It’s rare for Disney Chief Executive Bob Iger to acknowledge his company has had creative missteps. So when he does, it’s probably wise to pay attention.
“As I’ve looked at our overall output, meaning the studio, it’s clear that the pandemic created a lot of challenges creatively for everybody, including for us,” Iger said last week during Disney’s earnings conference call. “I’ve always felt that quantity can be actually a negative when it comes to quality, and I think that’s exactly what happened, we lost some focus.”
Iger followed his comments with a new mandate: Disney will be making fewer films. It’s a similar strategy to one Iger took when he first became Disney CEO in 2005. At the time, Disney’s animation and live-action studio divisions had struggled with a string of failed movies, including including “The Alamo,” and “Home on the Range” and “Pooh’s Heffalump Movie.”
Iger’s solution then was to cut 650 studio jobs and slash its annual movie production output in half, releasing only about a dozen films each year. He also acquired Pixar, giving Disney an immediate infusion of quality movies and a brand of storytelling that rubbed off on Disney’s traditional animation studio.
Iger appears to be re-running the playbook for 2024. After flooding Disney+ with movies and other new content for several years, Iger is strategically cutting back to accelerate free cash flow generation and profitability. Disney eliminated animation jobs in June — the first significant cuts in about a decade — as part of a larger round of job reductions. After releasing four Marvel Cinematic Universe movies in 2021 and three in 2022 and 2023, Disney will have just one in 2024 — “Deadpool 3.” There hasn’t been a Star Wars movie since 2019′s “The Rise of Skywalker.”
In 2006, acquiring Pixar quickly improved Disney’s film quality and box office results. The animators’ blend of technology and storytelling rubbed off on Disney’s traditional animation unit, eventually leading to hits including “Frozen” and “Zooptopia.” This time, Disney will need to improve organically, putting pressure on Iger and studio head Alan Bergman to show results as activist shareholders Trian Partners and ValueAct threaten to pressure management and the board.
“I feel good about the direction we’re headed, but I’m mindful of the fact that our performance from a quality perspective wasn’t really up to the standards that we set for ourselves,” Iger said last week. “And so working with the talented team at the studio, we’re looking to and working to consolidate, meaning make less, focus more on quality. We’re all rolling up our sleeves, including myself, to do just that.”
Iger noted the Disney animation studio’s next release, “Wish,” which stars Ariana DeBose and debuts in theaters on Wednesday, could begin a run of sustainable hits for Disney. Early ticket sales suggest “Wish” is tracking at $55 million for the Wednesday to Sunday period including Thanksgiving. That trails previous Thanksgiving openers from Disney movies including “Ralph Breaks the Internet,” “Coco,” “The Good Dinosaur” and “Tangled” but is higher than the $18.9 million brought in from “Strange World” last year and the $40.6 million from “Encanto” in 2021, according to data from Comscore.