To begin with, big tent-pole pictures are in trouble if they don't score over $100 million in their debut spots. It's simply the way it is. Beyond that, you have to check out what the first Shrek made back in 2001 during its opening: that flick captured $42.3 million. You mean to tell me the fourth in the series couldn't make at least double what the original did? If it had to bomb, it could have bombed a little less severely, don't you think?
Shrek just couldn't keep up with its predecessors. And I have to say, I don't believe you can necessarily blame the animation studio. I haven't seen any Shrek cartoon, but quite honestly, it seemed that the one just released was of a similar quality to the rest of them. I thought people would flock to it and turn it into a blockbuster.
I was wrong about the fan reaction. I've also been wrong, more specifically, on the Shrek trade itself. I discussed this over the weekend.
I also mentioned how I've been wrong on Disney (DIS), and this brings up a related subject: Does the Shrek debacle reflect poorly on the prospects for Toy Story 3?
Personally, I expect great things from Toy Story 3. The second film in that franchise opened with over $57 million in its first weekend in wide release (Toy Story 2 might have opened with a higher amount if not for the release pattern). Given the assumed large quantity of demand for this content -- since the first sequel was released all the way back in 1999 -- I would say Toy Story 3 needs to do well over $120 million to be considered successful. Where did I get that number? It's what the third Shrek roughly made during its pilot weekend. Such an opening would be unusual for Pixar, as this chart illustrates; we have to remember, though, what kind of brand equity we're dealing with. Like it or not, the Mouse has high expectations to live up to.
Shrek Forever After serves as a practical reminder of a valuable truism in the movie business: You never know what's going to be a huge hit or a tremendous disappointment. In fairness to Katzenberg, he couldn't have predicted exactly when the market was ready to move on from the beloved green creature. He was simply carrying out his fiduciary duty to shareholders by mining the famous fairy-tale universe one last time.
I don't know how Shrek will do in the coming weeks; maybe international exhibition will save the day, but this just isn't a good start. I don't know how DWA will trade Monday, but, up or down, I would be cautious about buying DreamWorks Animation at this point.
Disclosure: I own Disney; positions can change without notice.