The changes at Walt Disney Studios has signaled a clear end to the Katzenberg Doctrine (KD) and also an increased focus on the world market, as opposed to "domestic and then foreign markets". The KD, the subject of an infamous, leaked 28-page, 11,000-word 1991 memo by then-Disney Studios Chairman Jeffrey Katzenberg, was about keeping feature film costs down, attracting talent to the Studio by letting them work on "non-Disney" fare (Touchstone, Hollywood Pictures), and engaging in the tactic of volume - releasing dozens of less expensive films a year - over a handful of budget-busting "event" live-action films.

The KD had some solid logic. Major event feature films are expensive gambles, costing scores of millions of dollars to produce even without "A" list name talent (writers, directors, but mostly actors) that separately costs tens of millions of dollars, and then there are the marketing costs, and the fact that the cinemas showing the film keep about half of the box office total.

In other words, if Disney makes and markets a film for $150 million, the film has to hit $300 million at the box office for Disney to make a profit, and big name talent will often have contract stipulations entitling them to a percentage of the gross, cutting into Disney’s profits further. Fortunately, international markets have been growing and the studio can also sell DVDs, and sell the rights to show the film on television channels (cable, satellite, and broadcast), and sell the soundtrack and/or score online and on CD, and take advantage of new distribution methods, as I’ll discuss later. Of course, big name talent will also benefit from those uses, getting a cut of those profits, too.

Because of the enormous cost of making, marketing, and distributing motion pictures, big-budget films are sometimes backed by two major studios, and one will take domestic profits and the other will take foreign profits. This is a move that minimizes the risk of loss, but also minimizes the reward of returns.

The KD, while always subverted with the event Walt Disney Feature Animation and Pixar event films, has been crumbling with hits such as the "Narnia" and "Pirates" films, both kicked off with enormously successful live-action events films that are being sequeled and have obvious merchandise and theme park adaptability and other uses throughout the Walt Disney Company. The second Pirates film has one of the most successful of all time, one of only three films to gross over a billion U.S. dollars.

The first shutdown of Hollywood Pictures was an earlier sign that the KD was on the decline. I recall reading somewhere that the label, which to the public was a clone of Touchstone, was started mainly to set up a different group of executives distinct from the Touchstone executives for ego and performance measurement/internal competition purposes. As we’ve seen, Disney and other studios often have a revolving door in the executive offices, so yesterday’s ego clashes and need for ego massages often disappear by the time today rolls around. After Katzenberg left in the mid-1990s, the Hollywood Pictures label, which had first released a film in 1990, started to release fewer and fewer films, finally stopping in 2001.

Then came the Weinstein brothers/Dimension departure. This resulted in big changes for Miramax – budgeting, staffing, and administration as it was grouped with the rest of the Buena Vista Motion Pictures Group. But it also provided a reason to bring the Hollywood Pictures label back. Dimension has been used for "genre" (horror/suspense/thriller) films. So this past year, the Hollywood Pictures label was used to release "Stay Alive" and "Primeval", and will release "The Invisible".

The end of the KD means fewer films, more event films that can hopefully be used throughout the company, and, unfortunately, has meant layoffs. It may also mean that Disney’s rival studios will have more scripts to consider, more films to distribute or at least choose from.

There was a time when the feature film industry had the "big seven" studios: Disney, Warner, Paramount, Universal, Fox, Columbia, and MGM/UA, although most ended up with more than one "label", such as Touchstone, New Line and so forth, either through acquisition or internal start-up. None of the major film studios is autonomous. Paramount had been owned by Gulf + Western before being bought by Viacom. Sony, which long ago acquired Columbia/Tri-Star, more recently (April 8, 2005) joined with Comcast and some banks to buy MGM/UA. Sony had considered selling off UA (United Artists), but with the recent departure of Tom Cruise from Viacom, UA will have new life as Sony struck a deal in late 2006 with Cruise and his business partner to have them run the company. In early 2006, MGM made deals to distribute films produced by, among others, the Weinstein Company.

Bringing together Steven Spielberg, David Geffen, and Jeffrey Katzenberg, with investment from Paul Allen of Microsoft fame, DreamWorks SKG started up in October of 1994 as a film/TV, animation, and music studio that was a credible possibility to become a major long-term player. There were even plans to build a bold new studio campus. However, those plans never came to fruition. Now, DreamWorks produces only one regular television series. DreamWorks Interactive, formed in 1995, was acquired by Electronic Arts in 2000. The music division, DreamWorks Records, was sold to Universal Music Group in October 2003, then shut down in 2005. The animation division was spun off in 2004. Finally, after the live-action studio partnered with almost every major studio other than Disney on many releases, the studio and the film library were acquired by Viacom (Paramount Pictures’ parent) in February 2006 after the deal was announced in December 2005. The live-action film library was subsequently sold to a group that includes George Soros, a deal reached March 17, 2006. This includes films released through September 17, 2005, and Paramount will maintain distribution rights, music publishing, sequels, merchandising, etc. In October 2006, Paul Allen dissolved the partnership that held his financial interest in DreamWorks Animation.

DreamWorks Animation survives as an independent entity, though its films are distributed by Viacom’s Paramount. In 2004, DreamWorks Animation acquired what it didn’t yet own of Pacific Data Images (PDI), the people involved in the computer animation productions released by DreamWorks, and abandoned traditional hand-drawn animation.

And, akin to DreamWorks Animation absorbing PDI, Disney under Bob Iger, as we all know, was able to acquire Pixar and the services of certain Pixar personnel. That announcement was made on January 24, 2006. Steve Jobs, co-founder and CEO of Apple Computer (now known as just Apple), became Disney’s largest shareholder and joined the Board of Directors.

Thus, both DreamWorks Animation and Disney eliminated some potential competition through acquisition, though Pixar was independent, while a DreamWorks Animation had major ownership of PDI. Also, Disney and DreamWorks Animation, both companies who had been known for their "traditional, hand-drawn" animation, saw the need to have an established, fully-functioning digital animation factory brought on board.