Shop Talk: The Avengers/The Dark Knight Rises
By David Mumpower
May 30, 2012

I believe a kid tornado just hit.

Day 26 of The Avengers finds the movie in a position that still sounds strange. It is only the second most popular movie in North America. For the fifth consecutive day, Men in Black 3 has bested its more storied competitor. While the percentage gap between the two titles is shrinking, the reality is that Men in Black 3 earned $5.65 million yesterday, over $2 million better than The Avengers managed at $3.27 million. In short, The Avengers will not be finishing in first place any time before Friday. And with Snow White and the Huntsman tracking better than expected, it is safe to say that The Avengers has finished its run as the top choice at the domestic box office. This is a great opportunity to reflect on what has transpired as well as update our previous conversations and address the elephant in the living room, the one in the Batsuit.

Quickly, let’s re-examine The Avengers. In last week’s conversation, I mentioned a pair of delimiters for determining the performance of the movie over the Memorial Day holiday period. The numbers I used were $46 million for the Friday-to-Monday period and a running total of $520 million after 25 days in release. Yet again, The Avengers exceeded expectations.

A weekend total of $36.7 million followed by a Memorial Day take of $10.5 million combined for a four-day tally of $47.2 million, 2.6% better than expected. As such, its 25-day total was $523.9 million, $3.9 million above the range modeling indicated was needed to attain $600 million before it finishes its run. As such, The Avengers looks to surpass Titanic to become the second best domestic performer of all time during its initial run. Titanic’s overall take of $658.6 million is out of reach (barring something unforeseen), but that is a splitting of hairs when the revenue totals are this significant.

In addition, Titanic was a one and done franchise that offered few opportunities for ancillary revenue. With regards to The Avengers, there is a snowball aspect to its popularity. The spectacular triumph at the box office secures the short term box office potential of all the major characters involved (Thor, Captain America and Iron Man) plus affords feature film opportunities to the other major players (Black Widow, Hawkeye and Nick Fury).

In point of fact, the entire Marvel universe is now in play with regards to future movie development. As such, The Avengers has ripple effects enough to make it the movie equivalent of The Butterfly Effect. Everything regarding Marvel has been fundamentally changed by the explosive popularity of The Avengers.

In August of 2009, Disney purchased Marvel for $4 billion in a deal that many people believed was a dangerous financial risk. At this moment, it appears to be the company’s strongest acquisition since ESPN, even above Pixar. BOP has oftentimes chronicled the importance of Cars in terms of toy merchandising. Cars toys have generated over $6 billion of revenue since the original movie’s release in 2006. Ownership of Marvel allows Disney to double down in terms of toy sales revenue.

To wit, take a look at the picture at the top of the column. This is what we found when my wife wanted to purchase an Avengers Lego set last weekend. Amusingly, the entire adjoining wall of Battleship merchandise was wholly untouched. Merchandise licensing is the driving force in tentpole motion picture development and The Avengers has simply eviscerated the competition in this regard.

Circling back to box office discussion, no matter what anyone involved with the production may say now, if you had asked anyone from The Avengers six months ago what they expected of the box office, every single person would have been happy with $400 million domestically. I mean thrilled. I am talking “I just won the lottery *and* Brooklyn Decker pleasured me earlier today” euphoric. There is no doubt in my mind of this. That total would have guaranteed its placement among the top 15 domestic performers of all time. It also would have meant that The Avengers virtually matched The Hunger Games at the box office, a necessary step to claim the title of most dominant box office performer prior to The Dark Knight Rises.

This leads us to a wonderful question. If The Hunger Games team was hoping for $200 million and did $400 million (it’ll get there) and The Avengers team was hoping for $400 million and did $600 million (it’ll get there…probably), exactly what should the producers of The Dark Knight Rises be hoping for? I think we all have strong opinions on this, but the honest answer at this moment is “second place." As long as The Dark Knight Rises surpasses The Hunger Games, which is going to finish just over $400 million, it will not be viewed as a box office disappointment.

I am of the opinion that this will transpire since the opening weekend of the film should place it almost halfway there. Even so, I struggle to envision a scenario wherein The Dark Knight Rises matches The Avengers in terms of total box office. I would like to circle back to a previous summer to provide a comparable analogy. At the start of 2004, Harry Potter and the Prisoner of Azkaban was poised to become the first Potter movie to launch during the summer. Expectations were impossibly high for this project since the addition of summer vacation ticket sales from children should have enhanced the already massive ticket sales of the Potter titles to date. Plus, Prisoner of Azkaban offered better source material than the previous two titles.

Someone forgot to tell the consumers about this. They only had eyes for the sequel to a fractured fairy tale about an ugly ogre who falls in love with a princess who decided to become an even uglier ogre. Several years and multiple atrocious sequels down the road, I think we collectively regret this decision. The Potter franchise is a flag bearer for franchise quality while Shrek is…shameless commerce in action. Even so, Shrek 2 earned an incomprehensible $436.5 million while Prisoner of Azkaban proved to be the worst performer in the eight-movie Harry Potter franchise. The clear cut front runner on paper “only” earned $249.5 million domestically, only 57% of what Shrek managed. This is a prime example of why being the underdog like The Hunger Games and The Avengers is better than being the heavy favorite like The Dark Knight Rises. Unreasonable expectations cripple perception.

Consider this. If I had asked you at the start of the year what would be a reasonable opening weekend for The Dark Knight Rises, you would have vacillated between estimating its box office just north of Harry Potter and the Deathly Hallows Part 2’s $169.2 million or just below that number. Everyone believed that to be the target range for The Dark Knight Rises. Now that The Hunger Games, a largely unknown property 12 months ago, has opened to $152.5 million, our perception as well as our expectation for The Dark Knight Rises has been fundamentally altered. Is that reasonable? I am undecided.

Either way, what we recognize is that no matter how laughably the MPAA sticks to the company line that the average ticket price is under $8, the skew created by mega-expensive IMAX and 3D purchase cost has extended the potential for opening weekend as well as final box office take. We have created a moving target in this regard, one that has been around for 25 years now but whose discrepancy has grown exponentially over the past three years. The Dark Knight Rises is arbitrarily deflated in terms of opening weekend box office by Christopher Nolan’s artistic choice to eschew 3D and its inflated ticket revenue generation. Yes, there will still be IMAX but The Avengers will have a higher overall ticket cost median than The Dark Knight Rises. As such, the latest Batman film is playing from behind in terms of increased expectations, heightened competition and potential ticket revenue.

Will The Dark Knight Rises manage exceptional box office? Of course. Will that business be enough to view the project as a triumph? The magic 8-ball is cloudy on this topic. Using another 2004 release and its sequel as an example, we can readily understand the potential pitfalls for Batman. Spider-Man 2 earned $373.5 million, somewhat less than its immediate predecessor’s $403.7 million. Still, that was a tremendous result and the quality of Spider-Man 2 is above reproach. In fact, I maintain it is on the shortlist for best comic book adaptation of all time.

How did the performance of Spider-Man 2 help Spider-Man 3? On opening weekend. This is how the process works. The quality of a movie directly impacts the opening weekend debut of its sequel. Spider-Man 2 was phenomenal and so Spider-Man 3 shattered the domestic debut record by $16.5 million. There was, however, a problem. I call it the Jazz Hands Imbroglio. Whereas Spider-Man was well received and Spider-Man 2 was much beloved, Spider-Man 3 was the most recent comparison to Batman and Robin, a seemingly infallible sequel that somehow failed anyway. Its final domestic take of $336.5 million represented easily the worst legs in the franchise.

The failure of Spider-Man 3 fundamentally altered the perception of Sam Raimi’s retirement from Spider-Man from tragic to requisite. With The Dark Knight Rises, Christopher Nolan is in exactly the same situation…and that was before The Hunger Games and The Avengers tore up the box office. As such, the fate of The Dark Knight Rises will be determined ultimately by whether the movie is better than its trailers or instead accurately reflected by them. And I say that as someone who thinks Bane is a better Batman villain than The Joker. In hiding the story of The Dark Knight Rises from the advertising, the producers are taking a huge risk that only pays off if the third Nolan-Batman film exemplifies the same impeccable quality as the first two. I am hard pressed to recall a 2000s release that faces more pressure than The Dark Knight Rises now does due to internal production choices as well as outside industry developments.