Before the pandemic, the 4th of July weekend was a massive period for both new movie releases and theme-park attendance.
Because people get an extra day off (or two in some years) over the holiday period, it has been a popular time for studios to release tentpole movies and for them to take vacations.
For decades, in fact, July 4 weekend was perhaps the second-biggest summer box office release period, after Memorial Day. The holiday came in second only because it moves around and isn't always on a Friday or Monday. In some years, when July 4 hits on a Thursday or a Tuesday, many Americans get a four-day weekend.
DON'T MISS: Disney World Visitors Get a New Free Service
This year, even as July 4 landed on a Tuesday (which gave many people a four-day weekend), it did not deliver its usual magic for movies or theme-park attendance, at least at Florida's two major parks.
It was a rough period for Walt Disney (DIS) -) which saw "Indiana Jones and the Dial of Destiny" underperform at the box office while attendance at Disney World was shockingly low.
It would be easy (and lazy) to blame the poor July 4 results on the Mouse House's feud with Florida Gov. Ron DeSantis. The right-wing candidate for president has targeted the state's largest tourism draw for its support of LGBTQ+ causes and its opposition to his so-called Don't Say Gay legislation.
The reality is that while what DeSantis calls his war on woke might be costing Disney customers, it's not the big problem for Chief Executive Robert Iger.
Disney has two massive problems that the CEO has to handle if he wants to get his company back on track.
Image source: Walt Disney
The Movie Business as We Knew It Is Over
Only "The Super Mario Bros. Movie" has crossed $1 billion in global box office in 2023 ($1.34 billion). Movies that easily would have passed that mark including "Fast X," Guardians of the Galaxy Vol. 3," and "Spider-Man: Across the Spider-verse" fell short.
In addition, movies that would have been solid hits, including "The Flash," the live-action "Little Mermaid," "Ant-Man and The Wasp: Quantumania," and Pixar's "Elemental," all underperformed at the box office.
In fact, you can argue that only "Mario Bros." and "John Wick 4" met expectations.
Disney has a lot of movies named above, but while it's easy to blame superhero fatigue or pretend that DeSantis calling out the company hurt its box office, the reality is that people simply go to the movies less often.
Few films draw people to theaters, and that changes the economics of making movies. Disney still has the intellectual property people want to see, but the theatrical model is broken. That means that not just Disney but also Comcast (CMCSA) -), Sony (SONY) -), and other studios have a major problem to solve.
You can't spend blockbuster money on movies when people won't go to theaters in large numbers to see them. The current trajectory suggests that many movie theaters will close and more content will flow to streaming services, which likely mean lower movie budgets.
Disney Has a Florida Problem (That's Not DeSantis)
My wife and I own a condo in a resort about 20 minutes from Disney World. We have exactly one paying rental this summer, at the bottom of the rates we're willing to accept. That problem isn't unique to us as the resort itself has been at a low level of occupancy all summer.
The same thing is true for a friend who owns a townhome in a higher-end resort that's even closer to the Disney parks. That unit generally rents for double or triple what our place does per night. People are not visiting Florida at the level they traditionally have.
That has hurt Disney, but it has also hurt Universal Studios. DeSantis might be part of the problem, as the NAACP and a number of LGBTQ+ groups have issued warnings telling people not to travel to Florida, but the wariness is likely more economic than political.
Both Disney and Universal Studios have seen lower attendance this summer. That's almost certainly because more Americans are concerned about their finances and are reluctant to spend more than $100 per person, per day on theme-park tickets when they have cheaper options.
Royal Caribbean (RCL) -), for example, has passed its pre-covid booking levels. That's not because people like cruises more than Disney World. It's because taking a cruise, which includes meals and entertainment in the base price, offers a much better value in a time of economic uncertainty.
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