Disney space movie tests big-budget film strategy
By Lisa Richwine and Ronald Grover
LOS ANGELES (Reuters) - "John Carter," the 3D space adventure film that opens today, was supposed to be the Walt Disney Co's latest franchise movie, a blockbuster on par with "Cars" and "Pirates of the Caribbean" that generates profits beyond the film to television, books, and consumer products.
Instead, industry tracking suggests it will be the latest big-budget box office bust.
While Hollywood's hit-and-miss nature has always made it an inherently risky investment, the possible failure of "John Carter" underscores the increased risk studios have taken in recent years by reducing the number of movies they produce to focus on big-budget films.
Betting on big-budget movies -- called "tent poles" because they are meant to hold up the rest of the studio's slate -- is a high-risk, high-reward business. Winners pay hefty dividends for years with film sequels, toys, video games and even theme-park rides. A flop can cost tens of millions of dollars.
Evercore Partners analyst Alan Gould estimates "John Carter" could lose $165 million.
Disney knows the cost of failure all too well. The company last year took a write-down of more than $70 million after its animated movie "Mars Needs Moms" tanked. The poor performance of that film had repercussions beyond the studio division, dragging down the media giant's overall quarterly earnings to below analyst forecasts, sending its shares tumbling 3 percent.
"Green Lantern," the silver screen version of the superhero comic book character, was supposed to be a franchise film for Warner Bros last year. Instead, Time Warner Inc Chief Executive Jeff Bewkes, said it "fell fairly far short" of expectations, pulling in just $222 million around the world on an estimated production budget of $200 million, according to website BoxOfficeMojo.com.
That figure excludes the tens of millions that studios usually spend to market and advertise a movie with a production budget of that size. Continued...