Pixar is scrambling to win back its audience

• The opening-weekend box office for "Elemental" was the worst in Pixar's history.
• Industry insiders and sources at Pixar told Insider why the beloved animation house is in a slump.

Going to Las Vegas to attend CinemaCon, the annual movie-theater convention where studios showcase never-before-seen footage of their upcoming titles, is an adventure in itself.

Taking place smack-dab on the famous strip, attendees rarely see the sky as you pinball from one event to the next inside Caesars Palace. You bypass everything from rowdy gamblers taking bets to chain-smoking grannies working the slots on the casino floor to countless bachelorette parties.

But earlier this year, theater owners and members of the press had no interest in any of the debauchery around them. Thanks to a backlog of unreleased blockbusters due to COVID, this summer was set to be an unprecedented one as an "event" movie was seemingly set to open every weekend. At CinemaCon 2023, the phrase "movies are back" was no longer a punchline. It was really going to happen.

Disney's presentation was a highlight. Once the doors opened to the huge auditorium inside Caesars, which is also home to Adele's residency, badge members rushed passed security to grab 3D glasses and snag seats with such fury you could easily mistake them for a crowd readying themselves to see the Grammy winner perform.

The presentation, emceed by Disney's executive vice president of theatrical distribution Tony Chambers, featured sneak peeks of "Indiana Jones and the Dial of Destiny" and the live-action "The Little Mermaid." Then the audience was asked to put on their 3D glasses to view the first 20 minutes of the next Pixar release, "Elemental."

The mesmerizing footage showcased a couple made of fire arriving by boat to start a new life in Element City, a diverse metropolis made up of predominantly wind, water, and land people. Immediately, the fire couple is outcasted until they discover a run-down building that they turn into their home and an authentic fire food store. With the birth of their child, they now have something to hand down to her when she grows up.

But you probably didn't know any of this was in the movie if you only saw the trailers.

With a marketing campaign that instead leaned heavily on the love story between Ember, a girl made of fire, and Wade, who is made of water, complete with music from the classic Katy Perry pop song "Hot N Cold," the movie felt more like a callback to a 1990s-era rom-com than a Pixar movie.

It resulted in "Elemental" having a domestic opening weekend of just $29.6 million, the lowest ever for a Pixar release. Quickly, industry pundits pounced on the studio.

It's just the latest misstep by the animation studio, which has largely been the crown jewel of Disney for close to three decades.

Insider spoke with studio executives, movie-theater owners, box-office analysts, and sources within Pixar, who said that the beloved animation house is on a "misguided mission." They said Pixar is suffering from a lack of excellence combined with an influx of its titles onto Disney+ during the pandemic.

Sources told Insider that putting Pixar titles on Disney+ had lasting damaging effects

Pixar's trouble started when COVID hit in 2020 and executives at Disney released its titles "Luca" and "Turning Red" on its streaming service Disney+ instead of in theaters. It led to frustration by staff who wanted their work to be seen on the big screen, as Insider previously reported.

"Back then I remember someone telling me, 'We're all about streaming now,' I was shocked," a source familiar with the inner workings of Pixar told Insider on the condition of anonymity as the person was not authorized to speak publicly. (Disney did not respond to Insider's request for comment on this story.)

Disney announced a return to theatrical Pixar releases with June 2022's "Lightyear," which was expected to the studio back on track. What better movie to go back into theaters with than one that extends the beloved "Toy Story" universe?

But a tsunami of controversies and bad press completely engulfed the release. Pixar staff claimed Disney executives cut out a same-sex kiss in the movie (it was put back in following the uproar around then-CEO Bob Chapek's handling of the "Don't Say Gay" bill). Tom Hanks, who voices Woody in the "Toy Story" franchise, also questioned why his costar Tim Allen wasn't invited back as Buzz Lightyear in favor of Chris Evans, who voiced the space ranger instead.

"Lightyear" ended up earning only $226 million at the worldwide box office, a far cry from 2019's "Toy Story 4," which earned over $1 billion worldwide.

In the aftermath, Chapek was fired by the Disney board with Bob Iger returning to the role after stepping down just before the pandemic. With Iger back in his seat, a new mandate was quickly set: lean back into theatrical.

Inside Pixar, it was a relief.

"It was a misguided mission in the first place," said the Pixar source in regard to having its titles released exclusively through Disney+.

Sources blamed Pixar's slump on 'Soul' director Pete Docter, who's not as tough on quality as his predecessor John Lasseter

But now the hard work of marketing "Elemental" began — only seven months ahead of its opening weekend.

Trailers and TV spots focused more on "unlikely friends" going on an adventure, the Pixar source added, which didn't resonate. It was obvious that marketing the movie was a "challenge" for the studio, said the same source, because "kids don't care about love stories."

The confused advertising was evident.

"It was just an unclear marketing message in the trailers," Brian Schultz, the founder and CEO of LOOK Cinemas, told Insider. "It didn't sell the positive message in the movie strong enough."

However, several industry sources and some within Pixar believe the slump at the company goes beyond the bad marketing of "Elemental." They said Pixar's troubles are because of the loss of its longtime leader John Lasseter, who had a reputation for never settling and demanding excellence.

The director of the first two "Toy Story" and "Cars" movies, as well as the CCO of Pixar and Walt Disney Animation Studios, Lasseter never shied away from tough love if something on a project wasn't good enough, sources said. (Lasseter was ousted in 2018 following sexual misconduct allegations. He admitted to "missteps" in a memo to staff. He's now the head of Skydance Animation.)

Pixar sources said the studio's current CCO, "Soul" director Pete Docter, lacks that intense drive for a higher quality of work that Lasseter possessed.

"That didn't help 'Lightyear,'" said a Pixar source regarding Docter's kinder and gentler leadership, which they said resulted in the lackluster box office. "I don't think John would have ever let 'Lightyear' happen."

Disney 'devalued' Pixar when it put its movies on Disney+ exclusively, but it's not a death blow

But for most inside Pixar, and those observing from the outside, it's the studio's pivot to Disney+ that put the animation house behind the eight ball.

"Because of Disney+ they have trained people to wait for Pixar and Disney movies," an executive at another studio told Insider on the condition of anonymity. "They have taken their eye off the ball."

Even Docter admitted to Variety before "Elemental" opened that audiences are waiting for Pixar titles on Disney+.

"It's more expensive for a family of four to go to a theater when they know they can wait and it'll come out on the platform," he said.

"Disney devalued Pixar's brand by teaching families they can just watch on streaming," Schultz added.

However, it seems the flaws Disney inflicted on Pixar will not be fatal for the beloved animation house. Pixar showed it still had some zip on its fastball as "Elemental" rebounded with an $18.4 million total in its second weekend in theaters, a 38% drop from the weekend before. (Big Hollywood movies typically see a 45% drop or more in their second weekend, especially during the crowded summer movie season).

Despite its previous troubles, many industry sources Insider spoke to believe Pixar can get out of its slump. With Pixar movies back in theaters again, over time the brand will be recharged, they said.

"Disney's real endgame here is making a dent in the box office with an original concept, something Pixar has consistently done throughout its history," Jeff Bock, senior media analyst at Exhibitor Relations told Insider. "I think Pixar realized it has to win back the animation crown."

Now the studio is seemingly trying to make it up to Pixar, especially since "Elemental's" second-week box office numbers proved word-of-mouth marketing is working. As "Elemental" star Mamoudou Athie, who plays Wade, told Insider: "It's going to be out until Labor Day in theaters and that doesn't happen anymore. That's how much the studio believes in it."