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Remember, Movie Making Isn't the Point as Disney's 'Frozen' Opens Thanksgiving Weekend

Stocks in this article: DISLGFRENT

NEW YORK (TheStreet) -- Disney (DIS) is banking on Frozen, the 3-D animated musical based on Hans Christian Andersen's The Snow Queen, to do well enough at the box-office over the Thanksgiving weekend to energize toy and product sales as well as rides at its various domestic and international theme parks.

For the long weekend, that officially begins today, Frozen is expected to bring-in $38 million in movie-ticket sales, according to BoxOffice.com. For its complete North American run, BoxOffice.com's Phil Contrino projects the Disney animation to generate $170,000, just a pinch higher than The Hunger Games: Catching Fire drew last weekend as the Lions Gate Entertainment  (LGF) blockbuster set a November record with $161.1 million in box-office sales, according to Rentrak (RENT).



But for Disney, movies have long ceased to be the growth engine or even the profit center of the world's largest entertainment company. Studio revenue accounted for $1.5 billion in sales for Disney in its recently-completed quarter or 13% of total revenue of $11.6 billion.

Movies are still a nice business but their real charm comes from potential toy and product sales as well as fun-filled theme parks rides. Disney's parks and resorts generated operating income of $571 million, a formidable increase of 15% compared to the same period a year ago. 

"To the extent that the movie business can create businesses that can drive other businesses, like consumer products and the parks, that has more meaning over the longterm," said Doug Creutz, media industry analyst at Cowen & Co., said in a phone interview from San Francisco.

Disney, Creutz said, has shrunk its movie slate down to Marvel, Disney Pixar Animation and Star Wars. "They have gotten it about as small as they can get."

Monsters University and Wreck-It Ralph carried Disney's studios in 2013 where the Lone Ranger failed, and Marvel's Captain America: The Winter Soldier is due in theaters April 4, nicely timed for a new quarter and spring breaks. Captain is expected to draw $200 million in box-office sales for its North American run, Contrino forecasts. Movies are what Disney is known for but growing profits isn't about making movies.

"You want your films to do well so that you can sell a variety of products," Creutz said. "Yet a movie like Planes wasn't a very good film but it created a whole bunch of Cars type figures to sell at retail."

One exception to Disney's typical slate is Maleficent, a film due in May that Contrino says is targeted at the same audiences that turned Oz: The Great and Powerful into a $235 million domestic hit. Into the summer, Disney has Guardians of the Galaxy. No real blockbusters, but mostly the use of solid, safe characters that do well in toy stores and theme parks.

Disney shares were slipping 0.5% in mid-day trading to $70.81, trimming it 2013 advance to 42%. 

--By Leon Lazaroff in New York


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