‘Moana 2’ was destined for streaming. Now it’s breaking box office records

Walt Disney Co.’s animated sequel “Moana 2” navigated its way to No. 1 at the box office with a record-breaking domestic Thanksgiving weekend debut, a remarkable feat considering that this big-screen return to Motunui almost didn’t happen.

Led again by actors Auli’i Cravalho and Dwayne Johnson, “Moana 2” scored $221 million domestically for the five-day Thanksgiving weekend, with a worldwide gross of $386.3 million, according to Sunday studio estimates. That easily topped the previous Thanksgiving record-holder, Disney’s 2019 blockbuster “Frozen 2.”

The stellar numbers placed “Moana 2” ahead of Universal Pictures’ heavily marketed musical “Wicked,” which raked in an impressive $117.5 million in its second weekend, bringing its domestic total to $262.4 million so far. Paramount Pictures’ “Gladiator II” came in third place with $44 million for a total of $111.2 million to date.

The sequel to “Moana,” the 2016 animated adventure story, was originally intended as a series for the Disney+ streaming service. But the company changed course, announcing the move in February during its fiscal first quarter earnings call.

“We were impressed with what we saw, and we knew it deserved a theatrical release,” Chief Executive Bob Iger said during the call.

The strategy change signaled Disney’s optimism in the theatrical market and its ability to generate hundreds of millions of dollars in revenue, as well as its role in bolstering subscriber growth and retention for Disney+ – a key metric for the company as it continues to build out the financial strength of the streaming service.

“They’ve got to make movies and release them theatrically because that’s their business,” said Joe Rosenberg, director of industry relations at Chapman University’s Dodge College of Film and Media Arts. “This idea that they were going to chase Netflix and win with the strategy they had, I think that proved to be a strategy for all companies that didn’t quite work.”

The original “Moana” was wildly successful, garnering more than $643 million worldwide at the box office. The film’s soundtrack was populated with several hits, including the anthem “How Far I’ll Go,” which has become a staple of family car rides and follows a generations-long tradition of famous Disney songs. (In addition to the animated sequel, a live-action “Moana” film is also in the works.)

Reviews are far more mixed for the sequel, but that’s not stopping families from rushing out over the holiday. The reported budget for the film was $150 million.

The move to put “Moana 2” in theaters rather than send it straight to streaming is an about-face from the strategy Disney previously employed to build its service.

After Disney+ launched in 2019 at a bargain-basement price, the company put its efforts into producing dozens of shows specifically for the streamer, in an attempt to build subscriber interest and loyalty. During the COVID-19 pandemic under then-CEO Bob Chapek, Disney sent a handful of Pixar movies straight to Disney+, including the acclaimed “Turning Red.”

But that proved expensive, costing Disney billions of dollars of box office revenue left on the table. After returning in 2022 as CEO of the company, Iger announced a multibillion-dollar cost-cutting plan that led to thousands of layoffs with the intention of refocusing Disney on the quality of content, rather than quantity.

Delivering “Moana 2” to theaters is a sign of Disney’s confidence in the project, Rosenberg said. Though the theatrical market is still recovering from the effects of the pandemic, Disney hit gold twice already this year with billion-dollar box office titles “Inside Out 2” and “Deadpool & Wolverine.”

“When you look at films like ‘Barbie’ and ‘Oppenheimer’ and others where people really went to the movies and enjoyed the experience, you start to realize, wait a minute, theatrical is a good business,” Rosenberg said. “We can make a lot of money on the right films that we release first theatrically, and then streaming becomes that second window after theatrical.”

That means Disney can double-dip – not only will the company squeeze out dollars from the theatrical release, but the buzz around “Moana 2” can also fuel interest in seeing it later on Disney+. Company executives have previously said that new theatrical releases also fuel interest in prior installments of a franchise, such as a boost in Disney+ sign-ups to view 2015’s “Inside Out” as well as prior “Deadpool” and “Planet of the Apes” films.

Higher-quality content on the streaming service can increase subscriber growth, reduce churn and justify price hikes, said Laurent Yoon, senior analyst at Bernstein.

Disney increased prices on its streaming service in October, shortly after “Inside Out 2” was available on the platform and about a month before “Deadpool & Wolverine” arrived there.

“At the end of the day, the business model is to maximize revenue on that content investment,” he said.

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