Michael Nathanson (Nomura Securities) Rating: Buy. Change to FY 2012 EPS: -6 cents to $2.90. “We do not expect the weaker film results to affect any of the business segments (e.g. we did not anticipate strong consumer products revenue related to John Carter)… one-off charges at the Studio segment are not indicative of the overall health of the company’s core businesses – namely the Media Networks and Parks. We view any pullback in the stock around this higher film loss as an enhanced buying opportunity.”
Spencer Wang (Credit Suisse) Rating: Outperform. Change to FY 2012 EPS: -7 cents to $2.91. “Disney shares could come under some modest pressure from this news, although the financial impact is relatively modest in the context of Disney’s overall operations.
Todd Juenger (Bernstein Research). Rating: Outperform. Change to FY 2012 EPS: -6 cents to $2.97. “We have concluded this is a blip investors should ignore….This is a very different kind of a miss than, say, if theme parks generally (or one of the capital projects specifically) was off-track, cable networks were off-track or consumer products was off-track. …
The analysts’ reports created the “takeaway” Ross and Iger were looking for -- that John Carter was a bump in the road or a ding in the side of the Disney car, but nothing more, and in the process the announcement re-set the bar of corporate expectations so that when the quarterly figures did come out in May, there would likely be no “hit” to be absorbed because the hit would have been taken back in March.
Disney dropped less than 1% and quickly recovered.
But from the perspective of John Carter and all those who had an interest in its final outcome, the announcement irrevocably conveyed the idea that the film enterprise was a complete bust; that Disney had completely given up on the film and the franchise; that no word of mouth miracle could now be considered nor was Disney interested in nurturing the longterm legacy of the film a la Blade Runner and 2001, two sci-fi films that got off to rocky starts at the box office and with critics but went on to be regarded as classics. The inevitable takeaway from the announcement was that Disney was washing its hands of John Carter, period. And it was doing this a mere 10 days into its release and before it had been released in the second and third largest foreign markets.
If anyone expected Ross or Disney marketing to take any of the blame, they were wrong, as Ross’s only comment was:317
Moviemaking does not come without risk. It’s still an art, not a science, and there is no proven formula for success. Andrew Stanton is an incredibly talented and successful filmmaker who with his team put their hard work and vision into the making of ‘John Carter.’ Unfortunately, it failed to connect with audiences as much as we had all hoped.
Thus after his team had executed what many observers were calling the worst marketing campaign in history, Ross laid all the blame for the failure on the movie itself, and made no acknowledgment of the studios’ role in marketing it competently.
In the aftermath of the March 19 announcement, conspiracy theories that blamed Disney for deliberately tanking John Carter sprang up and ranged from Richard Hoagland’s outlandish claim on Coast to Coast radio 318that a cabal within Disney had done John Carter in to keep the public from learning about Mars’ ancient civilization and technology, to dozens of theories put forward on blogs and message boards, all concluding the same thing, which is summed up by a post on ReelRanting: “I must conclude that someone high up in Disney had it in for this film or someone behind it and did everything he could to ensure its failure. Someone not only starved it of the oxygen of publicity; he poisoned it with bad publicity. When else has a studio ever come out and said: “Our film is crap. Stay away. John Carter was murdered.”319
Conspiracy theories aside, Barton Crockett, an analyst for Lazard Capital Markets who followed Disney closely on a daily basis, wrote:320
....the projection that the Studio unit will end up with a loss of between $80M and $120M this quarter suggests to us that the balance of the studio performance was worse than we had modeled.
The “balance of the studio performance” refers to the rest of the films released by Disney during the quarter, and thus Crockett’s statement implied that for John Carter’s failure was being exaggerated so that other performance deficiencies of other films could be bundled into the $200M figure and, because of the bundling, would not have to be specified. John Carter was, therefore, providing protective cover for other deficiencies. Coming from an analyst who tracked Disney performance daily and was in regular contact with Disney financial executives, this is a view which carried weight.321
On a psychological and emotional level, Iger in particular was “over” John Carter. It was Dick Cook’s baby and thus an orphan; it had become a stain on the company; he (Iger) had brought in Marvel which gave Disney all the boy franchises it could ever want and now he had Lucasfilm and Star Wars firmly in sight. Making the announcement would clear the air of the stench of John Carter, and team Disney could refocus on what remained -- and what remained included The Avengers. Iger was the author of the Marvel deal; it represented the direction he was taking the studio; ‘Carter was baggage.
But if Disney had let go, the fans had not.
On Facebook, the Back To Barsoom Sequel Group had grown to 6,000 members, and an intense phenomenon of multiple viewings of the film in cinemas was unfolding. As of March 30, two fans -- sisters Daria Brooks and Madeline Gann--had seen the film 10 times in theaters, and there were many who had seen if 5, 6, or 7 times.
The question remained an open one: Were these fans the “pitiful few”? Were they a tiny niche that would never be able to make a difference, or did they represent something larger, and potentially more important, as the curtain on the John Carter theatrical debacle began to close?
It was too soon to tell.
A Tale of Two Trajectories
Case Study: The Hunger Games versus John Carter
Two weeks after John Carter opened, Lionsgate’s The Hunger Games brought in a whopping $155M at the domestic box office in its debut weekend, making it the third highest opening weekend ever, just behind Harry Potter and the Deathly Hallows Part 2 ($168M), and The Dark Knight ($158M). The Hunger Games was clearly every bit the huge hit that analysts and fans had been predicting.
By contrast, battered John Carter, struggling in the aftermath of Disney’s $200M write-down announcement with its newfound status as “biggest flop in cinema history” brought in $5M, bringing its domestic total to $65M after three weekends, and a slightly better global total of $234M.
Worse yet for Disney, The Hunger Games cost $80M to make and $50M to market, while John Carter cost $250M to make and $100M to market.
How did such disparity occur?
The tale of the tape: In one corner was The Hunger Games at $130M total cost (production and marketing) and $214M total BOG after one weekend, and in the other corner John Carter at $350M total cost $234M total BOG after three weekends.
Given the fact that Lionsgate had the easier marketing task due to the large and active current fan base, a case could be made that John Carter was the “Avis” of the situation and must “try harder.” Yet the opposite was true. Lionsgate left nothing to chance and approached the campaign with all the thoroughness and sense of urgency that Disney lacked in its campaign for John Carter.
The writing was on the wall 12 weeks out. At that time, The Hunger Games had almost 1,000,000 Facebook Fans who were burning up the movie message boards with their chatter about the film. John Carter at the equivalent point before its release had approximately 40,000 Facebook fans. The same general percentages held true for Twitter Followers and other social media measures. Did this just happen because The Hunger Games was a current literary phenomenon? Or was there some artfulness involved in the The Hunger Games social media marketing that was lacking in the case of Disney and John Carter?
On January 5, The Hunger Games had an IMDB rank of 26 to 386 for John Carter; it had 60 pages of comments to 13 for John Carter; it led in Facebook “Likes”
878,229 to 62,070, and it had a red-hot positive/negative sentiment ratio of 9.5/.5 to John Carter’s 6.5/3.5.
What was The Hunger Games doing so differently?
The Hunger Games social media and digital marketing was on a completely different level from the social media and digital marketing that Disney put forward with John Carter. With The Hunger Games, there were for example 13 Facebook pages representing each of the districts in the film. It was set up so that fans could become virtual citizens of each district – and because the large novel fan base was familiar with the context – and because of various other “cool factors,” it worked.
There was no equivalent for John Carter even though Barsoom boasted the same kind of opportunity. The problem: Disney would need to educate the potential audience first, in order for audiences to know. And it never made the effort. Plus, Disney never tapped into the existing John Carter fan base who would have been ready and willing to participate in creating and populating different pages, or a “Barsoomapedia” Wiki.
On Twitter, for The Hunger Games Lionsgate created both the official @TheHungerGames account as well as @TheCapitolPN, a Twitter account for The Capitol, the central city in the story.322 The account @TheCapitolPN acted as a “welcoming site to Panem, the Capitol, and its 12 Districts.” It often tweeted stories, warnings and encouragement in character. Lionsgate's efforts in this regard again resonated with fans, and this amplified the buzz. The “cool factor” was clearly there. Between the two Twitter Accounts, The Hunger Games had over 400,000 by opening day.
Meanwhile, the single John Carter Twitter account, @JohnCarter, topped out at an anemic 9,400 followers and three weeks into the release, had managed a total of only largely uninspiring 240 tweets – such as: “Which John Carter character was the most exciting to see on the big screen?”, or “John Carter is now in theaters; are you going?” And not only did the account put out very few tweets (something it can do via automation, meaning no one has to “mind the store” to simply put out tweets), it hardly did any retweeting at all — and retweeting is an essential tool to generate buzz. For the entire 7 day period prior to opening day, John Carter put out 23 tweets, of which 5 were retweets.323
By contrast, the official Twitter account @TheHungerGames with 380,000 followers put out over 40 tweets just on opening day, and over 100 in the final week; while the secondary @theCapitolPN account put out an equivalent number and an unofficial account @Hungergames put out even more. Collectively, the output of The Hunger Games Twitter accounts generated numerous real interactions with fans and a real sense of an event. Disney’s far lower output appear to be a series of tweets that were programmed into a computer in December and just allowed to broadcast at specified times up to the release.
Spam, essentially.
Going through the motions?
As a result — “Hunger Games” mentions on Twitter reached 1 million in the last month while John Carter mentions never reached a tenth of that.
The Facebook comparison is even more striking.324 As with Twitter, the John Carter Facebook page confined itself to putting out occasional (not even daily — less than that) canned “spam” announcements that could have been written months earlier, and probably were. For examples, here are all the updates of the John Carter Facebook page in a 1 week period (16-23 Mar):
“In the film, Edgar Rice Burroughs is the nephew of John Carter. He inherits his uncle’s journal, which details Carter’s journey to a strange, new world.”
“Leave a Thark his head and one hand and he may yet conquer.” -Tars Tarkas”
“The actors playing the nine-foot tall, green Tharks had to learn to walk on stilts to film the scenes with John Carter, giving the correct eye-line for the dialogue.”
“Did I not tell you he could jump?” -Tars Tarkas
“Bring Barsoom home with these John Carter items from the Disney Store.”
It is hard to imagine a more unimaginative and lackluster performance. And it was not any better before the release — it was the same “spam-like” stuff, interchangeable with whatever was being tweeted, all feeling, as one observer put it, “as if it had been written months earlier by a single intern in some Burbank Starbucks.”
The Hunger Games, by contrast managed at least daily updates; had all kind of special offers, free downloaded games that were actually fun, inside activities with plenty of “cool factor.”
The unmistakable “takeaway” for anyone visiting the two Facebook pages was that John Carter Facebook and Twitter effort was a half-hearted endeavor with no serious senior level focus having been placed on it. There was nothing “cool” about it. Meanwhile the The Hunger Games’ Facebook and Twitter effort was hip, run by cool people, and so the takeaway, of course, was that the movie must be cool and worth seeing.
John Carter did perform better than Lionsgate overseas. Why?
One factor was that Disney’s overseas divisions generally did a far better job than the home office.
Examples:
1. The Domestic official John Carter website, buried on the second layer of Disney Go, was probably not even in the top five of official John Carter websites. The UK Site, the Australian Site, the Singaporean Site, and the German site were all better in terms of accessibility, features, and overall impact.
2. The Japanese Trailer was widely considered to be far better than any of the official Disney trailers put out by the US marketing team.
3. Individual country-specific promotions in a variety of countries all had stronger impact and appeal than anything Disney US did.
4. In other words — did the other Disney divisions, far from home and outside the specter of what was g0ing on in Burbank, manage to do a better job?
The disparity was even harder to understand when consideration is given to the fact that MT Carney was brought on board in 2010 to head Disney marketing precisely to strengthen the digital component and achieve a “new paradigm” balance between digital and traditional means of promotion.
Last Trip to Barsoom
It might have been expected that the announcement from Disney of the $200M write-down, coupled with the subliminal (or not so subliminal) message that Disney was done with John Carter would have discouraged the fan on Facebook and elsewhere calling for a John Carter Sequel.
But in fact, the opposite happened.
On Facebook, the group’s membership continued to grow and in fact the growth rate accelerated in the immediate aftermath of the March 19 announcement. 5,000 members became 7,000 even as John Carter was entering the final phase of its theatrical run -- meaning far fewer new audience members were discovering the film each week.
On April 11th one of the members of the Facebook group, Daria Brooks, who had seen the film 14 times in theaters, volunteered on a message board that she was going to go to Disney-owned El Capitan Theater in Hollywood for the final showing there on the night of April 19th.325
The thought occurred: Instead of the curtain coming down on a final showing with a handful of stragglers watching the film, perhaps with social media promotion it could be transformed into a proper sendoff that would show respect for the film, and send a message.
On April 12th, “Last Trip to Barsoom” was announced on The John Carter Files and Facebook.326 The stated goal was to give the film a solid sendoff. Over the next week, fans in cities around the world put together groups to attend the film in solidarity on April 19th.
On Twitter, Andrew Stanton tweeted: “See Carter 1 last time on the big, bold screen today. "Kaor!" to all you wonderful folks attending the El Cap screening tonight! #gobarsoom
Composer Michael Giacchino also tweeted support for the endeavor, and in Los Angeles, Disney star Daryl Sabara who plays the young Edgar Rice Burroughs in the film tweeted that he was going to El Capitan on the 19th. Another cast member, Evelyn Dubuq, came to the screening as well, as did Edgar Rice Burroughs, Inc. President James Sullos and a contingent from ERB, Inc.
In the end the 225 paying customers made it the large
st audience of any night in the theatrical run at El Capitan.
Meanwhile, around the world, fans in groups of 5, 10, or in some cases as many as 50, converged on theaters on the same night. In the US there were groups attending in most major cities and even in some smaller venues such as Oklahoma City, Fargo, Tallahassee, there were groups who went in solidarity.
By the time “Last Trip to Barsoom” was over, it was clear that John Carter indeed had developed an entrenched and passionate fan base that was beginning to view themselves as the “Trekkies” of 2012.
A Breath of Life in Second Run Theaters
In the weeks after the first run ended, John Carter enjoyed success in second run theaters that had eluded it during its first run. Back-to-Barsoomer Daria Brooks made a project of seeing the film multiple times in various second run theaters and wrote:327
. . . .these second-run cinema audiences were the polar opposite of what we saw in Hollywood and several other first-run houses. At each screening we attended, the audiences grew in size from little better than half-filled 150 seat rooms to a surprising “I’m not sure there are any seats left,” the warning we received upon arriving a few moments late for a 285 seat 3D screening at the Picture Show At Main Place in Santa Ana. These audiences, who added more than $4.2 million to Disney’s coffers, could not have been more receptive: They laughed heartily during humorous scenes, cheered loudly for the heroes and audibly balked at Tardos Mors’ outburst at his daughter’s refusal of Sab Than’s proposal. Women openly sighed during John Carter’s proposal to his beloved princess, wept at the dramatic final scene of the film, and everyone from the smallest child to the eldest grandfather clapped for Woola, their new favorite fantasy pet. Most affirming of all, during the additional twenty-five shows attended between April 19 and the film’s final screening on June 28, we witnessed enthusiastic ovations at the end of nearly every show.
John Carter and the Gods of Hollywood Page 30