I know that this will sound like a very unlikely tale. But trust me, folks. This info comes straight from a very connected someone very high up in the Mouse House’s food chain.
Over the past few months, there have been a lot of stories out there about why exactly the Walt Disney Company decided to deny “The Three Musketeers” a theatrical release. Some folks will tell that the Mouse did this because releasing this Buena Vista Home Entertainment’s video premiere to theaters didn’t really fit in with Michael Eisner to totally kill off Walt Disney Studio’s traditional animation operation. Still others will tell you this was all because Michael doesn’t really like Mickey & Co. That Disney’s CEO would much prefer to promote characters that were created on his watch (I.E. “Beauty and the Beast,” “Aladdin,” “The Lion King” et al).
But you wanna know the REAL reason that “The Three Musketeers” went straight to video & DVD? I can sum it up in one word: Walmart.
“What does Walmart have to do with determining which BVHE home premieres get released to theaters?,” you ask. Well — to understand what’s actually going on here — first you have to wrap your head around a pretty amazing fact: 15 – 20% of all of the DVDs that are currently sold in the United States are sold at Walmart.
Okay. Now here’s where the story gets a little weird: You have to understand that one of the keys to Walmart’s success is standardization. As is: If you walk into any one of this retail giant’s 3000+ superstores nationwide. And you’re going to find the items that you’re looking for pretty much in the same place every time.
Yeah, the late Sam Walton (Walmart’s owner) is said to be an absolute nut when it comes to standardization. So — in order to keep things similiar between all those different stores — the company uses these formulas to determine what goes where. And among the more bizarre equations that Walmart execs allegedly use is the one which helps the retail giant determine which DVDs get the most shelf space, in-store promotion as well as space in the weekly flyer.
The key component of this formula (so says my sources) is a film’s box office performance. If a movie is a blockbuster (I.E. Grossing over $100 million during its initial domestic run), Walmart naturally expects to sell a ton of that product once that film goes to DVD. So — to properly support the sale of that DVD — Walmart will clear plenty of shelf space, feature the product prominently in the retail chain’s weekly flyer as well as poster banners at each of its stores’ entrances. All in an effort to make consumer aware that this movie is now available for purchase.
If — on the other hand — a film does NOT qualify for blockbuster status during its domestic run, Walmart will significantly scale back its promotional efforts for that picture once it debuts on DVD. Which means less shelf space for that product, a smaller picture of the DVD in the weekly flyer, etc. You’re getting the picture, right?
Alright. Now let’s talk about the Walt Disney Company. Which — for a while there, anyway — began to view the theatrical releases for these direct-to-video sequels like “The Tigger Movie,” “The Jungle Book II” and “Return to Neverland“ as very profitable promotions for those films’ sooner-rather-than-later releases on VHS and DVD.
As one unnamed Disney exec told me ‘way back in February of 2002 (Right about the time that the “Peter Pan” sequel first flew into theaters):
“This theatrical release? It’s found money for us, Jim. When ‘Return to Neverland’ was first greenlit, we never intended to release it to theaters. This ‘Peter Pan’ sequel was originally supposed to be a video premiere. Nothing more.
But nowadays, the feeling in-house is: Why not throw the really good looking video premieres out into theaters PRIOR to their showing up on store shelves. Build up consumers’ awareness of the product. Then — six months further down the line, when we put the DVD out on store shelves — we’ve already primed the pump so to speak.
We’ve gotten people all excited about the idea of picking up a copy of this film off of a store shelf. When that was where this video premiere was always headed in the first place.
So we’re really getting two bites from the same apple, Jim. The money we collected from these video premiere’s theatrical releases as well as the money we make when the film finally shows up on store shelves. Pretty slick, huh?”
That’s what I was told back then. But — when “Back to Neverland” was ready to make its retail debut in August of 2002 — the Walt Disney Company was in for a pretty rude awakening. When at its then-2900+ stores around the United States, Walmart did a pretty poor job of promoting this “Peter Pan” sequel.
Why for? Because — during its domestic release earlier in the year — “Back to Neverland” had only grossed $48 million. Which — to Walmart’s way of thinking — didn’t really qualify the “Peter Pan” sequel way for the blockbuster treatment. Which is why this BVHE video premiere got very little shelf space, the DVD wasn’t featured all that prominently in the weekly Walmart flyer and the film didn’t get all that much in-store promotion either.
This decision on Walmart’s part — as you might have guessed — made Disney executives absolutely crazy. Why for? Because — due to the market research that they had already done on the “Peter Pan” sequel — the folks at Buena Vista Home Entertainment knew that “Back to Neverland” was testing better than “The Lion King II: Simba’s Pride.” And given that “Simba’s Pride” — ‘way back in 1998 — had sold more than 12.1 million units, it just stood to reason that BVHE expected to sell even more copies of the “Peter Pan” sequel.
But that wasn’t going to happen if Walmart wasn’t to give “Back to Neverland” the shelf space & the promotion that this picture deserved. And — sure enough — this “Peter Pan” sequel DID wind up being a real disappointment to the Walt Disney Company. This video premiere never even came close to earning what the Mouse’s accountants had predicted the picture (once it came out on DVD & VHS, that is) would eventually earn.
Hoping to avoid this situation in the future, in late 2002 / early 2003, Disney representatives supposedly opened a dialogue with Walmart’s representatives. With the hope that — by making the Mouse’s own market research information available to the retail giant — Mickey might then be able to change Walmart’s thinking regarding the chain’s formula for determining which DVDs got the good shelf space and in-store promotion.
But Walmart reportedly refused to budge on this issue. Which was finally allegedly forced Disney to reconsider its stance on the whole theatrical-release-first-followed-by-a-release-to-stores-three-to-six-months-later issue. The battle plan the company had put in place for BVHE’s more promising video premieres. After all, given that the retail giant WAS responsible for 15-20% of all the Disney DVDs sold in the U.S., the Mouse had to do what it could to insure that its product got the maximum store shelf space as well as in-store promotion that they could.
Which is why — over the past year or so — you’ve actually seen the Walt Disney Company step away from its once-common practice of sending Buena Vista Home Entertainment’s more promising video premieres out to theaters prior to appearing on store shelves. The last BVHE project to actually recieve this sort of treatment was “Teacher’s Pet” back in January. (But that film — which, in spite of some good reviews, only grossed $6.4 million during its entire domestic release — was only sent into theaters reportedly because the Walt Disney Company already has a contractual obligation to do so. Thanks to a pre-existing deal with “Teacher Pet” ‘s creators, Gary Baseman and Bill & Chery Steinkellner.)
Mind you, these doesn’t mean that the Mouse isn’t still trying to get Walmart to reconfigure the formula that the retail chain uses to determine which DVDs get the really good shelf space & in-store promotion. Over the past few months, Disney execs reportedly have been trying to sell Walmart officials on the idea that times have changed. That a film’s box office success no longer is a good indication of how a movie will do once it debuts on DVD.
Case in point: Disney’s own “Brother Bear.” When this traditionally animated feature initially bowed in theaters nationwide in October of 2003, it earned a very respectable $85 million. But — given that this WDFA production missed blockbuster status by $15 million — the film didn’t qualify (in Walmart’s eyes, anyway) for special treatment.
So — back in March of 2004 — the retail giant put this BVHE release out on store shelves without a whole lot of hoopla. Walmart’s initial expectation was that they’d move a fair number of “Brother Bear” DVDs in the first few weeks of April. Then this film would quickly fade from view.
Well, guess what, folks? Here we are — 21 weeks later — and “Brother Bear” is still selling steadily. To date, Buena Vista Home Entertainment has sold nearly 6 million copies of this film’s DVD. Which is certainly a whole lot more copies of this movie than Walmart ever expected to sell.
So what actually caused the steady sale of all those copies of “Brother Bear”? Theories abound. I’ve heard everything from consumers finally wised up (As in: Why should I spend $40 to take my family to the multiplex to see this movie once, when — if I wait three to six months — I can just buy the DVD for $15? Whereupon my kids can watch this new Disney movie over and over and over … ) to the idea that college kids are now embracing “Brother Bear” because they’ve just learned about the crazy commentary track that Rick Moranis & Dave Thomas recorded for this Disney DVD.
Whatever the reason, folks at BVHE & Walmart are genuinely intrigued by what’s been going on with “Brother Bear.” Is the extended sales period for this Disney DVD just a one-time thing or the start of a trend? That’s why all eyes are now on “Home on the Range,” which is due to make its DVD debut next month. On Tuesday, September 14th to be exact.
Should this BVHE release (Which — given that this film only pulled in $50 million during its initial domestic release back in April — “Home” hardly qualifies for Walmart’s blockbuster treatment) pull a “Brother Bear”? As in: Sell a whole lot more DVDs than initially expected, stay on stores shelves for much longer than projections say it should … Well, then maybe the retail giant WILL finally reconsider some of its formulas.
But — for now, anyway — Walmart is sticking to its guns. Which is why the Walt Disney Company is still playing it safe. Not even scheduling BVHE video premieres that are truly impressing people (Like 2006’s “Bambi and the Great Prince.” Which — based on what I’ve been hearing coming out of Disney Toon’s satellite studio in Sydney — is supposed to be simply stunning) for theatrical release.
So there you have it, folks. “The Three Musketeers” wasn’t actually kept out of theaters because that followed Michael Eisner’s agenda. But — rather — because Buena Vista Home Entertainment was trying to stay on Walmart’s good side. With the hope that this would then insure that Disney’s video premieres would then get all the shelf space and in-store promotion that the Mouse gelt that they deserved.
Pretty bizarre story, don’t you think?
Your thoughts?