Behind the scenes, Disney executives are flexing their muscles that Black Panther 2 may make a profit.
The following article is part of an ongoing series of releases, largely unredacted, from a group of insiders in the merchandising industries. While we keep the identities of these sources confidential, we have verified and corroborated their information. Anonymity is important to protect their decades of experience and high-level careers.
Some bits & pieces regarding Wakanda Forever from somebody who runs a licensed product line within the broad “novelties” segment – I won’t give you the segment, but Minions merch are huge in it – think lower cost products x volume with very wide distribution. We did some work for them last year and we’ve been discussing new mandates. Anyway:
1) The Wakanda Forever global “attributed” marketing budget is “well over” 200 million USD. Disney licensing said so to my contact. Could be some salesmanship in there on their end, but still, that’s a big amount.
Notice the word “attributed” in the sentence. This refers to the fact that certain key media buys are “bulk” or a pot, and sometimes can cover up to 24 months with the visibility allocation per project/brand up to Disney. You’re an old school TV guy I think so here’s the example: say you are a restaurant holding and buy a large quantity of GRP’s at a local (conventional) TV channel for 100 million worth to cover the east coast for the year, where you have say three different restaurant chains to promote. Let’s further say that two chains/brands will get big pushes, with the remain chained only planned for a visibility maintenance share. When all is said and done with respect to the allocation of this fictional media buy, restaurant chain A may have gotten half the investment/visibility (in this example $50 mil worth), chain B $40 mil and finally the third chain $10 mil or 10% of the investment. And you can adjust between your three brands (in this example) on the fly, as long as you’ve got pre-paid GRPs left on your tab.
No matter the medium and how they measure and sell their visibility (GRP’s, “clicks” and all related sub-measures, impressions, etc.) a larger company will usually negotiate and buy a pot of exposure including some key timing lock-ins (Christmas, Thanksgiving, maybe Valentines Day & Mother’s Day, etc.) to cover their full year needs. Then they will internally allocate among the brands/projects they need to promote, taking calendar into account, but always keeping some non-allocated flex in hand in order to chase some opportunities. Allocation shifts between projects can also come up, but oh boy that usually doesn’t go over too well internally. In this case, what I’m told is that brand visibility investment was shifted to Wakanda from the Disney animated thing coming out real soon and something else so timing obligations are respected.
Over $200 mil is a very very strong marketing spend. I should mention here that the terminology should really be “Media & Promos” with “promos” being a grab bag of activities that aren’t straight up media buys but that do result in visibility/consumer exposure directly attributable to a project/brand.
One thing for example that is included under “promos” are special screenings and tickets bought in bulk and distributed for giveaway/promo (PR usually has its own budget, but accounting practices do allow for some play between Media, Promo and PR). As a matter of fact from what I understand when a movie project fails and is a money loser it can then be advantageous to “stuff it” as much as possible to maximize the book loss on that one project while maximizing, say, the allocation of tax credits on those projects that ARE profitable in order to maximize total in-pocket dollars over multiple projects at the end of the fiscal once books close. There is nothing wrong with that – that’s how those floors of people (accounting/finance) can make the difference between profit & loss (or loss & profit) at the end of the year – but it does make it tougher for those of us in the cheap seats to follow the money, like you like to do.
Also, please don’t think that when I refer to special screenings and giveaway/promo tickets that I am referring to any “ticket stuffing” conspiracy here. This is a normal part of the mix.
2) Same source said that Disney are quite happy with how Wakanda is doing, but not for the reasons you’d think.
They feel that depending on how this Holiday week goes that they’ve got more than a run at $900 mil global, and they can bump-spend on media (ie “allocate” more marketing to it) in order to make it if they’re close (sorry Strange Worlds). Some over there even think that if the hold this week is truly extraordinary with International obliging, that maybe the billion might still be in-play. Why they think that current Wakanda is a win on the movie side (not talking merchandising here – that’s a tanker) is that the person my contact liaises with at Disney said on the qt, and I’m paraphrasing here, that not only has Lightyear-esque embarrassment been avoided but “the movie is doing great when you consider what IS NOT there: no real male representation, no Caucasians, and no real headline characters – even Black Panther is not in his own movie. All black female characters, including our new character intro.”
What she was saying was that they feel that “the Marvel experience as presented by Wakanda” (yep, that’s how they talk) at $850 to $900 mil + means the Marvel brand is still very strong and that they are very confident that $1.4 to $2 billion Marvel movies are still very attainable for a given movie “when we pull out the big guns – if it has the proper build and relevant characters – including strategic portrayals by Caucasian males, maybe even Caucasian romance”
Something that always comes up in Licensee/Licensor is the need for “another Spiderman” – referring to the Sony film (which, yes, included “Caucasian males”). Yes, brass tacks conversations often have this checkboxy language. This is my opinion, but what soaks through these past 2 years is an attitude that if all else fails and push has come to shove, they are not worried because “we can always put the white men back in”. Yes that’s a quote. If things are still doing ok, and it seems that they feel they are with no damage done, then marquis-characters along with attached “white men” (checkboxy, checkboxy) can still largely be kept in the drawer only to be used as strategic bait. If the boat starts to truly sink they are the liferafts, of the plane is really going down (and not just experiencing turbulence) then they are the parachutes. Chose your analogy.
None of this reassures those making merch, because while it’s related to box office, it’s really related to the number of people actually being exposed to the media/film (or a TV show, whatever), not the dollars generated by the movie. Much rather have 100 people paying a $1 than 25 paying $4. Visibility is then crossed with engagement, crossed with the IP defining elements that trigger purchases across various categories (think Kamala Harris and her Venn diags). We’ve talked about these and other factors in the past. Anyway, Wakanda is not working out on the merch side.
Yep, no cause at all to worry think Marvel, as they whistle while walking by the graveyard of dead/damaged brands.
We’ll see…
So what do you think? Did this explain the business side of movies and merchandise? Let us know in the comments below. As always, keep reading That Park Place for all the news that should be fun!
