Disney is in the midst of celebrating its 100th birthday, in a year it’s spent $2bn to stop us watching its films and shows: some thoughts.
The celebrations for the 100th anniversary of the Disney company have been giving us some real highlights these past few weeks. Primarily, the programme of animated films from its archives returning to cinemas, and I for one gladly partook of a fresh big screen showing of Beauty And The Beast a few weeks back. Furthermore, there are apparently posh exhibitions going on, and Walt Disney Animation Studios’ upcoming Wish looks like a lovely cap to the celebrations.
I’ve long been a fan of Disney’s animated films. I’ve enjoyed lots and lots of Disney live action movies. I’ve been to theme parks, I’ve bought the merchandise, I subscribe to Disney+, with its spangly Disney 100 logo. There’s a lot to enjoy, and there’s been a lot to celebrate. Disney has given the world an awful lot of very good stuff.
Yet I can also see – and parents will know this feeling – that what I’ve been watching this year is a birthday party going wrong. The equivalent of booking the community centre for a get together, and finding that nobody’s bothered to unlock it when you get there. Then, Asda didn’t get the food order. And the cake’s gone off.
Scale that up to the size of a multi-billion dollar corporation, and, well, you get the idea. That the Disney that’s in the midst of its 100th year is facing challenges that, even four years ago, would have been pretty much unthinkable. That its heavily protected image has also taken something of a battering. More surprisingly, that it seems stuck in a rut, without an obvious plan to get out.
It was 2019 after all when Disney had about as good a year as any company of its ilk could imagine. Not only did its films gross over $10bn – billion! – at the global box office, seven of its wholly-owned titles alone crossed $1bn apiece. It also had a chunk of Spider-Man: Far From Home too, so that sort of makes seven and a half.
Add in the merchandise, the add-ons, the footfall at theme parks off the back of all of that, and annual gross profits reported in 2020 crossed $21bn.
Again, billions. Pretty much every other studio was struggling to turn profits out of movies, or to get a single billion dollar film. Disney had them coming out of the fixtures and fittings.
It was at the point where the CEO who’d overseen the company’s dramatic change in fortunes, Bob Iger, could implement what was supposed to be his farewell project, the launch of the Disney+ streaming service. The ownership of a channel that would take it direct to consumers, without having to go through third parties. If it went well, Disney would directly reap the benefit of making its movies and shows. Nothing could go wrong.
Disney+ was so important to Iger that he pushed through the $70bn+ purchase of 21st Century Fox and its operations to fuel it. He further sacrificed large parts of the company’s home entertainment deals to make sure the Disney+ machine was fed.
And as Iger stepped down and Disney+ launched, it looked like the gamble had worked. He’d overseen an incredible near-two decades at the top, and left the company in what looked like pretty rude health.
Then, of course, a pandemic got in the way, and that hit Disney, just as it hit all of us. Yet what’s surprising is that it’s never really felt like it’s got back fully on its feet in the years that have followed. Particularly this one. What’s happened since, and where we are today, feels like a series of circumstances that have built into a greater whole.
Bob Iger (left) and Minnie Mouse
There’s little doubt, for a start, that Disney is paying a price for its choice of Iger’s immediate successor. He handpicked Bob Chapek to take over his job, and Chapek was soon embroiled in a public falling out with Scarlett Johansson over her remuneration for the Black Widow movie.
This in itself is the kind of spat between very rich people that it’s hard to have too much sympathy over. But what was different was that Disney’s disagreement with a major star had spilled out into the public arena. That certainly never happened on Iger’s watch.
Much has been written about the ultimate decision to defenestrate Chapek, with Iger coming out of retirement in November 2022. Yet nearly 12 months on, in such an important period for Disney, it does feel as though his magic touch has gone. It’s unhelpful, as this has been a turbulent year for Hollywood anyway. But if onlookers were hopeful that Iger could effect a fast turnaround, it’s been a very brutal reality check.
An example. Usually, Iger’s demeanour – at least the perception of that demeanour – was one of calm, of being able to make a deal, of being a careful diplomat. It was an uncharacteristic faux pas therefore when in July, he was asked by CNBC about the commencement of strike action amongst writers and specifically actors in Hollywood. His answer? “There’s a level of expectation that they have, that is just not realistic.”
The problem? Iger had horrifically misread the room. Not only is he the head of a company worth over $150bn, he also issued the comment at a retreat for billionaires. The stark contrast between striking actors and the person they wanted to write bigger cheques couldn’t have been much clearer.
Since then, Iger has been one of the key Hollywood chiefs trying to resolve the strikes. Yet weeks after writers agreed a fresh deal, actors are still on the picket line, holding up major blockbusters for Disney such as Blade (which has just gone in for another round of rewrites), Deadpool 3 and the live action retelling of Moana. Iger is one of the people key to resolving the strike, and had a reputation – again – as one of the very best dealmakers in town. That reputation has now diminished, not least with questions being asked as to whether that aforementioned Fox purchase was such a wise idea after all.
Surprisingly, it’s also the films that are letting the side down. Criticism continues to be aimed at Disney’s live action slate of movies, which after years of leading the industry has begun to look really rather tired. A decade ago, the strategy become a couple of Marvel movies, a Walt Disney Animation Studios project, a Pixar film, a live action retelling of a story previously told in animation to some degree, and a handful of franchise-driven gambles. That’s pretty much as things are to this day, and the signs are that the formula is running out of gas. We’re at the stage where Disney is remaking Moana in live action, less than a decade after the (brilliant) animated original landed.
Just look at this year’s box office results. The films that have soared have been Christopher Nolan’s Oppenheimer (with Disney rumoured to be the only studio that didn’t try and snag the project, outside of Warner Bros), The Super Mario Bros Movie and Barbie. Disney’s biggest hit, Guardians Of The Galaxy Vol 3, was the most warmly received Marvel movie in years, and its $845m box office returns are not to be sniffed at.
But further down the chart, its next most successful films – The Little Mermaid, Elemental, Ant-Man & The Wasp: Quantumania – all fell short of expected box office takings. The hugely expensive Indiana Jones And The Dial Of Destiny landed well, well short, topping out below the $400m mark.
Last year’s Strange World, meanwhile, a better film than its box office returns suggests, called into question Disney’s legendary ability to market a movie well. As several people reported to us, the first time they saw even a trailer for that particular feature was when they’d sat in a cinema, and it played before the film itself.
Other studios are struggling as well, it should be noted. But others are spreading their wings more effectively, and showing an appetite to try new things. Is Disney? Arguably not. Furthermore, whilst it’s not outright killing its golden geese, it’s certainly pulling at the feathers of Marvel and Star Wars, with an endless succession of spin-off television shows being used to try and keep the cash-hungry Disney+ alive with new things for people to watch.
Better articles than this have and will be written about whether Disney has over-saturated and damaged, for instance, the Marvel Cinematic Universe. But it’s certainly, at the very least, an active conversation.
Against this backdrop, Disney+ certainly hasn’t been the cash cow that Disney had hoped for, and it’s said to be over $10bn in the red on the project thus far, not counting the Fox purchase. It’s staggering sums of money, with a further $512m lost in the last reported quarter. Subscriber numbers are slightly declining too, and the cost of material for the service is rising. On the plus side, the losses are, er, lessening, but they’re still sucking resources and oxygen out of the company.
It’s Disney+ too though that’s been at the heart of the most bizarre and disheartening decision the company has made in its 100th anniversary year. I’m fascinated wondering what Walt Disney would have thought back in 1923, if someone had told him that one day that the company he founded would spend over $2bn just so that it could stop people being able to watch the films that it’d paid for, on the services it provided. I’m going out on a mild limb here, but when Disney set out his original plan for his company, the words ‘content impairment charges’ were not likely to have been anywhere near it.
It’s unclear whether Bloomberg’s recent report that Iger is feeling ‘overwhelmed’ and ‘exhausted’ at the scale of the turnaround job he’s found himself in the midst of are true. But at the very least, they seem plausible. Even as celebration plans were in place, Iger was ordering the cutting of 7000 jobs from across the Disney group. Furthermore, theme park prices are up by nearly 10%, Disney+ prices are up… there’s a lot of sharing the pain around.
Much of this reads as doom and gloom, granted, and it’s written from a position of being a Disney fan. Wish can’t come quickly enough for me. Yet it’s been an unfortunate contrast that, on the one hand 100th anniversary celebrations are in full flow, while behind closed doors heads are being scratched as to how to overcome the most difficult challenges Disney has faced in a very long time.
As any parent knows, sooner or later you get into the community centre for a party if the door’s locked. And just because Asda didn’t come through on the food, it doesn’t mean you can’t rustle something up from the Co-op down the round. There’s always a Plan B. It’s just unfortunate that, in what should be a monumental year for arguably the biggest entertainment company on Earth, it appears to have lost its bearings, much of its magic, and its party hats…
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