiplex operators as well as competing movie studios. Let's do what Dr. Jones would do in a situation like this: dig a little deeper to find answers.
Jock, start the engine
Disney was having a good run in recent months. From November of last year to the end of May it had five of the six highest-grossing domestic theatrical releases. Its winning streak ran out in June with Pixar's Elemental slumping at the box office and the new Indiana Jones film failing to fill seats.
How bad was the $60 million debut? One can argue that Dial of Destiny generated more box office receipts than all but one of the previous franchise premieres, but that's not adjusted for inflation. The earlier entries came out ages ago when ticket prices were substantially lower. The more sobering way to approach the film's initial performance is that it opened 40% lower than 2008's Kingdom of the Crystal Skull, but the number of tickets sold this time around was actually 59% lower based on average ticket prices.
This is problematic for more than just Disney. Temperatures are surging this summer, making the air-conditioned respite that movie theaters provide an obvious place for folks to go. It's not happening. This is also an action movie, typically the kind of movie that folks demand to see on the silver screen instead of just waiting until it springs up on a streaming service a couple of months later. With Warner Bros. Discovery's The Flash also tanking at the multiplex in June it's a troublesome sign for all players making big-budgeted bets on superhero adventures.
Image source: Getty Images.
It's still early, of course. Like Jones' signature whip, the new film could wind up having a long tail. Disney saw what happened with Encanto. A disappointing theatrical run in late 2021 didn't stop it from becoming a big cult fave with audiences on Disney+ and theme park visitors.
The problem for Disney investors is that the initial disappointment at the box office will lead to the market being more critical on the next potential blockbuster. All eyes will now turn to the Haunted Mansion release later this month. Then it could be a dry spell until The Marvels rolls out in November ahead of the holiday season.
Bulls will argue that Disney is a diversified media stock. If a movie flops it won't be long before it has another film, TV show, or theme park attraction to help draw audiences. However, with the stock failing to participate in this year's rally it needed this hit to get the Disney flywheel going.
