How did Disney get into this mess?

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As Disney replaces its new CEO with its old CEO, a few thoughts on a difficult few years for the company, and a look at what’s gone wrong.


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With an impeccable sense of timing, it was back in February 2020 that Bob Iger stepped down as the CEO of The Walt Disney Company. Under his near-15-year tenure, the company had comfortably trounced its rivals, become the biggest studio in Hollywood, acquired Pixar, Lucasfilm, Marvel and Fox, and had just launched its Disney+ streaming service.

It looked like the foundation was in place for a bright, bright future for the company. Iger, meanwhile, could retreat to his shed and enjoy his retirement, presumably making model animals, and sitting in the corner and singing about gold.

Then, of course, the pandemic hit. Oh, you know the one. It transformed the fortunes of businesses globally.

No matter: Disney had jumped into streaming just in time it seemed, even if the first year of Disney+ found it – after the initial launch – relatively sparse when it came to new things to watch. Still, lots of us were still paying into the Disney coffers by direct debit on a monthly basis. Its Christmas party could go on.

Bob Chapek, a long time colleague of Iger, had been hand-picked by him to take over the company, and obviously faced immediate challenges. The theme park business still hasn’t fully recovered – not helped by the latest round of off-putting price hikes (coming to those) – and the slate of theatrical releases that the studio had lined up would end up in a queue of films waiting for screen space post-pandemic.

We’re obviously not privy to the internal politics of Disney, save for reading the same trade reports about internal reorganistions that didn’t go well. But as customers, from the outside looking in, there are clear problems that Disney finds itself facing, many of its own making. This very week, Chapek has been defenestrated, and Iger is back. Chapek’s sudden departure was one shock. The return of Iger? Nobody saw that coming (and Iger himself had ruled it out previously).

So what’s gone wrong? And why does Disney need the last guy back? Well, a few thoughts…

Marvel logo

The Marvel golden goose

Let’s start here. The box office returns for this year’s slate of Marvel pictures are high, but notably down both on expectations, and their predecessors. Even the newly-released Black Panther: Wakanda Forever – in spite of taking an awful lot of cash – is tracking below the numbers of the first movie.

These films are still generating the kind of cash that most other studios would at least sacrifice the fingers of some minions for. Yet they’re not doing the numbers that Marvel movies were come 2019, the peak – financially, arguably creatively – of the cinematic franchise. Worse than that, the movies – again, financially – appear to be in decline.

This is a problem. Disney has leant very, very heavily into the Marvel Cinematic Universe to underpin not just its theatrical strategy but also its streaming service. It needs around 20-30 weeks of Marvel small screen material a year on its current course, as well as three feature films. Something, somewhere has to give. Arguably, it’s already started to.

Heard the phrase Marvel fatigue? If not, you may soon be about to. That interest in the cinematic universe is still there, and there’s still the kind of fanbase that no other studio can boast of one of its franchises. But even the most ardent fans are beginning to feel less invested than they were.

The answer? Well, at the moment, it appears to be making more and more Marvel productions. Cutting the number by a third though may at least make them feel a bit more special. Carrying on regardless, as appears to be the current strategy, feels like it may just grow the problem rather than shrink it. But can Disney afford to cut back on Marvel in the current climate? Nope. Will it? More than likely not.

Black Widow

Black Widow

The Scarlett Johansson moment

One of the first signs that Disney was under new management was the very public fallout between Scarlett Johansson and the studio, over monies the former felt she was entitled to from the latter. This related to the back end deal – conventional in movie star contracts – that Johansson felt wasn’t being honoured when Disney scrapped the theatrical release of the Black Widow film.

Now Disney may very well have had fallings out with star talent over the last 15 to 20 years, and everybody may hate each other behind closed doors. Thing is, I have no idea. Under Bob Iger, whatever conflicts appeared to be resolved in house. The idea that Disney, of all studios, would have a public falling out with a major movie  star was alien. Yet for whatever reason, Bob Chapek let the situation get to a point where court papers were drawn up and the matter was brought out into a public theatre.

This felt unimaginable under the previous regime. And it brought forth the idea that Disney’s relationship with talent wasn’t quite as assured as it once looked. A small thing, but very much a new chink in the armour.

Popcorn at the cinema

Stuttering theatrical

I don’t, as a mere watcher of films, know if Disney really likes cinemas. I know its filmmakers do, I know its PR team do, but whereas the studio previously had the big screen as the cornerstone of its film strategy, it feels relegated.

Part of this was by necessity. Faced with cinemas not being open, Disney started launching some of its blockbusters – such as Mulan, Black Widow, most of Pixar’s output and Cruella – on its streaming service. It toyed with various ways to do this, most hilariously charging paying subscribers a premium to watch certain films early. But it now seems to have settled on a four week cinema window for all but its Marvel output, and everything else – even interesting projects such as Prey – is shuffled in the direction of Disney+. The beast, after all, needs feeding with Content (TM).

The films that do end up in cinemas? Well, outside of Marvel, are they being given a fair push? Disney’s new animated movie, Strange World, is set for Disney+ at Christmas, yet there’s barely been sign of the blanket promotion we’re used to see – and saw with Encanto – for its theatrical release. One regular cinemagoer for instance told me that the first trailer he saw for Strange World was when he sat in his local Odeon to watch, well, Strange World.

On the flip side of that, I saw lots of promotion for West Side Story, and that was Disney-backed, yet barely made a scratch at the box office. It’s not a very even line, and certainty has long gone from theatrical releases.

But still, I think there has to be firm commitment. You’re either on the side of a big cinema release or you’re not. Half-measures? Well, I can’t be the only one who looks at a Marvel film now and thinks I might be best waiting two or three months for the Disney+ release.

Disney has a robust slate of films heading to cinemas in 2023 though, and the intention seems there. It’s not giving up.

I do wonder though if the studio had the same commitment to theatrical as Paramount clearly did with Top Gun: Maverick – and was willing to keep its films on the big screen for longer – might it be enjoying just a little more success there? That’s not entirely fair, true: few of us saw the success of Top Gun: Maverick coming. But still, had it been a Disney film, it’d likely have been on streaming in two months.

Disney has tried an assortment of approaches to releasing films over the last few years. I don’t yet think it’s found an answer it’s happy with. Others, however, have.

Disney Plus

Home entertainment

Finally – cracks knuckles – the treatment of films on home entertainment formats and services. The big flag to me that Disney doesn’t care about films in the way it once did.

When it acquired 21st Century Fox, and in turn the entire catalogue of 20th Century Fox films, Disney became custodians of one of the largest film catalogues in Hollywood.

You would never know it.

Take away the big franchise movies and the popular catalogue titles, that soon made their way to Disney+ (how is Con Air not in 4K? Really. Tsk). Scratch just one level below that, and things start to dry up. Films are either not there, not looking their best, or only available on long-deleted DVDs, or sparse physical media releases.

This post from the ever-excellent The Digital Bits sums things up nicely: Disney has allowed its home entertainment catalogue side to go stale.  There are films that, at any other studio, would have been remastered in 4K and at least put on streaming, perhaps even disc. Not at Disney. There are movies that have – as studios have partially re-embraced disc releases – been repackaged with fresh extra features. Not at Disney. There are curated catalogues of films being made available on streaming platforms. Not at Disney.

Disney has the stewardship of so much film history, something that it used to be one of the finest guardians of (and is, on its animated side). But rather than embrace that, it’s significantly reduced its physical media output (I can only think of one catalogue 4K disc this year for instance, Michael Mann’s Heat), and put precious few of its acquired films on its streaming service.

In the meantime, it’s the performance of the Disney+ streaming service in particular that’s accelerated Bob Chapek’s exist from the company. Its subscriber numbers are huge, and heading to hit targets there, but the money Disney is having to spend to get to that position is staggering. So much so that Disney’s losses for its Disney+ division doubled over the last three months, to $1.5bn. In three months.

It’s having to spend big to keep the new shows coming, it’s having to constantly promote Disney+, but as Netflix has also found this year, streaming is a business with a ceiling. It can’t grow forever, it will always need lots of money to keep it fed. In the race to follow the Netflix model, it’s committed to staggering levels of investment, that have drawn resources from elsewhere in the company. Just as streaming growth looks like it’s peaking.

Netflix has addressed this maturing of streaming by re-embracing cinemas. It remains to be seen what the returning Bob Iger will do. But do something he must – the success of Andor can’t mask the problems here. Disney+ was his idea after all…


Finally, we find ourselves – not just in the UK, but further afield as well – in a period of time where money feels incredibly tight, and disposable income is decreasing. Disney, against this backdrop, has put up theme park prices twice in 12 months. The price of Disney+ is going up.

The room is not being read well.

Going forward

For many years, Disney was heavily in tune with consumers, and was ahead of the market. Now? Whilst it’s still massive, and it’s far from doom and gloom, it all looks a little less bulletproof.

Will a change of CEO turn things around? Possibly. But also, Iger himself knows that he’s a short term fix. The plan is for him to come back for two years, and then the search for a replacement has to get underway all over again.

In the meantime, Bob Chapek gets to count a reported eight figure settlement following his sudden dismissal – I am happy to apply for the CEO job, fail, and be paid handsomely – and the price of a Coke at Disneyland likely gets nudged up again…

Key images: BigStock

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