Which Disney death led to their current Dark Ages?

[DoxaRich]

So this will be a little sketchy.

Reason for doing Chick Little: Yes, showing others that you still can is a motivation for creative content. The pride in showing others "YES WE CAN" is a monster motivator.

Stock price and out sourcing: When it comes to core products, FA has been the biggest target. Yet it started with a little unknown company called Pixar. Hardly a bad decision, yet the billions Pixar has contributed to Disneys bottom line hasn't boosted the stock price to astronomical highs and the failure of Valiant didn't drag it down.

Shrek and Valiant: My point was that the decision to out source or not cannot be made on the basis of a couple fliks. Pixar is proof that it works. Vanguard - so far - is proof that it doesn't. So if you're a CEO, based on those two examples, do you look at your most recent failure or a 10 year homerun. Let's stay with the bridge for a second. Maybe everybody else is following Disney off the bridge because of their success with Pixar.

Going back to "Why do Chicken: Pixar is a perfect example of why Disney must have a strong in house FA. Do you think Jobs would be so arrogant and smug if Treasure,Atlantis & Bear had been LK and BatB ? Right now he's holding the jewells.

 

[AlanH]

Since I last posted on Friday, there has been over 13 pages of posts on this thread.

You all are nothing if not passionate about Disney. And that's great! But to put it in perspective. Remember this is all of penultimate significance. When the last trump sounds, who will care?

Well it looks like the thread I started on outsourcing has been folded into this thread. And thats OK. Really the question of content creation vs. content distribution is the larger question.

I used to work for a specialty chemical company. The business is to design and produce custom molecules for its clients. If the company decided to outsource all its research and production, it would cease to be a specialty chemical company and instead be a specialty chemical broker. If the company continued to say that it designed and produced custom molecules, there would be a huge management disconnect.

Well let's see what Disney says its business is:

From the Company Overview on its web site:

"Since its founding in 1923, The Walt Disney Company has remained faithful in its commitment to producing unparalleled entertainment experiences based on its rich legacy of quality creative content and exceptional storytelling."

From its 2004 annual report:

"The Walt Disney Company is committed to producing unparalleled entertainment experiences for the whole family based on its rich legacy of quality creative content and exceptional storytelling."

Well, I guess if one is to rely on one's "rich legacy", then there is no reason to have animation and WDI. However, I would argue that today's "creative content and exceptional storytelling" very quickly becomes tomorrow's "rich legacy". I just think things become stale very quickly if there is no new creative content.

A few words on Pixar. If the press reports are accruate and I remember them correctly, Pixar originally signed with Disney because they were looking for more than a distribution company. Pixar had never done full length features before. As I remember it, Disney was to lend their expertise in story and character development in the making of these films. Evidently that didn't happen, at least in the making of the later films. Pixar ended up having to develop that expertise inhouse. It ended up putting Pixar in the "cat bird seat". So when it became time to renew, Pixar was in the position to just look for a straight distribution contract. True some big egos were also involved.

DoxaRich, the reason the "billions Pixar has contributed to Disneys bottom line" has not boosted the stock price it that investors know that the deal will expire and Pixar can sell to the highest bidder. It would have been different if Disney owned Pixar.

Content creation is a riskier business than content distribution. True, not everything Walt did turned into gold, but over the long-run the revenue from his successes was far greater than the losses from his "failures".

Finally, remember there are no black and whites here. We really are dealing in shades of gray. No one is saying the Disney should be purely a content creation company like it was in the 30's. But remember that was what made Disney the company we "grew to love". (Matt, you're right about this!) To all but abandon content creation certainly makes Disney a different company.

Finally, I argue that it's been content creation that has differentiated Disney in the marketplace and made it successful. And this has happened post Walt.

The Lion King, The Little Mermaid, Mulan, Beauty and the Beast are just a few examples. This is content that has become part of the "rich legacy".

 

[Bstanley]

Well, I guess if one is to rely on one's "rich legacy", then there is no reason to have animation and WDI. However, I would argue that today's "creative content and exceptional storytelling" very quickly becomes tomorrow's "rich legacy". I just think things become stale very quickly if there is no new creative content.

Sounds like the death that most affected Disney then was not either of Messrs Ashman or Wells, but the death of creativity and storytelling.

 

[DancingBear]

I guess you haven't been actually reading the tread, as that was the basis for it to begin with.

Nope, Peter, you need to go back and read the OP.

 

[raidermatt]

One more point on execution... As I see it, the point of those here who disagree with the "outsourcing of core functions" is that its virtually impossible for Disney to execute that strategy in a way that would yield better results than a well executed strategy of internal creation. At least that's my point anyway...

Yes, showing others that you still can is a motivation for creative content. The pride in showing others "YES WE CAN" is a monster motivator.

This is true only when you truly care about what it is you're creating. Showing others for the sake of your pride means you do truly care about your work. Showing others so you can get more money out of them, however, is a different matter. I think that's more along the lines of what Disney, as a company, is thinking, and I don't believe that's going to consistently produce good work. If it were, we should already have been seeing it, because Disney has wanted to gain leverage in the Pixar negotiations for quite some time now. The only thing that's changed is the medium (to CGI), and Chicken Little looks to be their last shot before the deal expires.

On the stock price, again, the $'s generated from the Pixar deal have most certainly helped the stock price. Its just that there's a lot of other things that have as well. And no, Valiant hasn't brought the stock down on its own either, but certainly its had a small impact. A single film, particularly one in which Disney is merely acting as a distributor, is not going to have a huge impact in either direction. But it will have a small impact, and the cumulative effect of such decisions most certainly has an impact.

But then there's the idea that the Pixar deal was an unmitigated success. Sure, its made a great deal of money for the company. But at what cost? What if at least some of the creative minds responsible for Pixar had found the environment at Disney to be conducive to what they wanted to do? Wouldn't it have been more profitable for Disney to be the sole owner/creator of what are now the Pixar films?

Or, if you say that was impossible (which it's not, but for the sake of argument...), what if the success of the Pixar deal contributed to Disney's own decision to scrap its internal CGI unit after only one film? Has that been good for the company?

A distributor does not think like a creator (and vice-versa). A company can do both as long as it keeps the distribution hands out of the creative process. But Disney has allowed that distribution strategy to take hold in virtually every area of the company, and animation is the poster child for that effort. As a result, they make creative decisions based on their distribution business, and its backed animation into the corner in which it currently finds itself.

They don't produce animated films because they view them as a core function of their business. They produce them because they believe its fiscally responsible to attempt to produce some at this time, pending their success and how that success compares to other options. Well, that doesn't work very well in the creative process. As a consequence, internal animation has faltered to the point where we have people saying Disney SHOULD be a distributor because others can do it better. And its like this was just a given. That the environment changed in such a way that Disney was prohibited from continuing to succeed at internal content creation.

The reality is that Disney's diminished ability to create internally is a direct result of their desire to be a distributor first, and view their own internal creation as merely another option.

Again, the opportunity cost of that decision is incalculable.

 

[crusader]

I've stayed out of this thread for my own sanity, but I want to remark to this last post by Matt.

Pixar was happening no matter what. Lasseter was never going to build his animation empire as a happy little worker within the confines of an existing corporate straightjacket. That level of vision will always draw the talent.

The very fact that Disney managed to get his work anyway, deserves a tremendous amount of credit. This is no small feat - mastering an incredibly sweet deal from one heck of an artistic genius.

You argue about the long term effects to the creativity within the company in doing this. As long as Disney produces great quality entertainment, there is no long term effect. Artists are a dime a dozen. They're out there. They have the ability to do what it takes. They're not limited in a minute size and scope to the degree that only 5-10% of them are considered creative enough for this type of work.

Hollywood is so transparent, every single individual trying to make a difference within that arena understands they're only as good as their last hit. Pixar will equally fall victim to this ritual.

Look, if anything, Pixar has proven how vital distribution is. Disney needs that element to be in the forefront along with the creative content provided. They are doing both. They may not be doing enough of it internally with animation, but they are considerably active within the television and film divisions.

Sure, I'd like to see animation produced on the same level as Pixar and I'm sure this is one reason Roy now has a voice. But production is only a fraction of the equation within this virtual age. How does a producer today protect its asset from a growing sophisticated worldwide distribution network designed to instantly pirate and pawn every entertainment product prior to release within the open market?

Answer: They're "working" on it.

It's a joke. Creative value is seriously in jeopardy no matter who houses it as long as this black hole continues to evolve.

 

[DoxaRich]

The one failing I see with your logic Scoop is that Disney needs marketable charactors. Forget what TS made at the box office, it was peanuts compared to all the toys & plush sales, not to mention the draw to the parks. If "Joe" is going to be the guy making the great movies, then Disney better find some way to latch onto the charactor rights.

 

[Bstanley]

But production is only a fraction of the equation within this virtual age. How does a producer today protect its asset from a growing sophisticated worldwide distribution network designed to instantly pirate and pawn every entertainment product prior to release within the open market?

Wow, it's like Deju Vu all over again.

Rewind (anyone old enough to understand the reference?):

To the '70s - Tape Recorders will kill records - not even close.

To the '80s - VCRs will kill TV - there are literally hundreds more TV channels today than then, most with new content.

To the '80s - VCRs will kill Movies - there are literally thousands more Movie Theatres today than then, and there are three or four times as many movies produced in a year, with multiple more millions of tickets sold.

To the '90s - CD burners will kill the music industry - there are literally thousands of more artists available today through online subscription services today than there ever were before. It costs less than $0.35 to physically create a CD and it's packaging - how much of the $12 price do you think the artist gets? CD Burners haven't killed the music industry, but they are taking the money out of the Record Companies hands and putting it straight into the Recording Artists hands. And lo and behold there are more artists popping up...

Fast Forward to tomorrow - DVD burners will kill the Movie/TV industry or maybe High Speed Internet to your door will kill the Movie/TV industry- You make your guesstimate. But I'm betting that what it will do is connect me directly to Pixar - because when all is said and done I am willing to pay Pixar for making me laugh, cry and stomp my feet.

In the Visual Arts it is rapidly moving to where the producers and the consumers are virtually right next to each other - and the distributors are going to be the ones that will be losing their 'cut'.

 

[crusader]

You missed the inference. It's not about the medium. It's about the ability of the tech pirates to grab the golden egg before the goose even lays it and transmit it cheap and quick through the personal entertainment network.

 

[raidermatt]

Lasseter was never going to build his animation empire as a happy little worker within the confines of an existing corporate straightjacket.

Again, you assume that Disney had no choice but to throw a straightjacket around its artists. Given that they did, sure, there was no way somebody like Lasseter was going to stay. But it didn't have to be that way, and with some work, it doesn't have to be that way in the future.

Yes, in most cases, getting corporate resources has its consequences. But Disney was the exception, and had the creative processes in place that significantly mitigated those consequences. Had they maintained that kind of environemnt, certainly they would have had a better chance to attracting and retaining the best talent.

As long as Disney produces great quality entertainment, there is no long term effect.

Isn't this what I've said? If Disney truly sought to produce the best, rather than simply looking to buy the best, they would be fine. But they aren't consistently producing great quality entertainment, especially when it comes to feature animation.

If artists capable of producing such work are truly a dime a dozen (which maybe the most ridiculous notion I've ever heard on this board... and no, that's not hyperbole), then I guess Disney is only willing to pay a nickel for that dozen, because they haven't kept up. Either that or they have simply hamstrung their creative talent to the point where they can't produce their best work.

And yes, they do need a distribution arm. I NEVER said they didn't. But they have let it take the focus away from the creative processes within the company. And with regard to television and film, really, they are primarily a distributor in these areas as well.

Roy has a voice? Come on. Somebody who claims to have the inside understanding of Hollywood and corporate politics that you do should know full well that Roy is purely window dressing at this point. He had primarily been a figurehead for years prior to his departure, and now he isn't even that.

Further, as was pointed out by many of the SaveDisney detractors, Roy's track record in the area of creative vision isn't exactly stellar. Roy did a lot for the company in that he is the single person most responsible for it remaining intact 20 years ago, but his creative talents aren't exactly in great demand within the animation industry.

Bstanley is 100% on with his assessment of the "Chicken Little" scenario with regard to creative piracy, right down to the point that it is the DISTRIBUTORS that have the greatest risk in this scenario. All the more reason to question the move from creation to distribution.

Does it really matter if the great animated feature was created by Disney, Pixar, Dreamworks, or some guy named Joe?

From the personal pov of the consumers, it doesn't matter. When I watch Toy Story or Monsters, I don't care that Disney didn't make it.

But aren't we discussing how Disney can achieve the greatest success in that environment? To Disney, it most certainly matters who creates the product. Even as a distributor that matters, but instead of trying to do it themselves, they try to find the companies who can, which I'm not sure is all that much easier, and certainly has lower reward potential. Of course that also means less risk. But the advantage that Disney has over most other creators is that the risk of creating an individual work is a small part of their overall business, whereas for a company like Pixar, its everything.

 

[crusader]

Matt, I don't know of any founder who achieves that stature within the ranks of an existing company.

The only thing a company has to offer is money, name recognition, power, and a percentage of ownership to hold onto an employee.

You keep assuming Disney could have held on to Lasseter. Founders don't use somebody else's umbrella to stand under - hence Pixar was born. Give Lasseter the benefit of doubt here. He was never for sale. He deserves at least that much.

And really, that was my only point to you to begin with. I got what you said in your previous posts.

But now that you've jumped - I'd like to explore this:

And with regard to television and film, really, they are primarily a distributor in these areas as well.

Really. Please elaborate.

Roy has a voice? Come on. Somebody who claims to have the inside understanding of Hollywood and corporate politics that you do should know full well that Roy is purely window dressing at this point. He had primarily been a figurehead for years prior to his departure, and now he isn't even that.

This isn't about Roy's lack of creative talent. Anybody who garners that level of support company and consumer wide does indeed have a voice that extends way beyond window dressing. The powers that be were very wise to acknowledge this and position him accordingly. I personally believe his focus will be on animation.

If artists capable of producing such work are truly a dime a dozen (which maybe the most ridiculous notion I've ever heard on this board... and no, that's not hyperbole), then I guess Disney is only willing to pay a nickel for that dozen, because they haven't kept up. Either that or they have simply hamstrung their creative talent to the point where they can't produce their best work.

I'll assume you're talking in-house. I don't know if Disney notoriously paid it's animators less than the going rate prior to the layoffs or even now. Do you?

Yeah, they haven't kept up - Pixar did all the heavy lifting and handed over the product. That doesn't mean the talent isn't out there ready for hire whenever Disney wants it. Otherwise, explain to me how Dreamworks managed to make all that money so quickly?

 

[raidermatt]

Neither you nor I know what Lasseter would have done if he felt the environment at Disney would have been conducive to what he wanted to do. What we do know is that the environment wasn't anywhere near what he wanted, so we'll never find out.

But its not just Lasseter. The environment has become such that great work is the exception rather than the rule. They either aren't able to attract the talent, or they don't let them fulfill their potential.

Pixar does.

Anybody who garners that level of support company and consumer wide does indeed have a voice that extends way beyond window dressing.

All that support doesn't mean a thing in this context. He doesn't have Disney's management support, which is all that matters. In the end, the consumers don't really care either. Yeah, ask them if they like Roy and they'll say "Sure!". But the vast majority don't base any purchase decisions on that, and they certainly weren't bombarding Disney with "We want Roy back" letters.

The reconcilliation was merely a move made in the best interests of both parties. Roy saves face without spending anymore money and he gets an office back. Iger and company got the lawsuit dropped and got some good publicity. Nothing more.

I'll assume you're talking in-house. I don't know if Disney notoriously paid it's animators less than the going rate prior to the layoffs or even now. Do you?

The comment was not a reference to their pay persay, but rather a response to your dime-a-dozen comment. I assumed the dime was metaphorical, and meant the nickel to be the same. Point being, if artists capable of producing great entertainment are easy to come by, Disney is STILL not able to get them, or they don't allow them to thrive.

If the talent is there for the taking whenever Disney wants it, why haven't they already taken it? Why have they let themselves falter, further increasing Pixar's (and other's) leverage, not to mention suppressing their own bottom line? Clearly there is more to it than just "flicking a switch".

How did Dreamworks find talent? That's a good question. Again, if its as simple as some suits deciding they want "great entertainment", certainly the suits at Disney could have done it just as well as the suits at Dreamworks. If we are to assume Dreamworks HAS found more talent than Disney, isn't that an indictment of Disney's process? I'm not about to proclaim Dreamworks as the model for content creation, but you're right that they've had some success. I don't get, however, how their success in anyway proves the point that its easy. Unless we just say that in this area, easy is still too much for Disney to handle.

 

[Bstanley]

So the concern is that somone is going to extract a bootleg of 'Cars' from the Pixar network before it formally releases? Or perhaps that in the future someone diverts the data stream that goes between Pixar and one of the Digital Theatres that is screening their latest work for the critics?

Well - just speaking hypothetically - if I was looking to snoop data I would be looking to snoop Bank of America data, not some Cartoon Movie's Mpeg stream.

The data will need to be protected - and will be. And the techniques will need to adapt regularly - as they do today.

 

[DoxaRich]

Stanley, I'm not certain, but it sounds like you're taking DVD pirating very lightly.

---"The MPA estimates that its members lose over $896 million in potential revenue each year in the Asia-Pacific region due to copyright infringement of intellectual property. Last year, MPA work in the region resulted in the seizure of 49 million illegal optical discs, the MPA says."---

That's just from the Asia-Pacific region.

I don't recall which Star Wars movie it was - it was released maybe 3 years ago - but my DS in Boston had a bootleg copy of it about a week or so before it was ever released.

You may want to snoop for Bank One data, but I think the pirates know where the gold is.

 

[crusader]

The data will need to be protected - and will be. And the techniques will need to adapt regularly - as they do today.

This problem extends way beyond the DVD. The home entertainment media landscape is converging at a very rapid pace. If you're assuming the FCC will legislate this effectively and efficiently don't hold your breath. They've been whitewashing it for years. Here's a glimpse of Disney's concerns back in 2003.

http://www.uspto.gov/web/offices/dcom/olia/teachcomments/waltdisney.pdf

If the talent is there for the taking whenever Disney wants it, why haven't they already taken it?

Simple. Because they haven't had to.

If we are to assume Dreamworks HAS found more talent than Disney, isn't that an indictment of Disney's process?

Indictment of the process? How do you figure. Disney made more money than Dreamworks without having to pay 100% of the production costs. And Dreamworks struck it big in the market with an extremely short tenured investment compared to Pixar. That means the tech and the talent are available for hire.

 

[raidermatt]

Sorry, I'm really not following you on this. Disney has been producing animated bombs with the occasional mild success. Yet they haven't brought in talent and given them a proper environment simply because they haven't had to? They haven't had a need to make their own animated films successful?

I don't think the ending of the Pixar deal is the only reason successful internally created films are good for them. But that can't be what you are saying, so obviously I'm not getting it.

Indictment of the process? How do you figure. Disney made more money than Dreamworks without having to pay 100% of the production costs.

Losing me again. To keep this apples to apples we have to look at what generates more profits... Disney releasing a $300 million grossing Pixar film, or Dreamworks releasing its own $300 million grossing film. Even under the current deal, I don't think Disney wins out in that scenario. On top of that, Disney has had to deal with contract bickering over ownership rights, marketing, labelling, and even what constitutes a film under the agreement.

Then, when the contract ends, they either will not see anything from Pixar's future works, or they will most certainly see a smaller cut of it.

Disney itself knows that its most profitable for them to produce their own successful movies and then distribute them. That's why they keep trying it. The issue has been the success part of the equation.

Which brings us back to an earlier point in this discussion. If the best work is done by other companies, why shouldn't Disney purchase it instead of trying to do it themselves? The answer to that is that they should purchase it instead of producing their own subpar content. But the issue with that is WHY is the best (and now, even 2nd and 3rd best) work done elsewhere? You're saying its just because Disney hasn't had a need to produce the best work, which I honestly find baffling. There is no question that Disney would be better off if instead of Atlantis, Treasure Planet and Home on the Range, they had produced films on a par with what Pixar and even Dreamworks has done.

I can't see how you can say they had not need to do that.

And Dreamworks struck it big in the market with an extremely short tenured investment compared to Pixar. That means the tech and the talent are available for hire.

No, there are a variety of reasons why that could be. Certainly it was available for Dreamworks, but you still have to know how to find it AND how to make it work. And as Disney's internal films, and even Vanguard, have shown, not everybody knows how to do that.

 

[crusader]

You're saying its just because Disney hasn't had a need to produce the best work, which I honestly find baffling.

That's a mighty big leap you just took here. Disney needs to always deliver the best. That does not mean they need to be the only production house out there competing for quality. Of course, if Disney chooses not to produce animation - then they should make darn sure they own it outright. They do.

And that's my point. It became a choice because either way, they prevailed. They agreed not to compete against Pixar. They agreed to utilize every facet of their business to promote Pixar. They agreed to partner with the full understanding that Pixar would deliver as promised and in exchange, Pixar agreed to hand over every single work of art.

What you're saying is that they should have produced equitable results during the interim and in your opinion, Brother Bear, Mulan, Pocahontas, Lilo and Stitch, and the like are all "sub par" because they failed to reap the box office returns comparable to the golden era of the Lion King. Aren't you then, indirectly falling victim to the Hollywood virus - measuring success in terms of the lastest hit.

If Disney really did fall short, then Chicken Little should bomb. Let's be honest. There is no way, under your analogy it could possibly succeed.

And let's not forget what a leader really is. A leader holds the majority. A company making a product they don't own and can't sell is not.

 

[raidermatt]

It became a choice because either way, they prevailed. They agreed not to compete against Pixar. They agreed to utilize every facet of their business to promote Pixar. They agreed to partner with the full understanding that Pixar would deliver as promised and in exchange, Pixar agreed to hand over every single work of art.

No, it was not an either/or choice. They partnered with Pixar, AND they continued to produce films internally, including one CGI film. The only "competition" factor was that they don't release the films in the same timeframe, which is as close to common sense as Hollywood gets.

What you're saying is that they should have produced equitable results during the interim and in your opinion, Brother Bear, Mulan, Pocahontas, Lilo and Stitch, and the like are all "sub par" because they failed to reap the box office returns comparable to the golden era of the Lion King. Aren't you then, indirectly falling victim to the Hollywood virus - measuring success in terms of the lastest hit.

Talk about leaps.

No, I am not measuring success in terms of the latest hit, and never said anything remotely close to that. I'm measuring it in terms of consistent performance.

If Disney really did fall short, then Chicken Little should bomb. Let's be honest. There is no way, under your analogy it could possibly succeed.

There's no analogy.

And chances are, yes it will fall short. Not based on any analogy, but based on their past peformance, and the fact that the only real change we know that they've made is in the animation method. (Unless we count closing the studio that produced the three most recent titles in your list.)

However, just as there are no assurances that the next Pixar film will be a huge success, or that the next Vanguard film will be a colossal failure, NOBODY can say with any certainly how any individual film will perform. All we can do is look at the track record of the talent behind the films. And based on that, I don't see how one could say it is more likely CL will be huge than it will bomb.

However, you have said that the reason Disney hasn't hired the best talent is that they haven't had the need. I still can't reconcile that comment with the fact that they have been producing films all this time. Why didn't they have a need to hire the top top talent?

And let's not forget what a leader really is. A leader holds the majority. A company making a product they don't own and can't sell is not.

Now THAT is a perfect example of falling victim to the Hollywood "short term" virus.

 

[crusader]

No, I am not measuring success in terms of the latest hit, and never said anything remotely close to that. I'm measuring it in terms of consistent performance.

You're doing a lot more than that. You're trying to mold Disney to a company responsible for 5 feature films in 20 years, the best of which were directed by the critically acclaimed Mr. John Lasseter himself.

Consistency is the last thing anybody needs from Hollywood.

 

[raidermatt]

No, I'm not. There's a variety of reasons why Pixar ends up being mentioned so often in these discussions, not the least of which is they've made 6 extremely successful animated films in a row. While it would be ridiculous to try to "mold" Disney into another company like Pixar, that doesn't mean there aren't some things Disney could "re-learn" from Pixar about how to foster an environment conducive to successful content creation. (Unless of course their own content creation is just another option for their distribution are to choose from...)

Consistency is the last thing anybody needs from Hollywood.

They most certainly need consistent success. Who doesn't?