Disney turns 100: An empire under pressure

Just a few years ago, Disney seemed almost invulnerable. But the corona pandemic and the upheaval in the TV business put the giant under pressure.

The decline of the once lucrative cable television in the USA, the fierce competition in streaming, harbingers of a creative revolution through artificial intelligence (AI) – Disney boss Bob Iger has to set the course that will decide the future of the company. This also has consequences for what we will experience as viewers in the cinema and TV and as visitors to amusement parks. Iger announced that there would be fewer of the expensive Marvel and “Star Wars” productions with which the company wanted to make its Disney+ streaming service more attractive.

Streaming incurs high losses

Disney’s problem: Streaming makes high losses. In the second quarter of 2023 alone, it brought in an operating loss of half a billion dollars – even after austerity measures. Meanwhile, the once reliable source of money that was supposed to finance competition with Netflix and the like is drying up. More and more American households are giving up their expensive cable TV contracts. Instead, they stream – but while the cable bundle guarantees revenue for all channels, you have to fight for customers month after month with Netflix, Apple, Amazon and Paramount.

The cable business was deteriorating faster than he expected, Iger said in the summer. And he brought a radical change into the conversation: Perhaps over time, classic TV channels like ABC would “no longer be part of the core” of Disney. The first prospective buyers quickly appeared. It is still unclear whether Disney’s streaming viewers will have to forego series from the ABC program following a potential sale.

From creativity to empire

The 100 Years of Disney is the story of a company that built on creativity, invented new business models – and became an empire. Founded on October 16, 1923 as an animation studio by brothers Walt and Roy, Disney repeatedly took risks to realize artistic visions.

In 1928, the Mickey cartoon “Steamboat Willie” was the first animated film to be set to music. In the 1930s, Roy is said to have feared that Walt’s ambition to spend years working on “Snow White and the Seven Dwarfs” would bankrupt Disney. The first long-drawn film was also a financial success – but it was followed by several loss-makers. To finance the construction of the first Disneyland park in the 1950s, Walt Disney sold his house in Palm Springs.

Came across the fan article early

At the same time, Disney discovered at the end of the 1920s how lucrative the business with fan articles based on popular characters could be. The company also recognized early on how valuable it is to be constantly present in living rooms with television. Animation was supplemented with films and later our own TV channels. Under Iger, Disney bought computer animation pioneer Pixar, Marvel Studios with the “Avengers,” George Lucas’ “Star Wars” universe and Fox’s film and television business.

The acquisitions brought together an unprecedented creative arsenal, but the price also came in the form of billions in debt that now weighs on Disney. Meanwhile, Iger continues to press forward and wants to invest $60 billion (around €57 billion) in the expansion of theme parks and the cruise business over the next ten years. The 72-year-old was actually already retired, but came back after dissatisfaction with his successor Bob Chapek grew. Now Iger wants to stay at the top of Disney until 2026. He is “extremely optimistic” that the group will cope with the change.

The change in technology

At the same time, films and TV productions are made differently today than they used to be. In many superhero films in particular, the actors often act largely in blue-colored studios, while the surroundings are later added on the computer. In series like “The Mandalorian” on Disney+, a massive LED screen provides the backdrop for many scenes, which is much cheaper than shooting on location. The months-long strike by writers and actors in Hollywood was also sparked by fears that over time studios could let artificial intelligence write scripts and replace people in the background of scenes with digital characters.