Walt Disney's (DIS - Get Report) live action remake of "The Lion King" just became the highest grossing animated film of all-time at the box office. "The Lion King" got out to a fast start, breaking a handful of records in its opening weekend. The film was the highest grossing opening of all-time in July, taking the crown from "Harry Potter and the Deathly Hallows: Part 2," which was released in 2011. It set records for opening weekend animated sales. It was the highest grossing live-action re-make of a Disney animated classic. In short, the film shot out of the blocks and has yet to disappoint.
Overcoming Lackluster Reviews
Although the film has received fairly lackluster reviews by critics (the film's Rotten Tomatoes consensus rating by film critics is only 52%) audiences appear to be enamored with the nostalgic story-line and characters from the Disney renaissance period of the mid-1990s. The film's audience score is 88%. Needless to say, the flick may not be an award winner, but it's a fan favorite and an absolute cash cow for Disney Studios.
When the animated film was originally released in 1994, it was a hit. The animated film's total lifetime gross at the global box office is $968 million. Since then, Disney has sold tens of millions of "The Lion King" VHS tapes and DVDs. But that's just the beginning of this content's cash generation story.
The live action edition is actually the third release of "The Ling King." In September 2011, Disney re-released the original animated version in 3-D. "The Lion King" 3D has produced a lifetime gross of $514 million at the global box office and generated millions more unit sales of both VHS tapes and DVDs.
And now in the present day the live-action re-make of "The Lion King" remains a must-see attraction and has grossed more than $1.33 billion in global sales. This total means that Jon Favreau's version of the film has surpassed "Frozen's" $1.26 billion record in the animated genre (yes, technical photorealistic digital animation is still considered to be animation, though it's a far cry from the hand-drawn methods of old). It's clear that fans have not yet had their fill of Simba and friends.
Re-Inventing Classic Tales
Disney began launching live-action remakes of its animated films with "Maleficent" in 2014, starring Angelina Jolie, and "Cinderella" in 2015, staring Lily James. Both of these films did well at the global box office, generating $758 million and $540 million, respectively. These releases served as a proof of concept that there is still demand for these classic stories. Since then, Disney has remade a variety of fan favorites, such as "The Jungle Book," "Beauty and the Beast," "Dumbo," "Aladdin," and of course, "The Lion King."
For the most part, these films have been big winners at the box office. In 2017, "Beauty and the Beast," starring Emma Watson, broke the $1 billion box office threshold. In 2019, both "Aladdin" and "The Lion King" have done so as well. These films give Disney another blockbuster avenue to take in theaters outside of the "Star Wars" and superhero genres. And they give the company license to cast some of the world's largest cultural icons in fan favorite roles which generates more love from fans. "The Lion King's" cast alone boasts names such as Donald Glover, Beyoncé Knowles-Carter, Seth Rogan, Keagan Michael Key, John Oliver, Eric Andre, and of course, the timeless James Earl Jones.
These live-action remakes serve as a cultural crossroads of the fanfare of several generations. It's no wonder they are so successful. And it's not just about the gross at the box office, but also the fact that Disney is introducing its content to a new generation of fans. Box office success creates demand up and down Disney's diverse revenue stream from theme park ticket sales to general merchandising; this is how an ecosystem thrives.
It's amazing that Disney is able to generate such significant cash flows by recycling intellectual property that is 25 years old. Disney's best-in-class content library and its unique ability to monetize it throughout its ecosystem is why the company carries a much higher valuation than many of its peers in the media space.
A Well-Deserved Premium
Disney currently trades for nearly 23 times trailing 12-months earnings while Comcast (CMCSA - Get Report) , probably its closest competitor in terms of business model and market share, trades for 14.8 times. Traditional media pure plays such as Discovery (DISCA - Get Report) and Viacom (VIAB - Get Report) both trade with single-digit multiples attached to their shares. In short, the market has awarded Disney a large premium, though I believe that the company's steady performance justifies it.
The best brands in the world are built upon accountability. The quality of the storytelling and production of Disney movies serves as the glue that locks consumers into its ecosystem long-term. I'm certainly not a child anymore, yet I still get a warm, tingly feeling when I hear that iconic Disney music and see the classic castle at the opening credits of its films. When boiled down to its purest elements, what Disney sells is happiness.
So long as Disney can continue to deliver the good vibes that so many across the globe have come to expect, whether its by re-inventing existing content or developing new and original stories to tell, I suspect that it won't just be moviegoers, but also Disney shareholders whose hearts are filled with joy.