What Has Happened With Disney Entertainment?
Executives at The Walt Disney Company proudly proclaim theirs as a storytelling business, one where they’re the global leaders.
I would never argue against that statement, but recent events have demonstrated the mercurial nature of storytelling.
Disney has suffered several box office disappointments, and some of its highest-profile Disney+ shows haven’t excelled either.
Even loyal Disney fans are wondering about the problem here. What has happened with Disney entertainment?
Disney’s Recent Struggles
Earlier this year, Disney released Ant-Man and The Wasp: Quantumania.
Let’s be blunt about the fact that it’s in the discussion for the worst Marvel movie ever.
I wouldn’t state that Quantumania is the worst Marvel story, though. That honor belongs to Secret Invasion, which I recently eviscerated here.
Disney somehow spent $212 million on a six-episode series that was terrible.
Meanwhile, Indiana Jones and the Dial of Destiny is another high-profile miss.
Indy 5’s current box office total is roughly equal to what Disney spent on the film. That’s bad for reasons we’ll discuss in the next section.
This past weekend, Haunted Mansion debuted in theaters, and nobody noticed because it wasn’t Barbenheimer.
The ride based on a beloved Disney attraction picked a terrible release date. Then, its marketing campaign faltered due to the Hollywood strikes.
The stars of the film couldn’t promote it past a certain point. I quite liked the way Disney planned for this, but it clearly wasn’t enough.
To a larger point, Haunted Mansion’s Cinemascore of B+ and 41 percent Rotten Tomatoes score indicate it’s a mediocre movie. (Sorry, park fans!)
In short, what looked like an ideal 2023 theatrical lineup for Disney has turned into a glass-half-full, glass-half-empty debate.
Why has Disney, the master of storytelling, struggled so much? Let’s talk it through, starting with a reminder about Hollywood.
Disney Was Never Perfect
Are you familiar with Mars Needs Moms, Fantasia 2000, or John Carter?
I mention these three titles as examples of big-budget Disney theatrical releases that bombed at the box office.
As a general rule, tentpole titles must earn at least a factor of three more in the global box office than their production budget.
Otherwise, they’ll lose money during the theatrical release phase.
Some exceptions exist, including one we’ll discuss, but that’s a fair assessment overall.
In 2011, Mars Needs Moms grossed an atrocious $39.2 million against a $150 million budget. Disney effectively gave up on that one and left it to die.
Studios take this approach for known clunkers, as the potential tax benefits ultimately justify the decision.
With John Carter, Disney marketed the film non-stop, and audiences still didn’t care.
The Taylor Kitsch action flick earned $284.1 million against a $263 million budget.
Even worse, most of that box office came from international receipts.
Studios earn substantially less revenue due to international tariffs and myriad other factors.
For this reason, I’m not mentioning a 2023 Disney release, The Little Mermaid, as struggling.
More than half of that film’s $565 million has come from the domestic box office.
Disney claims a bigger cut from its North American ticket sales, often 60 percent or more.
That’s 90 percent of the film’s $200 million production budget right there. The international revenue of $265+ million puts it over the top.
Now that you can tell the difference, you’ll understand why John Carter’s $73 million domestically sunk such an expensive film.
In short, Disney has never been perfect. What we’re witnessing right now is a strange conflagration of events. Let’s talk through each one.
The Content Glut
When Disney+ debuted, Bob Iger established a plan for financing his company’s conversion to a digital service.
Iger knew that Disney+ would serve as a loss leader while it grew customers.
In countless conversations, Disney executives reiterated this point. Wall Street never blinked at the thought.
Business experts understand the reality that you must spend money to make money.
Investors also expected Disney’s Linear Networks to counterbalance any losses.
Cord-cutting had already become enough of a factor that Iger wanted Disney to transition into a business with Direct-to-Consumer (i.e., streaming) services.
Since many potential subscribers already used Netflix, Iger recognized that he must entice them to add Disney+.
So, Disney announced several super-expensive Pixar, Marvel, and Star Wars titles for its new service.
Then, a Wall Street term known as a black swan occurred.
A popular definition for a black swan is “an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.”
For Disney, that was the pandemic, which systematically decimated the company.
New CEO Bob Chapek recognized that the pandemic accelerated cord-cutting behavior. So, he greenlit as much Disney+ and Hulu content as he possibly could.
Eventually, the cost of these projects expanded so much that even though Disney+ had claimed exponential subscriber growth, it was losing too much money.
Meanwhile, Disney lowered its storytelling standards for many projects.
Chapek felt the need to feed the content machine, even if the stories weren’t on the level of typical Disney fare.
This miscalculation eventually cost Chapek his job. But that’s only part of the story…
The Pandemic Production Setbacks
Some of my dearest friends have worked in Hollywood for decades now.
Since they share their lives with me, I’ve heard all the horror stories about filming debacles.
A production team often knows within 72 hours that it’s working on a disaster project.
Since the producers have already spent a lot of money, they keep filming anyway. It’s a blueprint example of throwing good money after bad.
Imagine that happening at the start of the first pandemic in a century.
You can easily envision how this scenario played out. Someone received a greenlight for a project that nobody would have made a decade ago.
With so many streaming companies in service, everyone lowered their standards.
That’s especially true for Disney, THE best storytelling company ever.
On top of this aspect, principal photography during the pandemic was unlike anything we’ve ever seen before.
In many instances, directors reduced the number of people on the set to skeleton crews as a safety measure.
These steps, while completely necessary, caused ripple effects.
Production slowed as faster filming simply wasn’t a possibility. Meanwhile, longtime performers adjusted to different sets with less staffing.
A 90-day shoot would turn into a 150-day shoot, which comes with multiple negatives.
Morale declines as people feel detached from the world. Also, the delays create a sense of hopelessness that filming will never end.
That lack of enthusiasm for some projects has seeped into the content, some of which wasn’t up to snuff to start.
Turmoil Behind the Scenes
Disney productions proved especially challenging during the pandemic.
Iger ditched his job and promoted himself to Executive Chairman three weeks before society shut down in 2020.
Chapek, the new boss, had virtually no experience with content creation. He worked on the sales side of Disney, which differentiated him from Iger, a creative.
A notorious bean counter, Chapek took power away from creatives and placed all Disney media businesses under the domain of Kareem Daniel.
While I’ve yet to hear a single negative word spoken about Daniel, he found himself in charge of ALL Disney storytelling…and virtually overnight.
Longtime Disney executives bristled that they were reporting to someone with less experience and industry knowledge than them.
Internal schisms formed, and Chapek’s unforced errors with high-profile talent like Scarlett Johansson didn’t help any.
One noteworthy event occurred in June 2022. Chapek fired Peter Rice.
At the time, Rice held the *ahem* somewhat important title of Chairman of Disney General Entertainment Content.
While Dana Walden and Alan Bergman have performed admirably as his replacements, that move caused needless chaos at Disney.
We’re still feeling some of the ripple effects now, as film and television disruptions tend to take at least a year to show onscreen.
In November, Iger returned and promptly eliminated Daniel’s position. The CEO also reset the content creation status quo Chapek had disrupted.
Then, an activist investor capitalized on the turmoil. He wanted a seat at the table and only agreed to drop his bid for Disney’s Board of Directors if Disney performed layoffs.
Hundreds of Disney executives lost their job during the first half of the year.
Some of them were high-profile employees like Victoria Alonso, a former superstar at Marvel. All these mistakes and talent losses added up.
The Hidden Pandemic Successes
Notably, critics must dismiss various success stories in arguing that Disney is slumping.
Specifically, Encanto has proven one of Disney’s most popular titles since Moana or maybe even Frozen.
This film and Hocus Pocus 2 both earned a place on the most streamed programs of 2022.
Soul, a pandemic release that went straight to Disney+, earned an Academy Award for Best Animated Feature, as did Encanto.
Disney also won Best Picture, arguably for the first time ever, with Nomadland.
Then, we have financial triumphs like Black Panther: Wakanda Forever, Dr. Strange in the Multiverse of Madness, Thor: Love & Thunder, Guardians of the Galaxy Vol. 3, and…Avatar: The Way of Water.
Disney has earned the most box office for seven consecutive years and appears likely to do so again this year. There’s a bit more intrigue than usual, though.
Still, Disney’s “struggles” would count as unqualified financial success for another Hollywood studio. But yes, I believe the company’s storytelling has slumped.
Since Iger just renewed his contract through 2026, I expect stability, which should help Disney recover from all its pandemic-related setbacks.
Still, Disney executives should be asking themselves the hard questions…like why Haunted Mansion didn’t come out in October.
Fate has seemed against Disney since the start of 2020. Let’s not overlook how many unforced errors Disney leadership has made, though.
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