Draw and Fire : Disney Flexes Financial Muscle to Protect Its Animation Turf

Addressing News Corp.’s annual shareholders meeting in Australia this week, Chief Operating Officer Peter Chernin noted that Disney was “determined to do anything they can to stop the success of ‘Anastasia,’ ” the first home-grown animated feature from News Corp.’s 20th Century Fox movie studio.

Chernin couldn’t be more right.

“Anastasia,” a $53-million musical adventure due out Nov. 21, has to contend with Disney’s animated reissue of its popular 1989 hit “The Little Mermaid” to its left a week earlier, a $75-million live-action “Flubber,” starring Robin Williams, to its right five days later, and a double-bill release of “George of the Jungle” and “Hercules” at discount theaters on top of it opening day.

None of this heavy artillery comes as any surprise to anyone at Fox. Or to anyone in the movie business who knows Disney.

This is not a studio that takes anything lightly, despite how much executives there may want to downplay their effort to obliterate the competition.

Three years ago at Thanksgiving, Disney re-released its animated blockbuster “The Lion King” (just two months after its initial run) to blow animated movies like New Line Cinema’s “The Swan Princess” and Fox’s animated pickup “The Pagemaster” out of the water. It worked.

Last year, Disney torpedoed MGM/UA’s animated sequel “All Dogs Go to Heaven 2” with its reissue of “Oliver & Company.”

Who knows what Disney executives are scheming to do in Thanksgiving 1998 when DreamWorks SKG, co-founded by Michael Eisner’s archrival Jeffrey Katzenberg, bows its maiden animated feature “The Prince of Egypt.” (As if releasing “A Bug’s Life,” Pixar Animation Studios’ follow-up to its 1995 mega-hit “Toy Story” won’t make enough noise.)

“We will fight like we always do to maximize our gross--that’s what we do,” says Disney’s distribution president, Phil Barlow. Barlow wants his friends at Fox to know, “Hey, guys, you shouldn’t be surprised we’re going to try and out-gross you. You want to play with the big boys? Welcome to the club!”

Barlow notes that Disney isn’t doing anything any other studio wouldn’t do in trying to maximize the value of its own movies. Nor is Disney doing anything different than it has ever done over the years in using its unrivaled marketing, distribution and financial muscle to protect its most valuable asset: its family brand name--the only one in the movie business.

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What’s changed is that Disney is now faced with competitors like Fox, Warner Bros. and the fledgling DreamWorks SKG, who are making significant financial commitments to be in the animation business, treading boldly where no other studio has dared in six decades--on Disney’s animation turf. You can bet Disney’s not indifferent about it.

While Disney has dominated the genre since the 1930s, that doesn’t mean the marketplace for animation--or any genre for that matter, be it action, horror, whatever--isn’t big enough to make room for more movies, provided those are movies audiences want to see.

“We look at this like how do we expand the marketplace, not steal from it,” says Fox’s marketing president, Bob Harper.

Tom Sherak, Fox’s domestic film group chairman, insists that Hollywood is fabricating some imaginary war between his studio and Disney.

“This is not about us versus them. They’re doing what they’re doing, and we’re just releasing a movie.” At the same time, Sherak does acknowledge, “Everybody’s protective of their children, and these films are our children.”

Similarly, Disney Studios Chairman Joe Roth says, “There’s no pride of ownership here. The audience will go to whatever they want to see. There’s plenty of opportunity, and one movie never destroys or stops another.”

Yet the executives are somewhat disingenuous in suggesting there’s no turf war going on here.

You can bet that executives at both studios are apoplectic about the other’s presence in the family film arena in that their respective movies go after the same exact demographic.

Three months ago, Disney’s ABC TV network informed Fox that it would not broadcast ads for “Anastasia” or any other animated movie in its “Wonderful World of Disney” 7 p.m. Sunday time slot so as to avoid brand confusion.

As it is, consumers have already walked into Disney’s retail stores asking for “Anastasia” product. The movie, loosely based on the legend of the sole surviving member of Russia’s last royal family, features a musical soundtrack, voices of famous personalities (including Meg Ryan as the title character) and an advertising campaign, all of which make it Disney-like.

Fox clearly thinks it has a winner (even the buzz out of Disney is that the film is good) and, therefore, was willing to risk throwing the movie directly into Disney’s path. In plunking “Anastasia” smack in the middle of the competitive Thanksgiving holiday period, Fox is toying with a release window that Disney has often dominated over the years with such family hits as “101 Dalmatians,” “Beauty and the Beast,” “Aladdin” and “Toy Story.”

Others, including Fox, have succeeded there too. In fact, when Roth was the movie chairman at Fox, he booked the 1990 comedy hit “Home Alone” and its 1992 sequel (against Disney’s “Aladdin”), and “Mrs. Doubtfire” the following year into the November holiday slot to great results.

While some Hollywood observers are quick to characterize the Disney-Fox rivalry as a war between its animated movies, it’s the live-action “Flubber” that poses a potentially far greater threat to “Anastasia.” Unlike “Mermaid,” an 8-year-old film that’s already been seen in movie theaters, on TV and on video, “Flubber”--though a remake of Disney’s 1961 Jerry Lewis comedy “The Absent Minded Professor”--is a brand-new potential franchise headlined by one of Hollywood’s most popular comedy stars.

This is not lost on Fox.

“I’m more worried about ‘Flubber’ ” admits Sherak. “Its a fresh idea coming to the marketplace.”

There’s plenty of reason for concern. In November 1994, Fox’s holiday remake “Miracle on 34th Street” was creamed by Disney’s family comedy “The Santa Clause,” with respective openings of $2.7 million and $19.3 million and ultimate grosses of $17 million versus $145 million.

Disney knows the re-release of “Little Mermaid,” which will have a limited 17-day-run (from Nov. 14 to 30), can bring in only so many millions. Its most successful reissues are the animated “101 Dalmatians,” which grossed $60 million in 1991; “Snow White,” which brought in $46.6 million in 1987; and “Jungle Book,” which collected $44.6 million in 1990. The studio has long planned the re-release of “Mermaid,” as it does each of its classics every seven or eight years. The November release is timed to coincide with a consumer products push leading into Christmas and the film’s upcoming home video release in March.

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The “Mermaid” marketing campaign, while substantial, doesn’t come close to what Disney and Fox each have planned for “Anastasia” and “Flubber.”

Fox officials have been quoted as saying Fox will spend “35% more” on “Anastasia” than it did on its 1996 blockbuster “Independence Day.”

That makes sense since Fox has to reach a wider audience demographic--not only kids but their parents--and is selling more than a movie. It’s selling a message to the world that it plans to be in the animation game in a big way. The studio invested more than $100 million to build a 60,000-square-foot animation facility in Phoenix.

Sources say Fox will spend around $35 million to open “Anastasia,” a figure that could easily mushroom to $50 million--$60 million if the movie hits big. Disney, it’s said, spent that extravagantly on its most recent animated movie, “Hercules,” and is also spending $35 million to $40 million to open “Flubber.”

Besides what Fox is spending on “Anastasia,” the film’s biggest advertising partner, Burger King, will shoulder about $25 million in media costs, according to a Fox executive.

“Flubber’s” major partners, McDonald’s, Cheerios and Dr Pepper, are shelling out a combined media spend in excess of $30 million, a Disney source confirmed. (McDonald’s is also pumping $20-million worth of media dollars into “Little Mermaid.”)

Disney and Fox will hit consumers in the face with major TV advertising blitz, a huge outdoor campaign (billboards, bus sides and bus shelters) and merchandise galore. Each studio is planning major premieres for the respective movies. On Nov. 9, Fox will take over the Opera House in New York’s Lincoln Square and convert it into a movie theater for thousands of invited guests. A week later, Disney will throw a thematic premiere for “Flubber” in Manhattan.

Disney has only itself to blame for others wanting to duplicate its success. Both Fox’s movie chairman, Bill Mechanic, and DreamWorks’ Katzenberg spent enough years at Disney to know the blueprint for making, selling and distributing animated blockbusters.

As Disney and Fox executives all agree, it’s now up to the consumer to decide whether what they’ve produced will be successes in their own right.

‘Anastasia’ and Her Rivals

Fox’s animated feature “Anastasia,” due out Nov. 21, will be sandwiched between some tough competition. Disney is reissuing “The Little Mermaid” a week before the debut and releasing “Flubber,” starring Robin Williams, a week afterward. Starting on debut day, Disney will offer “George of the Jungle” and “Hercules” as a double bill at 400 discount theaters.

Fox’s Threat, Nov. 21: “Anastasia”

Disney’s Challenge, Nov. 14: “The Little Mermaid”

“George of the Jungle”

“Hercules”

Disney’s Challenge, Nov. 26: “Flubber”