The Walt Disney Company’s Growth Engines: The Studios

This is the first part in a three part series examining the parts of The Walt Disney Company that Bob Iger has said will be the source of growth moving forward. Today, we will take a look at the Studios.

It may be a bit jarring to think of the studios as a growth engine considering that they are at a virtual standstill due to the WGA at SAG-AFTRA strikes. While the impact to television is more immediate, there will still be delays to the theatrical business as has already been seen with the pulling of Deadpool 3 from the release schedule. But the challenges of the studio began before the strikes and will not go away when both unions and the studios reach their inevitable agreement. In the recent earnings call, Bob Iger has admitted that there needs to be a creative retrenchment in order to ensure the movies they release are good. Of course, that is easier said than done.

While production is paused, one hopes that the studios under the Disney umbrella are examining how they make films and how to rejuvenate their creativity. Iger has stated that they will be looking at how they make films to try and bring the costs down — which is perhaps the last thing the WGA and SAG-AFTRA want to hear right now. He also mentioned that he is focused on this effort as well as retrenching himself in the creative decision making process. It will be quite some time, especially given the labor situation, before we know if Iger’s input will help the studios return to the heights of his first tenure.

And while Disney is focused on making their films for less money, they will also be making fewer of them. With the recent focus on Disney+, all of Disney’s creative engines were making a lot of stuff. Many believe that the studios spread themselves too thin, which impacted the quality of their releases. Now that Disney is being more selective in what they make, it will be interesting to see if the consensus on quality changes.  

Disney also stated that they will be using every window and platform at their disposal. This is a change from the pressures some on Wall Street were pushing on Disney to put everything on streaming. This makes sense. Why not have multiple revenue streams for one product? It is hard to tell if Disney’s pivot to direct-to-streaming was more influenced by Wall Street or the realities of the pandemic, but it is now clear that the strategy doesn’t work.

Can Disney retrain audiences to go back to the theater instead of waiting a few weeks for streaming? One may expect the difference between release dates will grow. This is a bit ironic as Iger was influential in reducing the time between theatrical and home video windows. As of now, it appears that three months between theatrical release and Disney+ debut is the norm. It will be interesting to see if that changes moving forward (keep an eye on when Elemental is announced as coming to Disney+).

The other point Iger made about the studios is that their impact extends beyond their own output. The studios create worlds that come alive at Disney Parks around the world. If Iger truly believes that one of the reasons the studios is a growth driver for Disney is that they will create content for the park, one must wonder if that will impact what kinds of films they make. In the 1980s and 90s, certain content was created because it was “toyetic.” This meant that it would drive toy sales by the nature of its programming. It will be interesting to see if content is greenlit because it is “parketic,” meaning it features immersive worlds that could come alive at a Disney Park.

Whatever strategy Disney ends up taking, in the end, let’s hope that they “just make it good.” And while this new strategy still has some time before we can see its results, we can also hope that upcoming releases like Wish, The Marvels, and A Haunting in Venice are good as well.

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