The media is abuzz with the results of the latest box-office contest. News Corp.'s
The stats are overpowering -- Borat mocked its way to the top spot, pulling in more than $26.4 million domestically (all movie data courtesy Boxofficemojo.com). Disney's The Santa Clause 3 grossed $19.5 million, coming in second. It couldn't even crack $20 million. Ouch. In comparison, the first picture in the series did about the same amount of money in its opening, while the second one grossed $29 million. Other flicks that got bumped by the celluloid phenomenon include a co-production by DreamWorks Animation
Here's the metric that's fascinating movie economists: Borat's per-theater average was an outstanding $31,607. The Santa Clause 3's per-theater average was $5,640. The Disney film was booked in more than four times as many locations as Borat -- in fact, the latter was in considerably less than 1,000 theaters.
I knew Borat would do well, but I didn't predict this. I thought Bob Iger had everything under control, since the Santa Clause had done well in the past. Donning my Monday-morning quarterback uniform, I can see that Borat was destined to upset all the biggies. Whenever I saw a clip of the character's shenanigans, I found myself musing -- after settling down from laughing at levels dangerous to physiological status quo -- about the inarguable genius of the concept and the effective skill of the promotional machine behind it. Borat and his satirical parade were everywhere, and prospective ticket buyers became hooked.
These results make me question Bob Iger's decision to reduce Disney's live-action movie output and focus on Disney-branded films. As can be seen, there will never be a guarantee that a film carrying the Disney label as opposed to the Touchstone moniker will be a runaway hit. To me, this is just too limiting a strategy, and it doesn't allow the company to expose itself to a wide variety of ideas. Reducing the number of movies the studio greenlights is also questionable, since it takes a lot of attempts to score a few big hits. It's difficult to predict which piece of celluloid will be the next Titanic, so it's best to seed a bunch of productions. Sure, The Chronicles of Narnia and Pirates of the Caribbean have been huge hits for the company, but does that mean that the studio should forgo concentrating on finding another Armageddon? OK, I didn't like the film, either, but it grossed more than $550 million worldwide back in 1998.
There's value to distributing movies outside the Disney banner. You'll never see Walt Disney Pictures presenting racy, horrific plotlines, but they can make money just as well as a Pirates picture can -- and maybe at lesser budgets. In the end, Disney will do what it wants and what it feels comfortable with -- but it should remember this past weekend. It should also remember that, as Rick Munarriz previously pointed out, Touchstone was created to explore financial opportunities with more intense fare after Disney's movie The Black Hole was given a PG rating. That made sense then, and it makes sense today.
There's a lesson to be learned from Borat -- don't underestimate the competition. Robust marketing and hip satire can trump big franchises. Solution? Program a diversified portfolio of product under a variety of branding techniques. The Disney brand is powerful, don't get me wrong; you've got your Narnia's and your Pirates, but you've also got your third Santa Clause and your Shaggy Dog remake -- which, by the way, also starred Tim Allen.
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Fool contributor Steven Mallas owns shares of Disney -- he's a big fan of The Black Hole and would love to see it remade. As of this writing, he was ranked 2,215 out of 12,276 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
