Best of Times or Worst of Times for Disney?

Shaman

Well-Known Member
Original Poster
forbes.com said:
This has been a turbulent month for The Walt Disney Co. Its former directors are on trial in Delaware for neglect and mismanagement relating to the costly hiring and firing of Michael Ovitz. Its erstwhile, now estranged partner Pixar Animation Studios has scored another big hit with The Incredibles. Meanwhile, rival DreamWorks Animation has completed an IPO and has launched the DVD of its mega-hit Shrek 2. Disney CEO Michael Eisner is likely to take the witness stand this week, possibly through and including Nov. 18, the day the company is expected to announce its earnings. For all its headaches, Disney shares have been quietly outperforming those of key rivals Time Warner, Sony, and Viacom, over the past year and have narrowly outpaced the market averages as well. That trend should continue if Disney matches or meets Wall Street's per-share earnings expectations of 18 cents. Disney had no comment on the trial.


So the question is, are we seeing Disney turning the corner and heading in the right direction, or are they headed down to some darker days? In other words, are these the best of times, or the worst? Will Disney finally do away with their questionable corporate decisions...or will we see more of the same. Then again, if shares are outpacing the market average...is there anything wrong?

You be the judge...
 

ClemsonTigger

Naturally Grumpy
Of course it varies depending on your measurement system.

Yes, the stock has been doing well of late, so shareholders should be pleased.

For us Disneyphiles, there are two park bosses that seem to understand what makes Disney Disney. Eisner is on his way out (can go either way after that), but a fresh energy potential is there. The parks are getting a major overhaul after a decade of neglect....all that excites me.

Then there is the dismantling of the animators and reductions to imagineers and constant adding of bean counters....still leaves me uncertain.

I believe we've turned the corner, but there is still a winding slippery road to pass.
 

prberk

Well-Known Member
ClemsonTigger said:
Then there is the dismantling of the animators and reductions to imagineers and constant adding of bean counters....still leaves me uncertain.

I believe we've turned the corner, but there is still a winding slippery road to pass.

This is why that question is so hard to answer, for me. I see the pressure from SaveDisney and its paricipant pension funds (and the public awareness that it brought to bear) as good instruments to help ensure that Disney refocus on its core values; BUT I also see the over-abundance of MBAs and corporate "branding"/"product placement" and other non-creative boardroom decisions as still worrisome.

Paul
 

speck76

Well-Known Member
prberk said:
This is why that question is so hard to answer, for me. I see the pressure from SaveDisney and its paricipant pension funds (and the public awareness that it brought to bear) as good instruments to help ensure that Disney refocus on its core values; BUT I also see the over-abundance of MBAs and corporate "branding"/"product placement" and other non-creative boardroom decisions as still worrisome.

Paul


Please explain why you feel branding and product placement is bad for WDC.

thanks!
 

prberk

Well-Known Member
speck76 said:
Please explain why you feel branding and product placement is bad for WDC.

thanks!

Thanks for asking. It is not the idea and usefulness of "brand management" as a general business concept that I regret in the WDC. It is its over-abundant use for decision-making; and in some cases its inappropriateness.

First, its over-use:

Business is just that, "busy-ness." In itself, it has no value. Business management tools, such as "brand management" and "strategic planning," only have true usefulness when they relate to real products or creative content.

Disney has always been good at marketing their products. But the products were valuable and worth marketing, first. That is why Roy and Walt made a good team. There has to be a creative, useful, or meaningful product before even for the best marketing can create and sustain lasting value.

I feel that Disney lately has tipped the scale too far, and let the strategic planners completely drive the creative decisions, instead of simply providing a tool (of market analysis) for management to consider.

Disney is a creative company. The creative environment must drive the company, with input from the marketing and strategic planning staff before final approval. But, by definition, creativity is about starting something, not just answering to a business need alone. Most of Walt's original ideas that are now seen as brillliant (color and sound cartoons; animated features; a theme park) did not start at the balance sheet -- in fact they challenged it. But he worked through Roy and his own business sense to make the business part accommodate his dreams (like when he came up with a deal to put his show on ABC in order to get the down payment for Disneyland -- and ended up revolutionizing both).

Second -- as for "branding" itself to be inappropriate for the WDC:

It may seem like a simple matter of semantics, but it there is a subtle but important difference between "brand" and either "product" or "character," both of which are important to the WDC. Things are "branded" when there is no other readily distinct difference between them (such as soap powders or cows).

Mickey is a CHARACTER, with assigned personality and history, that "colors" what the company can do with him. He is more than a "brand," and he is best managed when everyone understands the "character" and its relationship to products sold or movies made that feature him.

Disney's PRODUCT is a movie or a vacation or a souvenir (or the whole thing: goodwill). While the concept of "brand management" is useful in determining things like whether Disney's NAME will be placed on something, the first consideration needs to be the product itself. Is it a worthwhile investment, period?

You see, I think it translates into the very basis of the company: A "brand" is simply assigned onto an indiscriminate product. A "name," nowever, is earned, usually by marketing a good PRODUCT (with CHARACTER, in Disney's case) to the point that goodwill is strong.

So, what I am saying is, that while brand management and other business-school ideas are useful as a tool, they should be just that: a tool to help manage, NOT suffocate, the creative CHARACTERS and PRODUCTS that suport the goodwill and long-term value of the company. Disney's mindset should concentrate on the distinctiveness of its CHARACTERS and PRODUCTS, not its "brands" -- and the rest of the marketing will be easier.

The best managers let the creators create, and manage the resources to keep it happening and profitable ... not the other way around.

(Sorry that this post was long. I wanted to explain my view completely.)
 

prberk

Well-Known Member
I guess I will add one more thing:

When I researched and applied to the Darden School of Business at U.Va. (a top-ten business school) several years ago, I learned something that stuck out about the MBA: They said that the Master's in Business Admin. (MBA) was best suited for a person who already had a bachelor's degree in SOMETHING ELSE, like engineering. They wanted people who already had a valuable skill. The MBA was best used when you already knew the product you were learning to manage....

I think this concept speaks volumes, and when these concepts are out of sync the company stumbles.
 

speck76

Well-Known Member
prberk said:
(Sorry that this post was long. I wanted to explain my view completely.)

I aprreciate your post. I too often see people posting on this site that make bad comments about this subject, but really have no idea what they are talking about.

....but I think Disney's worst threat is "speed to market"....they can not research today and react tomorrow with many of their products. In the mid-90's, research said that they needed to create films that appealed better to boys, so they created "boy films" like Atlantis and Treasure Planet.....the problem is, 4 years later when the films were ready to be released, the desire for such a product had passed.

The MK just opened a new attraction themed to Stitch, and although Stitch is still popular, the movie came out almost 5 years ago.....how much longer will Stitch's popularity remain, and how fast will WDW be able to react if the popularity of the character decreases.
 

speck76

Well-Known Member
prberk said:
I guess I will add one more thing:

When I researched and applied to the Darden School of Business at U.Va. (a top-ten business school) several years ago, I learned something that stuck out about the MBA: They said that the Master's in Business Admin. (MBA) was best suited for a person who already had a bachelor's degree in SOMETHING ELSE, like engineering. They wanted people who already had a valuable skill. The MBA was best used when you already knew the product you were learning to manage....

I think this concept speeks volumes, and when these concepts are out of sync the company stumbles.


I have never found managers with MBA's to be of any particular use if they were under 35 years of age. It is funny to me to see co-managers who are in school currently for their MBA, and they come back to work talking in large words, when truely they have not added any value to their job....because they don't yet know the job well enough.
 

FigmentJedi

Well-Known Member
speck76 said:
The MK just opened a new attraction themed to Stitch, and although Stitch is still popular, the movie came out almost 5 years ago.....how much longer will Stitch's popularity remain, and how fast will WDW be able to react if the popularity of the character decreases.
Lilo and Stitch came out almost 3 years ago.
 

speck76

Well-Known Member
Tahu said:
Lilo and Stitch came out almost 3 years ago.

oops....you are right....I thought it was 2000.

Still, even at that, 3 years after the movie came out, the characters are still popular, but for how much longer.

Ariel, Belle, Aladdin.....those characters are still popular, but how often are Mulan, Quasimodo, and Koda featured?
 

prberk

Well-Known Member
speck76 said:
I aprreciate your post. I too often see people posting on this site that make bad comments about this subject, but really have no idea what they are talking about.

....but I think Disney's worst threat is "speed to market"....they can not research today and react tomorrow with many of their products. In the mid-90's, research said that they needed to create films that appealed better to boys, so they created "boy films" like Atlantis and Treasure Planet.....the problem is, 4 years later when the films were ready to be released, the desire for such a product had passed.

The MK just opened a new attraction themed to Stitch, and although Stitch is still popular, the movie came out almost 5 years ago.....how much longer will Stitch's popularity remain, and how fast will WDW be able to react if the popularity of the character decreases.

Thanks, I agree.

I guess that is why I worry about them trying too hard to let the creative functions FOLLOW the market research completely. That is backward, and simply sets up this "keeping up" defensive mentality that never wins for long.

Instead, Disney should restore creativity to the driver's seat, and let the market catch up. This is what Disney is known for. It is riskier, but not entirely so when you have a creative environment informed by character development and a sense of place that Disney has uniquely crafted. And ultimately, it is more profitable.

That is why it worried me that they fired so many long-term animators and trimmed the imagineering department too much (or, for that matter, grew them too fast and indiscriminately during the nineties). Disney needs to keep and maintain its environment that attracts and retains both (1) the most creative minds and (2) people who understand the particular creative heritage and contributions of the company's foundations.

It's a delicate balance. But it starts with being creative and TIMELESS in appeal, not driven by TODAY's market....

Thanks for your thoughts. (I thought you would appreciate my criticism of overuse of B-school principals when you understood that I had them myself! -- just have been shown the need for perspective!!) :)
 

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