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Monday Mouse Watch: How Disney plans to drive up sales of the DVD version of "Cars"

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Monday Mouse Watch: How Disney plans to drive up sales of the DVD version of "Cars"

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What a surprise. It's Monday morning and JHM is running yet another "Cars" -related story.

Okay. I know. A lot of you have already had your fill of this subject. Particularly those of you who have had a hard time accepting the premise that I've been trying to float for the past few months. Mainly that a movie that's earned (to date) $239.5 million during its initial domestic run, making it the second highest grossing motion picture of 2006 (so far), could still (in certain circles, anyway) be considered a disappointment.

No matter how many investment analysts & reporters I quote from and/or pertinent stories that I link directly back to, there are still JHM readers who flat-out refuse to accept this premise. They just can't believe that anyone in Tinseltown and/or the investment community would ever actually think this way about this particular movie.

Well, as it turns out, I'm no longer the only writer who's noticed the negative impact that Wall Street's initial financial projections has been having on Hollywood's attitude toward this year's crop of top grossing films. This past Friday, Laura M. Holson of the New York Times actually wrote an in-depth article about this very same subject, "Caught on Film: A Growing Unease in Hollywood." Where -- thanks to the investment community's inflated expectations for Tinseltown's supposedly-just-can't-miss blockbusters -- even ...

" ... Films like the Peter JacksonKing Kong” (are now) considered disappointments, despite bringing in $549 million at the worldwide box office."

As I read Ms. Holson's story ... I gotta tell you, folks, I felt this weird mixture of vindication and deja vu. I mean, here was a reporter from one of America's leading newspapers basically saying what I'd been saying for the past three months. Hell, this particular NY Times article even went so far as to bolster the claims that Roger Colton had made in last Thursday's column, "The Cold Streak That Just Wouldn't End,") when Laura went on to talk about how ...

" ... even profitable Warner movies are cause for anxiety because Hollywood is quick to label anything a loser that does not meet prerelease expectations.

For example, “Superman Returns” by Warner cost $209 million to make and (president of the studio Alan F.) Horn predicted it would garner $400 million at the worldwide box office (a respectable sum), which he said ensured a profit after DVD and television sales. But many in Hollywood expected it to bring in at least $500 million given Superman’s popularity and the publicity around the movie’s release. Mr. Horn said, “People are asking, ‘Are you disappointed?’ I don’t know how to relate to that. I don’t know what to say.”

Okay. So hopefully this NY Times article will finally be enough to convince a certain segment of JHM's readership that what I've been trying to tell you guys this summer (I.E. That these days in Hollywood, it's not enough that your film just makes a whole lot of money. Nowadays -- in order to be considered a real success -- your motion picture not only has to be a blockbuster. It also has to meet the initial financial projections that the investment community has laid out for that particular production) is -- in fact -- true. That this is the way that people-in-power in Hollywood & Wall Street are actually thinking & talking these days.

So now can we please put this particular discussion to rest?


Well, I guess I should have expected as such from all you die-hard "Cars" fans out there. You guys are just never going to accept the fact that this John Lasseter film failed to meet Wall Street's original expectations. That they were hoping for a "Finding Nemo" -sized hit from Disney this summer and didn't get one. Which is why the investment community (as well as a significant number of Mouse House executives) are somewhat disappointed with how this Pixar production has performed at the box office.

"But ... But ... But ...," you "Cars" defenders sputter. "Even if this John Lasseter film did miss the investment community's initial financial projections for its domestic run as well as under-perform overseas, that's not going to matter come November 7th. For once 'Cars' finally comes out on DVD, this Pixar Animation Studios film is sure to make beaucoup bucks."

Well, that is true. The DVD version of "Cars" is almost certain to make a fortune.

Copyright 2006 Disney/Pixar

Of course, when I say " ... make a fortune," what I really mean is " ... make as much money as this disc possibly can during the first six weeks that it sits on store shelves."

"Why just six weeks?," you ask. Well, this is where the Big Box stores -- particularly Wal-Mart -- enter the retail equation. Now you have to understand that nearly 40% of all new DVDs that are sold these days are now sold at Wal-Mart. With 50% (and sometimes -- in the case of a very popular, highly anticipated film finally coming out on DVD -- 70%) of those sales happening in the first seven days that these discs are on store shelves.

Now the downside of this situation is ... Well, given how tightly the Big Boxes control their inventories these days, a new DVD is only given a limited amount of time to take up shelf space. Typically after just six weeks time, the majority of these discs are then packed up and sent back to their original distributor. Which (in spite of all the recent talk about how the "long tail" theory is supposedly transforming the retail world) severely limits a studio's opportunity to continue to cash in on a particular title.

You may recall how this returning-unsold-DVDs-to-their-original-distributor practice was actually what got both Dreamworks & Pixar in trouble back in the summer of 2005. When each of these animation studios were forced to restate earnings-per-share projections for that quarter. Thanks -- in large part -- to the huge financial impact of Wal-Mart, Best Buy and Target suddenly returning millions of unsold units of "Shrek 2" & "The Incredibles" had on Dreamworks & Pixar's original financial forecasts for these two films.

Now if the prevailing retail conditions weren't already making it pretty difficult for these "Cars" discs to achieve record sales, let's consider what other popular recent Walt Disney Pictures release will also be coming out on DVD during the 2006 holiday season? That's right, "Pirates of the Caribbean: Dead Man's Chest." Which is due to hit store shelves on December 5th of this year.

And given that the investment community (just as they did with "Cars" theatrical release) will be carefully monitoring sales levels for the DVD version of this John Lasseter film (And if these discs don't sell all that well ... Well, look for all that talk about how the Walt Disney Company supposedly paid too much for Pixar Animation Studios to get considerably louder) ... Well, Disney Consumer Products is now looking for ways to artificially extend the shelf life of "Cars" DVDs.

Among the concepts that DCP is now pushing on the Big Box stores is the "Cars" feature store. Which would literally be a smallish store-within-the-store that would feature "Cars" merchandise. And among the items that would be prominently displayed in this feature store would be (surprise, surprise) the "Cars" DVD.

Look for these "Cars" feature stores to pop up in your local Wal-Mart, Target and Toys 'R' Us during the first week of November (Just in time for the DVD's release). Then look for these specialty store-within-the-store to stay in operation all the way through to the after-Christmas sales. Thereby artificially extending the sales of these discs by at least 2-to-3 weeks.

Sooo ... Will all this additional effort (More importantly, high sales figures for the DVD version of this Pixar production) finally be enough to convince Wall Street that "Cars" was actually a success? Or is this John Lasseter film still doomed to be labelled "Pixar's first disappointment"?

Your thoughts?

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  • Jim -- I would argue that it is going to be difficult keeping your faithful readers when you keep attacking us.  The way you write about how we debate your facts is as though we are so utterly stupid that we are unable to make a simple utterance without beginning it, "but but but..."

    I think that you simply giving an actual review of the film Cars might go a long way toward allaying your readers' concenrs.  Jim -- just write a one paragraph article about the movie itself -- not the gross of it.

    I don't know if you have a vendetta against Lasseter or not.  I don't really care.

    I don't know if you've thought about it, but a lot of those extra hits you're getting are probably from people coming back to see the mudslinging going on in your forums, not necessarily NEW and VALUABLE readers.

    I'm sure AskMike will come on soon with his usual apologist bent toward you.  Bring it, Ask Mike.  Bring it.

    This site has divided into two factions -- normal people who want to know where your motivation to attack your readers is coming from (and also if you have a personal issue with the film Cars), and you and AskMike, who constantly talk down to the rest of us as if we were complete and total morons.

    I'm holding you to task for this Jim (and you, too, AskMike).  Why do you treat us like redheaded stepchildren?  And please, praytell, give us your own honest to goodness review of Cars that doesn't involve its box office.  How hard can that be?
  • Paragraph 2 should say "concerns," for the grammar Nazis...
  • Jim, I have been a fan of your site for quite a few years now. I never write comments and I never send E-mails expressing my thoughts about what you write because you have a right to write what you want on your own site. However, this past article is the last straw for me. As my first comment as a longtime fan of you and your site, I am writing in to tell you just how much faith I lost in you. I get your point about "Cars" not being a success. I understand and to some degree, agree that it wasn't a big success like it was projected to be.

    What bugs me here is that you, knowing that some people don't agree with you is bothering you. It's causing you to talk down to everyone like we're morons (as jimiscrazy stated above -- I agree with everything he said). I feel like you are trying to convert everyone to your religion (metaphorically). In my opinion you have become a spiteful unprofessional cynic. This is a blatant “I told you so” to all the people who “don’t get it” just because one other person in this world wrote what you have been writing all this time. Remember, this comment is coming from someone who understands and agrees with what you're saying. This isn't just sending out your opinion for discussion anymore. You're talking down to those who disagree and trying your hardest to change their minds. Worse yet, you're doing it to your long time biggest fans. Shame on you, Jim. Shame on you.
  • "Okay. I know. A lot of you have already had your fill of this subject. Particularly those of you who have had a hard time accepting the premise that I've been trying to float for the past few months. Mainly that a movie that's earned (to date) $239.5 million during its initial domestic run, making it the second highest grossing motion picture of 2006 (so far), could still (in certain circles, anyway) be considered a disappointment.

    No matter how many investment analysts & reporters I quote from and/or pertinent stories that I link directly back to, there are still JHM readers who flat-out refuse to accept this premise. They just can't believe that anyone in Tinseltown and/or the investment community would ever actually think this way about this particular movie."
    Yes, Jim.  It's all our fault.  We're bad...Bad, bad, bad.
    Bad ol' readers!

    And please keep in mind:  NO ONE IS ARGUING that Wall Street was plain out of its loopy, inexperienced ol' head when it thought Cars would outgross Nemo, and then tried to blame other people (like readers, for instance), when they turned out to be wrong.
    We're just asking which way the wind is blowing today:  -Was- it Wall Street's mainstream-newbie fault for overshooting the runway, because they thought all animated movies were the same, no matter what year they were released in, or are we to believe they're a harbinger of The Secret No One Dare Speak, ie., "Maybe it wasn't so good after all, so let's fire Lasseter!"

    And until you can settle on one answer to that question and stick with it from article to article, quit turning the machine guns on your own troops.
    I know the Jim Who Was Kicked Out of Disneyland is on the "Perecuted" High that accompanies a rampaging ego, but please keep in mind how much it doth profit a website to gain "new eyeballs" and lose its core-reader soul.
  • I don't normally make comments on articles, but I have to comment here on the tone of your article.  You're talking down to your readers, and that is the kind of attitude that most people hate about those in the media.  That arrogant, condescending "I'm right and to hell with the rest of you" tone grates on people more than you'll ever know.

    So there are some stalwart defenders of the movie Cars.  SO WHAT!!  Is is really that big of a deal that you have to come out with yet ANOTHER article about the same subject over and over.  They've all essentially said the ssame thing," See!  I the great Jim Hill am right, and you are wrong.  It shows how little class you actually have as a person, and as a professional writer.  You should be ashamed of this article, and consider doing the smart thing and let the issue DIE!!
  • Bad form, Mr. Hill.  Bad form.

    You may keep those "new eyeballs" with stuff like this, but the people who have been around for a while could quickly delete their bookmarks and move on.  And then maybe we could see how many "new eyeballs" there were, and how many of the extra hits were the same people returning to the comments section.

    Insulting your fanbase is bad business.  And in some ways, it's like you tried to do it behind everyone's backs, thanks to Friday's post saying (and I'm paraphrasing) "If you don't like financial stories, don't come to the site on Mondays."  And then you pull this.

    Yeah, I'm sure it's frustrating for you; people haven't exactly been kind to you since this Cars business has begun, but I'd like to think there has been a lot of justified (and sometimes constructive) criticism handed out.

    But face it- there are people out there who like (even love) this FILM.  And they don't care about Wall Street; they see that it has made tons of money, has done insane business with the merchandising, and thanks to that, view it as a success on its own merits- not in comparison to a movie that came out a few years ago.

    It's clear to me that you don't care about Cars as a film.  You only seem to see it the same way Wall Street sees it- as a product.

    Film is a tricky industry, because there are simultaneously two bottom lines- an artistic bottom line, and a financial bottom line.

    By only caring about the financial bottom line, and putting so much stock (no pun intended) in Wall Street's predictions and view points, it's possible that the artistic bottom line could start becoming dimmer and dimmer (and some would argue it already has).

    Maybe we're weird because we don't really care about what Wall Street theoretically decides a movie should make.  But maybe we're right in thinking that maybe they don't know everything.  Maybe there are numerous factors that make a film "successful" to us, and we see that Cars is the second highest grossing flick of the year (amidst a field of flicks like X3 and Superman that seemed like potential box office titans), and that it has produced a merchandising bonanza, and that on top of that stuff, it was a good flick.  And that's enough for us to say that it isn't a disappointment.
  • Again, (even if he points out the "And its poor business overseas", despite our practically screaming in his ear "It hasn't even OPENED in half its overseas business yet!" the last article) I'm just not sure what the -point- that Jim is trying to personally vindicate his sacred honor on, here:
    "Just you foolish people watch:  Wall Street will be wrong again, and -then- you'll be sorry, so there!"

    What -exactly- is the point the Smarter-Than-We-Are Jim supposedly wants us to be chagrined and shaking in our socks about?  That:
    A) Wall Street execs are blind optimists who judge movies like race horses and not like movies,
    B) The movie didn't do as much business as somebody else thought it did, so they're must be something wrong with it,
    C) If they're wrong and -think- that a company underperformed, they'll "punish" the company into bankruptcy with more bad jumped-to conclusions,
    D) We may think a movie is good, but we can't predict the Big Business world, so there!...Nyeh!

    Umm, okay...So, why the attack?  Seems like A) would be grounds for -defending- the movie's specific points (and hey, you're talking to the champion Treasure Planet defender on the boards, I know what these battles look like), B) would be taking the exact same sides as the "foolish" Wall St. execs that make such legendarily bad decisions as we're led to believe, and C) or D) would seem like fairly threatening scenarios to try and PREVENT.
    Unless, of course...we were rooting for them to happen.  Because someone wanted to Told You So about a certain Pixar executive.

    Look:  WE know Wall St. was wrong for being franchise-brained enough to think a movie would outgross its last one just for showing up, and apparently you do, too.  That's common ground.  Can we get that much through our thick craniums?
    Does our saying anything good about the movie itself whatsoever somehow now make us "raving fanboys" who have now pitted ourselves against you to the last man, like rabid do-or-die Star Wars fans at a convention?
    Or is the "We know what you're -really- saying" cause that readers take you to task for just too ingrained to give up on, so we must clearly be incensed by your Brave Iconoclastic Article--It couldn't be anything ELSE, after all!
  • To help fight back against this LUDICROUS (and frankly fairly damn nutty) notion that Jim seems to have about his readership, this officially exiles me from this site.

    I'm done.
  • jimiscrazy said:
    "I'm sure AskMike will come on soon with his usual apologist bent toward you.  Bring it, Ask Mike.  Bring it."
    Not to play "divide and conquer" among the readership (which I'm sure would make Jim's current "persecuted" self-image very happy, that we're too disorganized a rabble to a threat), but an interesting micro-illustration of the larger problem:
    Going by previous examples, AskMike would pompously pretend to be Voice of Reason and say "Now, now, people...He's just talking about the DVD."

    And well, good point:  What IS this week's Mousewatch Monday technically about?
    Jim just doesn't get up one morning and decide to take another swing at Lasseter, you know--There has to be some quote, or interview, or news-feed content on the PR wire circuit that generates the article to begin with.  Followed, of course, by "his thoughts" on What It Could Mean.

    And what was this week's news headline, for August 21, 2006?:
    - Disney officially press-releases Cars DVD for October,
    - Announces wide marketing strategy for Wal-Mart and Target,
    - Including exclusive bonuses such as toy-including packages, etc., at the major retailers.

    That's the Feed....What's the Spin, ala JHM?:
    - "Disney officially press-releases Cars DVD for October, and it's their last chance to pull this one out of the fire, before bad word of mouth and disappointed industry expectations could sink the company by the end of the game...Happened with Dreamworks, you know."
    - "Announces wide marketing strategy for Wal-Mart and Target, but rotsa ruck, since the major retailers are too focused on a six-week quick-rotation bottom line to try and support a product that Disney's pinned their future on."
    - "Including exclusive bonuses such as toy-including packages, etc. at the major retailers, and don't that look like grabbing at straws at the eleventh hour."

    The News isn't the problem here, Jim....It's the Spin.  And it's doing EXACTLY what we've accusing you of all along:  When news isn't News, what is it?
  • I, personally, didn't feel talked down to when I read the article, and I'm a long-time reader.  I come to get the news, whatever it may be.  My comment is...
    "Cars" will only be a 1-Disc DVD, so I'm wondering whether Pixar has a 2-Disc Collector's Edition in mind for the years to come.  That could make "Cars" more profitable.  I loved the movie and I don't care what kind of money it brings in (heck, I love "The Black Cauldron".  Enough said!).

    ~P.S.- Will there be anymore SIGGRAPH articles coming?~
  • I'm pretty sure the "long tail" theory doesn't apply to DVDs in big box retailers.  It fits better in situations where the storage and distribution costs of, say, 1,000,000 widgets isn't much more than that of 100,000 widgets.  iTunes is a good example of this, since the infrastructure costs of having ten bajillion songs available online isn't much more than having one bajillion songs.

    Retailers have finite shelf space (to Jim's point), so the long tail theory doesn't really apply.  But, you know, I could be wrong.  ;-)
  • You know, I just don't get it. You just let us in on why you have been posting so many business type articles that most of us "core" readers are tired of. Fair enough, they get more site business. Great, I'm for anything that keps a good site up and running. So, it's Monday and I expect to read a business article. No problem, the site's free and if I don't like what I see I can go elsewhere. But, I don't.  I read it anyway because despite the business side of things being my least favorite subject, I do like to learn about it.  I figure today you'll open with an article to win us over to the new format. So, I can't quite fathom why for your first foray into the announced new format you choose to open with yet another CARS piece. It's the one thing we are sick of. We all get it.  It cost too much and didn't make enough money to be considered a success.  You've only told us this a few dozen (maybe an exaggeration) times. As a matter of fact, all your business articles are just downers. And that is what we are sick of, Jim. It's not that we don't get it, or just don't want to believe that CARS isn't the success the business world wants it to be.  We're just sick of reading about it over and over.  You have some twisted obsession with it. And with this article you are actually insulting your readership. Was it intentional?  Or are you just losing it?  Do you have some compulisive need for us to say "Gosh, Jim you were right, Cars wasn't a big hit!" Okay, fine.  CARS was not as profitable as it needed to be. But, the movie was a BIG HIT. It put butts in seats and took in tons of money.  That means it is a HIT. Having said that, it is just not a PROFITABLE hit. And this is where you screw it all up. All you keep doing is beating the dead horse over the fact that the movie didn't meet it's financial projections. It isn't the only movie this summer to do that, but it seems to be the only one you want to beat up and insult your readership with.  Get over it. Let's have a different subject each Monday where busines is concerned. And for the love of god, please finish some of those articles that we have all been waiting oh-so-patiently for, as well as the CD that we all already PAID FOR that is still not showing up. And don't insult us.  It's definitely not the way to get support for your site.
  • Jim,
    It has been a good (mostly) run, but now its time to say good-by, M-I-C see ya round, K-E-Y, why because you don't want us anymore,  M-O-U-S-E

  • Sigh...Jim, I usually admire your work. I even usually love the business articles because, like it or not, that's a major, major part of the film industry, but this? Smacks of filler. Not enough material to justify 20 paragraphs, so each half of the article repeats itself over and over (and over) again. Remember the movie "Summer School" when Chainsaw & Dave had to write a 200-word essay? They didn't come up with enough actual content, so the end of their essay was, "...and that is why we admire Rick Baker very, very, very, very...insert 50 more "verys" here...very, very much."

    Seriously, that's the first thing that popped into my head when I read this article. The "I'm right, y'all are wrong, NYT says so, neener, neener" part? 1 or 2 paragraphs and be done with it. The actual article? If you only have 2 or 3 paragraphs of actual substance, either find more substance or write your 2 or 3 paragraphs and call it a day.

    Someone upthread mentioned that unlike previous PIXAR releases since "Monsters, Inc.," "Cars" will only be offered as a 1-disc set. *That's* an interesting business-related story - Why? Will that save enough money to boost profits? How many potential buyers will be turned off, or will wait for the eventual 2-disc release? And...how many will keep waiting (like us poor schlubs waiting for a 2-disc "Lilo & Stitch" set) for something that may never come? And 1-disc or not, how many people will buy the "Cars" DVD on street date because they just want the movie & don't care about bonus features? How does PIXAR feel about the 1-disc move?

  • Wow, this pretty much proves that SOME of you guys either do not read all of Jim's articles or you just don't comprehend them. Jim specifically said in Friday's article that Mondays *WILL* be business articles (in this sort of style). You have absolutely no excuse to b*tch about the subject of this article. If you don't like reading them, DON'T READ THEM!!!!!!!!!!!!! It is no longer a secret. If you don't like these type of articles, don't come here on Mondays. But if you do come here to read this, don't you have the nerve to complain about it (even though you knew what you were about to read).

    I'm not defending Jim here, I'm defending what is right. Yes, he could have worded the article differently, but his poitn remains the same.l If this looks like I'm talking down to you, so be it. I am utterly sick of people coming to the board and complaining about these articles when he specifically said he was going to write them every Monday (as they bumped the traffic levels here). If you don't like these articles, just don't come here on Mondays. Al Lutz isn't holding you up to a computer forcing you to read this. You didn't have to pay a $25 subscription fee to read this. It is a free article written on a free site.

    And jimiscrazy, I already gave my review on cars, but I guess you have selective reading.

    "What bugs me here is that you, knowing that some people don't agree with you is bothering you. It's causing you to talk down to everyone like we're morons."
    Let's turn that around for a second. In the previous articles, many of the users were extremely bothered that Jim didn't have the same opinion as them? These users resorted to attacking Jim. Is that right? Interesting that when people attack Jim it's okay but the second Jim makes a semi-controversal remark, everyone here is up in arms. To me, Jim's words are not of attack but rather of defense.

    And if some of you feel the need to leave because you didn't get the concept of financial articles on Monday, so be it. Perhaps there will be less attacks now in the comments section. Some of you say you are longtime readers, but that does not equal longtime quality readers. Supposed longtime readers who resort to attacking Jim just aren't quality or loyal readers. Did longtime quality Michael Jordan fans abandon him during his baseball years? Are longtime quality Michael Jackson fans abandoning him now? Quality fans are there through good times and bad. And if I was a writer, those are the type of readers I would want, not ones who leave your site because they don't like one of your articles. You don't have to like all of Jim's articles. You can even complain about them. But to attack Jim & then say your leaving because you don't like 2 or 3 of his articles is just crazy in my opinion.

    Now to comment on the article itself.... I think the store within a store concept is a good idea. I think Cars will have a good run on DVD (at least through November, before DMC arrives) the first time around. And then I figure in about 5-10 years, they'll be releasing a Blu-ray version (and of course an anniversary DVD), making it even more money on that front. But yes, Cars is going to have a tough competition on the DVD front. Just 2 weeks before, Over the Hedge is released. The week before Monster House is released. Ice Age 2 is released just 2 weeks later & after that is Pirates. And I'm sure Ant Bully & Barnyard will be released sometime then. Even with the competition though, it should do good.
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