The entertainment ecosystem and historical distribution paradigms continue to evolve in the new world of streaming, where the advent of generative AI tools also hold potential to disrupt content creation and has raised concerns related to intellectual property. Disney, however, just proved that it can still develop new globally popular content IP and rock a billion-dollar box office.
Over the weekend, the Walt Disney Animation Studios sequel Zootopia 2 generated $26.3 million in North American movie-ticket sales, according to Box Office Mojo, and another $131.1 million internationally, pushing its total global theatrical revenue to $1.136 billion after just 17 days of release. That’s the fastest drive to $1 billion at the box office ever for a PG-rated film and for all animated Hollywood releases, according to The Hollywood Reporter.
Only two U.S. films have surpassed the $1 billion threshold at the box office this year, the other being Disney’s live-action iteration of Lilo & Stitch. The Zootopia 2 release also marks another billion-dollar animated film from Walt Disney Animation Studios specifically, following 2024’s successful release of Moana 2.
Disney’s recent theatrical success belies several negative box-office trends.
For one, the domestic box office still hasn’t produced yearly revenue on par with the $11.37 billion generated in 2019, the last full year before the pandemic — which changed movie-watching habits. According to Box Office Mojo, U.S. movie ticket sales are tracking to come in at around $8.5 billion this year, flat with 2014.
Then there’s Netflix, traditionally an evangelist for releasing movies in the home, looking to close a nearly $83 billion acquisition of Warner Bros. Discovery’s studios and streaming businesses.
Netflix Co-CEO Ted Sarandos has publicly insisted that WBD movies will run their courses in theaters, as planned, but there remains speculation in Hollywood that Netflix won’t stick to this distribution strategy pledge long-term.
As it successfully re-pairs Zootopia’s outgoing animated rabbit, Judy Hopps (voiced by Ginnifer Goodwin) with the sly fox Nick Wilde (Jason Bateman), Disney is also strategically approaching a generative AI realm that simultaneously has the potential to boost and threaten its timeless IP.
Over the weekend YouTube took down “dozens” of user-made, AI-generated videos using unauthorized characters from Disney IP, including Star Wars, The Simpsons, Moana and many other Disney-owned properties, after the media company sent a cease-and-desist letter to Google last week accusing it of infringing on copyrights.
Also last week, Disney announced a three-year licensing partnership with OpenAI, in which it will back Sam Altman’s genAI company to the tune of a $1 billion equity investment, and also allow authorized use of around 200 Disney characters for users of OpenAI’s Sora GenAI platform to create short-form social videos.
Discussing the arrangement last week on CNBC’s Squawkbox alongside Altman, Disney CEO Robert Iger said the deal allows Disney to feel “safe” while jumping into the fast-growing world of AI, emboldened with the knowledge that OpenAI will implement “guardrails” around the IP with Disney now a partner.