What about Avatar?

How does a $2.74 billion franchise bet fare in Hollywood's new era?

Last week, I wrote about everything that Disney had planned for Disney+ over the next few years. Not once did Avatar 2, Avatar 3, Avatar 4, or Avatar 5 come up, as my colleague Chaim Gartenberg pointed out. It’s a little bewildering; Avatar 2 already finished filming, and this is a billion-dollar franchise (albeit one Disney inherited from 21st Century Fox) that Disney also started incorporating into its own theme parks. If Avatar is a big deal IP for Disney, where was it during the company’s big investor day?

I have some thoughts. 

We remember Avatar for two primary reasons: the $2.74 billion box office figure that remained untouched until last year’s Avengers: Endgame (a feat only pulled off by Endgame being re-released in theaters) and James Cameron’s use of new 3D technology to create a technical masterpiece. Anecdotally, most people I talk to can’t remember any of the film’s key details or characters. They don’t have any attachments to the film, and some truly believe that Avatar 2 is cleverly disguised vaporware. 

Avatar doesn’t have the same continuous culture cache of the Marvel Cinematic Universe, Star Wars, or the DC franchise, but it’s insane to compare. The MCU is constructed of 23 movies released over 12 years; there’s a new Batman movie every few years; Star Wars is inescapable. Avatar can only be judged currently by one film — and the impact that one single film had on our current movie landscape is why Avatar can’t be ignored, even if the original film has become a meme since its 2009 release. Let’s break it down into key points:

• Franchise IP explosion 

• “Sequels and then some” strategy plays

• Calendar release changes 

• China’s box office growth over the last 11 years

• Technology driving ticket purchases

• Spacing, or fatigue

• Fandom (really, Standom) as key currency 

When Avatar came out, the industry was much different than it is now. Netflix wasn’t the powerhouse it is today, top franchise releases in 2009 included Harry Potter, Twilight, and Transformers, the DC Extended Universe didn’t exist, and the Marvel Cinematic Universe was just two movies (one Disney still doesn’t own) and an idea in Kevin Feige’s mind.

Arguably the biggest trend of the 2010s barring the streaming revolution was a strategic pivot to prioritizing franchise development at the major studios, relying on sequels and spinoffs. Disney moved into annually releasing three Marvel movies, a Star Wars film, Pixar sequels, and live-action adaptations of its popular animated library. Warner Bros. ordered five — five! — Harry Potter films (the Fantastic Beasts franchise) based on a 100-page book about magical creatures. Sony began expanding its own Spider-Man universe, while Universal went all in on its Fast and Furious and Despicable Me/Minions universes. Franchises based around blockbusters always existed (look at the ‘80s), but the goal with any new or existing IP seemed to be building a multi-picture universe that would take years to complete.

Success ebbed and flowed; 2012 was a mega successful box office year because of movies like The Avengers, Skyfall, The Dark Knight Rises, and The Hobbit: An Unexpected Journey, all which surpassed $1 billion. 2014 was a less stellar year, with Transformers: Age of Extinction being the only film to pass $1 billion — even with movies like Captain America: Winter Soldier, Guardians of the Galaxy, The Lego Movie, and a Hunger Games installment. Still, while 2014 saw a five percent decrease in overall box office revenues compared to 2012, there’s something more important to note: seven of the top 10 highest grossing films were sequels. The following year would see even more sequels — including Age of Ultron and Jurassic World — plus Rise of Skywalker’s release. 

There’s a very simple explanation for studios pushing more and more mega blockbuster sequels and franchise IP, beyond the fact that they routinely perform well. As I’ve noted in this newsletter before, per capita attendance at theaters is at the lowest it’s been in 100 years, with people only going to see about four movies on average. Of the movies people did venture out to theaters to see, the vast majority were sequels and new franchise installments. Mass general audiences aren’t less interested in movies, but they’re spending money on a more select group of titles.

Getting people into theaters takes event films, big tentpole productions that can’t be replicated on booming streaming services people are spending more time watching at home. Studios that needed high return on investment through theatrical releases focused more on successful IP and franchises; streamers were bidding on high quality films from A-list directors in an attempt to compete with the big tentpole films that made subscribers feel better about spending $10 a month. 

Betting on new IP in theaters became a riskier gamble in the 2010s. That’s especially true considering every major studio was trying to win people’s attention, hoping to produce one, two, or three of the movies people might actually go out to see. The annual theatrical calendar didn’t become littered with more movies, but there were more blockbusters packed into those 52 weeks. When Avatar came out, there was about a 10-week period between its release and the next tentpole film, Disney’s Alice in Wonderland in 2010. Avatar had a chance to breathe, allowing the film to find its success through word of mouth. Its only real competition was Dear John and Shutter Island. Vastly different movies. 

In 2019, there were four weeks between Captain Marvel and Shazam!; three weeks between Shazam! and Avengers: Endgame; two weeks between Endgame and Detective Pikachu, and only one week between Detective Pikachu and John Wick. It’s exhausting. Endgame was the biggest film of 2019, but it only had 14 days to own its intended audience’s attention before a popular Pokemon movie came out and stole some of that light. For a movie with a reported budget north of $300 million, not having 10 weeks to reign supreme with very little competition makes things slightly more difficult. (Spoiler: Endgame did just fine.)

Ironically, here’s where Avatar 2 has one advantage in Hollywood’s new era — breathing space. Avatar 2 was supposed to be released on December 18th, 2020. Instead, it will now open in December 2022. That’s a 13 year break between one of the most popular films in history and its sequel. It provides a rare luxury that most franchise films don’t see — anticipation, curiosity, and heightened interest. The last instance I can think of was the decade period between Revenge of the Sith in 2005 and The Force Awakens in 2015. 

There’s a good chance that Avatar 2 will perform well if only because a number of people will undeniably be curious about why this movie took 13 years to complete. Audiences are used to having a new Star Wars, Marvel, or even DC movie every year. They’re used to third, fourth, and fifth installments in their favorite franchises. Some of those movies are great, and feel like they add a unique perspective on a character or universe (Thor: Ragnarok, Shazam!). Some of those movies feel like inevitable additions that are slogs to sit through (Thor: The Dark World, Avengers: Age of Ultron).

Critics, journalists, and analysts have written a bunch about blockbuster fatigue or superhero overload. Avatar 2 has the advantage of belonging to a “franchise” that people are familiar with, but hasn’t had the opportunity to enter a period of fatigue. It’s new, even if it’s a sequel. 

Graph courtesy of Matthew Ball (@ballmatthew on Twitter!)

When Avatar came out, one of the most incredible feats the film accomplished at the box office was how people responded to it globally. Let me take some data from analyst and venture capitalist extraordinaire Matthew Ball: Avatar grossed $204 million in China, making up just over 20% of the country’s entire box office revenue for the year. Since 2009, box office revenue in the country has skyrocketed (this shouldn’t be surprising to anyone who has ever taken part in the “do movies need to hit $1 billion?” debate).

In 2019, China saw $9.5 billion in box office revenue compared to $910 million in 2009. If Avatar came out in 2019, and saw the same success it did in 2009 even with increased competition, its total box office revenue would be unparalleled. Avatar worked in a market that has only become more important to studios over the last 11 years. Just ask Disney. Avatar’s story (effectively Pocahontas or Fern Gully) worked on a global level, and helped Avatar become the movie that everyone was willing to spend time and money on. If Avatar 2’s story continues to resonate with people around the world, the film could see similar success. 

Another reason that Avatar was so successful was because of technology used to make it feel especially transformative in 2009. By May 2010, the New York Times’ A.O. Scott would refer to 2010 as a “3D frenzy” with movies like How to Train Your Dragon and Shrek, but it was Avatar that kicked off a wave of seemingly every movie being made available in 3D.

Much like giant franchises based on beloved IP that belonged to even bigger universes, 3D technology was enough to get people into theaters. You couldn’t get a 3D movie on Netflix or Hulu, but theaters were creating “immersive” experiences. Scott added that the “subsequent success of every other nonnature-documentary feature released in 3D this year … has laid the groundwork for a new conventional wisdom that will hold at least until the first major 3D flop.” 

We can now appreciate 3D for what it is — a gimmick that most movies do not need, and I would personally prefer to never see again  — but breathtaking technology that made movies feel like must-participate-in-events drove people to theaters. Remember, Avatar 2 took 11 years to make in part because Cameron needed the underwater filmmaking technology to be there, according to the director. A large portion of the film will reportedly take place under water, and use equipment that will ideally create a type of image we’ve never seen before.

If Cameron accomplishes that, Avatar 2 will likely be in the same position that Avatar was in 2009 — a movie that uses some form of breathtaking technology that people who wouldn’t usually go to theaters will throw on their coats, sit down next to a stranger who’s sneezing, and sit through 25 minutes of trailers just to see what’s up. If the technology isn’t there, or doesn’t create something truly spectacular, then people may not go through the hassle. Again, people are wary about theaters in general right now and, while I have no doubt audiences will return to theaters en masse, entertainment at home provided through streamers is better and more frequent than ever. Data has proven that most people need a reason to go to theaters. That reason is often spectacle.

Think of it like this:

While there are always opportunities for individual films to break out, franchise bets need to leverage and meet three important points: immediacy, technological brilliance, and tapped-in fandom. People have to feel like they

1. Must watch this movie the minute it comes out

2. The movie has to make use of AV tech that only theaters can provide so people actually head to theaters

3. Returning fans have to feel continuously invested in the outcome of their favorite characters or favorite worlds through each installment — even if their favorite character is absent (Doctor Strange leads to Avengers: Infinity War)

Therefore! In a streaming-alternative or streaming-first era, if the film or theoretical franchise doesn’t meet these requirements, and the return on investment is harder to guarantee, it’s much more difficult to justify spending hundreds of millions of dollars on marketing for a theatrical release when that film can be used to help boost and bolster a streamer’s subscriber base.

All of which leads to the bigger question about Avatar — can Avatar work as a five-part franchise? Does it have the right ingredients to sell merchandise, drive people to Disney’s parks (Pandora does exist inside Disney World), and create the type of fan frenzy that Disney’s other IP accomplishes? Can Disney roll out an Avatar series or two that drives subscribers to Disney+ and helps reduce overall churn? Will people tune into Monday Night Football on ESPN, Jimmy Kimmel Live! or Good Morning America! on ABC to watch something Avatar related? Will Avatar hold people’s general curiosity if there are new movies being released every two or three years, as Disney currently has planned? 

It’s difficult to say. Franchises work because of fandom, and fandom is currency. Fandom drives box office revenue (remember the YouTuber who went to see Avengers: Infinity War more than 50 times in theaters because he wanted “to watch it as many times as possible,” in order “to support Marvel and the Russo brothers”), but it also drives recurring, additional revenue for companies’ other divisions. Disney didn’t buy the rights to Spider-Man merchandise just for shits and giggles — merchandise is an ongoing product that Disney can sell as its movies continue to satiate and develop new fans. Just think of all the Baby Yoda merchandise that pops up on Instagram, Twitter, and in TikToks. 

Avatar is not Marvel, Star Wars, DC, Lord of the Rings, or Harry Potter. A quick glance on sites like Archive of Our Own and Tumblr return far more fanart and fanfiction for the Marvel Cinematic Universe or Harry Potter than Avatar. That makes sense; there’s only one Avatar movie and an entire media galaxy centered around Harry Potter and Marvel. But Avatar 2, Avatar 3, Avatar 4, and Avatar 5 need to create a similar type of fan-driven cycle. It’s those fans’ disposable income that helps Disney continue to develop merchandise, theme park areas, films, and TV shows. People need to continue showing up and talking about those characters and stories far after the credits roll. 

Is there room for another big franchise in 2022? Yes, without question. Is that franchise going to be Avatar? Less clear. But my best prediction is that Avatar 2 will be an absolute success, but the Avatar franchise is going to have to fight for its fandom, and that’s much more difficult than simply filling seats.