'Inside Out 2' hits theaters for an increasingly rare 100-day run

disney looks to bring a little joy to theaters with the upcoming release of Pixar's “Inside Out 2.”

Current expectations see the animated sequel easily surpassing $85 million during its domestic release this weekend, which would make it the highest debut of any film released in the United States and Canada in 2024. Some are even predicting that the film could gross more than 100 million dollars. ticket sales, a feat not seen since July 2023 when Warner Bros.' “Barbie” hit theaters.

“Inside Out 2” has already grossed $13 million in Thursday night preview screenings in North America. By comparison, 2019's “Toy Story 4” generated $12 million in its Thursday previews and grossed $120.9 million in its opening weekend.

Any opening figure above $50 million would be a boon for Pixar, which has struggled to regain its footing at the box office in the wake of the pandemic. However, Disney appears to be confident about “Inside Out 2,” as the film is expected to have a 100-day theatrical run, a period almost unheard of these days for animated films and non-blockbuster action films.

While most consumers are agnostic about theatrical release windows (the period of weeks or months that a film plays exclusively in theaters before hitting streaming or other on-demand options), for theater operators and box office analysts, a commitment of more than three months of big-screen exclusivity is a big deal.

Before the pandemic, the industry standard was what's known as a 90-day theatrical window (although the average was actually closer to about 75 days, according to market research firm The Numbers).

Only a few films would extend beyond that date: usually massive franchise films or blockbusters. After that time period, a film could move into the home video space, which included digital downloads, DVD and Blu-Ray discs, and availability on streaming sites. The films would continue to be shown in theaters after that date, but would then compete with sales in the domestic market.

When the pandemic hit and theaters were forced to close, studios had to decide whether they would postpone the release of their movies until theaters reopened or put them on streaming or video on demand in the meantime.

Disney was one of the companies that chose to make several of its animated offerings available in the home market during that time.

When theaters began to reopen, studios renegotiated the amount of time films had to remain on the big screen before they could reach the domestic market. After all, new Covid variants and a vaccine that was not yet widely available had led many moviegoers to stay home. The result has been a highly variable period of exclusivity, as each studio negotiated its own deal with the major theater chains.

For example, Universal and Focus Features signed a deal in which films had to play in theaters for at least three weekends, or 17 days, before they could move to premium video-on-demand platforms.

“Ninety-day windows were always going to be unsustainable,” said Jeff Kaufman, senior vice president of film and marketing at Malco Theatres. “The pandemic kind of accelerated that.”

Changing movie theater windows have left studios and theaters with a complex equation.

Studios had been pushing to reduce the window before the pandemic to reduce marketing expenses, explained Daniel Loria, senior vice president of content strategy and editorial director at Box Office Company.

Studios were paying a significant amount to market films for theatrical release and then, months later, having to generate buzz again to transition a film to the domestic market. With shorter windows, studios don't need to spend as much to reacquaint audiences with a movie since it's probably still fresh in their minds from its debut.

“My impression of the films that are going to [premium video on-demand] early is usually a decision not to double the marketing spend,” Loria said.

Last year, the average run for a widely released film was 39 days, according to The Numbers. So far in 2024, the average period is 29 days. Of course, as blockbuster titles are released in the summer months, that number is expected to grow.

There are cases where studios have expanded their runs far beyond the typical theatrical window. In 2022, for example, Paramount and Skydance's “Top Gun: Maverick” ran for more than 200 days in theaters before heading to the domestic market.

And these figures only refer to the time when a movie is available for rental in the domestic market. Typically, the wait before movies are available as part of subscription streaming services, often considered “free” by those subscribers, is much longer.

The Numbers reported that the average time lag between theatrical release and streaming subscription launch was 108 days in 2023.

At first there were experiments with releases on days and dates, which meant that the films would arrive in theaters and on streaming at the same time. But that faded when studios realized that these simultaneous releases cannibalized sales and led to higher piracy rates.

There is also the consideration that many actors and directors have contractual stipulations that give them a percentage of theatrical profits. In 2021, actress Scarlet Johannson sued Disney for releasing the 2020 Marvel film “Black Widow” on streaming and in theaters at the same time. She claimed that her deal with the company guaranteed an exclusive theatrical release for her solo film, and that her salary was based, in large part, on the box office. Johannson and Disney later settled for an undisclosed monetary sum.

Still, Universal has dabbled in the day-and-date model for horror movies around Halloween, most recently opting to release “Five Nights at Freddy's” in theaters and on streamer Peacock at the same time. While the film had a stellar opening weekend, surpassing $80 million at the domestic box office, ticket sales were down more than 76% in the second weekend, reaching just $19 million.

Of course, shorter exclusivity and lower ticket sales can be detrimental to cinema chains, which are still struggling to recover operations post-Covid. But some argue that getting the window wrong can also be bad for the movie.

“A sufficient window is important not only for exhibitors, but also for our studio partners, as it is necessary to offer all the promotional and financial benefits of a film's theatrical release, which continue to significantly improve the lifetime value of a film. film across all distribution channels, including streaming,” said Sean Gamble, president and CEO of Cinemark.

It's a lesson Disney learned in the wake of the pandemic.

Both Walt Disney Animation and Pixar struggled to regain a foothold at the box office after pandemic restrictions eased and audiences returned to theaters. Much of this was due to the fact that Disney opted to release a handful of animated films directly to the Disney+ streaming service during the movie theater closures and even once theaters had reopened.

The company sought to fill its fledgling streaming service with content, expanding its creative teams and sending theatrical films directly to digital.

That dynamic trained parents to look for new Disney titles on streaming, not in theaters, even when Disney opted to return its movies to the big screen.

As a result of that and other challenges, no animated film from Disney, Pixar or Walt Disney Animation has generated more than $480 million at the global box office since 2019. By comparison, just before the pandemic, “Coco” generated $796 million dollars worldwide, while “Incredibles 2” grossed $1.24 billion worldwide, and “Toy Story 4” grossed $1.07 billion worldwide.

Box office experts consider “Inside Out 2” a barometer of Pixar's health and its future. If the film can capture the audience's attention and perform well during its opening weekend and beyond, animation studios will regain the goodwill of the public and the industry.

A 100-day window for “Inside Out 2” may be the key.

Disney is one of the only studios that doesn't have a traditional premium video-on-demand window, according to Sebastián Gómez, data and research analyst at The Numbers. That is, once the theatrical window ends, it will go to Disney+, where subscribers will be able to watch it for free, rather than as a rental option in between.

By delaying its home release, Disney is signaling to the public that its latest Pixar release is a “must see” on the big screen.

The first “Inside Out” film, which hit theaters in 2015, generated $90.4 million during its opening weekend and grossed more than $850 million at the global box office.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.