This article was updated on Feb. 19, 2002.
HOLLYWOOD — Disney is quietly preparing “The Jungle Book II” and “Piglet’s Big Movie” for theatrical release next year, but you won’t find them on the production schedule at Walt Disney Pictures.
Like last weekend’s third biggest theatrical release, “Return to Never Land,” they are being produced by Walt Disney Television Animation, the most prolific and one of the most profitable production units at the Mouse House in recent years.
Some insiders at Disney believe that “Return to Never Land” could wind up as the studio’s most profitable theatrical release this year. The studio’s cut of the estimated four-day opening weekend gross of $16.1 million has already covered most of the production budget.
With roughly 1,000 employees in studios in L.A., Sydney and Tokyo, the division has more than a dozen animated movie projects for theatrical and video release in various stages of development. Since almost all of them are sequels or spinoffs of animated movies and characters created by the studio’s film division, Disney TV has built-in luxuries relative to production time and economies of scale over the film unit which must create and market new characters and stories from scratch.
“That’s part of the economics, it’s all part of the business,” says Thomas Schumacher, president of the overarching Walt Disney Animation.
Projects in production at Disney TV range from adaptations of classic library titles like “Dumbo II” and “101 Dalmatians the Animated Sequel” to recent blockbusters like “Tarzan II” and “The Lion King III,” as well as “Mulan II” and “Mulan III.”
And that doesn’t count the animated series produced for broadcast, cable, syndicated and international markets, including a TV series to be followed by a video premiere movie sequel in 2004 based on Disney’s upcoming summer animated theatrical feature “Lilo and Stitch.” (Schumacher says that creating sequel movies and TV series in conjunction with a new movie sends an important message to merchandisers, licensees and retailers that Disney will be extending the franchise.)
Tiny budgets, big profits
With relatively tiny budgets, the TV animation movies are solid profit centers for Disney, whether they get a theatrical or video premiere. For instance, while sources estimate a budget range from about $8 million-$15 million for each Disney TV production that takes about 2½ years, “The Tigger Movie” generated $46 million in domestic box office receipts and nearly double that worldwide before it even went to video.
By comparison, Disney’s full-scale animated films take twice as long to produce and have budgets of $75 million-$100 million or more since characters and background designs are created from scratch. The last two releases, “The Emperor’s New Groove” and “Atlantis: The Lost Empire,” have generated less than $90 million each at U.S. theaters.
The profitability picture when a Disney TV movie premieres on video is often even greater. Disney’s last two video premieres, “Lady and the Tramp II: Scamp’s Adventure” and “The Little Mermaid II: Return to the Sea,” have generated about $150 million each in domestic consumer spending, according to Daily Variety sister publication Video Business. That is comparable to, or sometimes more than, video revenue for Disney’s theatrical features that cost from five to 10 times as much to produce.
In fact, Disney execs grapple with each decision about potentially damaging video sales if a movie goes theatrical first and isn’t received well.
Video preem upside
The potential upside for a video premiere is just as high as a theatrical release. Consumers spent about $300 million on the video of “The Lion King II,” more than the box office receipts from any animated theatrical release in history except one, the $313 million of the original “The Lion King” in 1994.
Headed by president David Stainton and exec VP Sharon Morrill, Disney TV usually doesn’t know as it starts development and even begins production on a movie whether it will wind up in theaters or as a video premiere. After originally being penciled in as a theatrical project, “Return to Never Land,” animated at the Australian studio, was switched to the video schedule before being slotted back in the theatrical sked. As was the case with “Toy Story 2” from Pixar in 1999, “The Tigger Movie” was put into production as a video premiere before the studio decided to take it out theatrically on President’s Day weekend in 2000.
” ‘The Tigger Movie’ was kind of an experiment to see what would happen,” Stainton said. “We found out some things that have really surprised us. It was a tremendous success with our core audience. It turns out that 4-year-olds to 8-year-olds and their moms and dads are out there, alive and dying for our stuff.”
And after a generation of in-your-face kids programming, kids and parents seem to be embracing a return to adaptations of simple fairy tales and legends, which is just what Stainton plans to provide. “I don’t want to try to age it up or make it edgy or hip.”
After an even bigger $13.5 million opening on President’s weekend the second time out last year with Disney TV’s “Recess: School’s Out,” the division decided to test the market for sequels to Disney classics from as far back as the 1950s. “Lady and the Tramp II: Scamp’s Adventure” was the fifth best-selling videocassette last year, according to Video Business. That opened the floodgates for Disney TV to produce follow-ups to both classic and recent releases.
“We were so overwhelmed by the response (to ‘Lady and the Tramp II’) that we realized our business is not just about extending the life of new movies but also about sustaining properties that were created that long ago,” says Stainton, formerly of the film division. “We are the stewards.”
Word just came down last week that “The Jungle Book II,” which is already deep into production, will be going theatrical in 2003, largely because of the international appeal of the original. It will be next year’s President’s Day weekend movie, with “Piglet’s Big Movie” pushed back to a released during the Easter/spring break period.
Meanwhile, Disney TV’s “Cinderella II: Dreams Come True” and “The Hunchback of Notre Dame II” are premiering on video Feb. 26 and March 19, respectively.
Expect one or two theatrical releases per year from now on from Disney TV as part of Disney’s planned annual release slate of four to five animated movies to theaters each year, including an IMAX adaptation each January to go along with the big-budget tentpoles in the summer and fall. On top of that, Disney TV is ramping up to release three or four additional movies for video each year.
Decisions about which distribution route to take have more to do with marketing strategies and holes that need to be filled in distribution release schedules.
Disney TV will tell you that all the movies from their group are produced with the same level of quality regardless of their final destination. “The Lion King II: Simba’s Pride,” which shared original music with the Tony Award-winning Broadway show in 1998, became the first movie inducted into the Video Premiere Awards’ Academy of Artistic Achievement. The third installment will feature an unused song written for the first movie by Elton John and Tim Rice called “Warthog Rhapsody.”
Carly Simon is writing and singing six original songs for “Piglet’s Big Movie.”
Because of the quality of the movies and the top-level talent involved, Schumacher says the division’s TV Animation label is “such as misnomer.”
Morrill says that Schumacher and Stainton “have allowed us to take it to the next step in terms of resources and talent that they can provide for us that we didn’t have before.
“We can raise the bar now and send people to overseas studios for technical training and mentoring,” she said.
High-profile celebrity voice talent is also comparable regardless of the venue. Robin Williams returned as the voice of Genie for the 1996 video premiere “Aladdin and the King of Thieves,” and Tim Allen and much of the “Toy Story” voice cast did the same in 2000 for the video movie “Buzz Lightyear of Space Command: The Adventure Begins.” Kevin Kline and Demi Moore have returned for “Hunchback II” along with new voice talent Haley Joel Osment and Jennifer Love Hewitt, the latter of whom co-wrote and performs a ballad for the movie. Osment is also voicing the man-cub Mowgli alongside John Goodman who reprises “The Bare Necessities” as Baloo in “Jungle Book II” for theaters in 2003.
Budget increases to push a movie to theatrical are minimal since the biggest expenses are associated with the development and art design phases.
“There are certain things you have to do for theatrical releases involving sound, post-production, and paying a little more attention to animation so it holds up on the big screen,” Morrill said. “But otherwise our storytelling we try to do the same.”
Even marketing costs are comparable, with “Return to Never Land” getting more TV advertising but “Cinderella II” getting more outdoor advertising. The sequel projects require less promotion than original film projects since audiences are already familiar with the characters and stories.
Whether they go theatrical or premiere on video, the execs at Disney TV can claim something unheard of in Hollywood: “We’ve never not made a profit on one of our video or theatrical releases,” Morrill said.