7,000 job cuts at Disney

[Frank Cox]

https://www.latimes.com/entertainmen...g-nelson-peltz

Walt Disney Co. Chief Executive Bob Iger said Wednesday that the Burbank company will shed 7,000 jobs in an effort to save $5.5 billion in costs, marking some of the steepest reductions in the company’s history and the latest sign of Hollywood’s retrenchment.

The belt-tightening underscores the extraordinary difficulties Disney and other media giants face as they reckon with the realities of streaming economics — which have proved more vexing than many anticipated — and the challenges facing Iger, who took over from ousted CEO Bob Chapek in November.

Disney is facing pressure to control costs and boost profits as it continues to lose money from its key streaming business, which includes Disney+.

“While this is necessary to address the challenges we’re facing today, I do not make this decision lightly,” Iger said in a conference call with analysts. “I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes.”

[Steve Guttag]

Sooo...are they going to fire 7,000 people from Disney +? Or are they going to fire 7,000 people from other places that are profitable and cause them to potentially be less profitable by lowering standards and service? How about making movies that people want to see? Once they are done in the theatres, then you have something for your streaming. Streaming will never be what they think it will be.

Streaming, almost by definition, deals in "stale" content. They can develop direct-streaming content but then, that money goes towards getting subscribers and keeping subscribers. It is much harder to judge just how much one piece of content helped in that regard unless you see a big up-tick when you release something on streaming and then a down-tick when the series ends.

[Frank Cox]

Disney stuff used to be guaranteed to be really good and guaranteed to get big crowds. Something changed and that's no longer the case.

I won't pretend to be an expert on this stuff, but I do know what I hear people saying when they come to movies here, and what I hear are two things.

The good stuff gets worked to death. Star Wars, Marvel.... They just announced that there will be more sequels for Frozen and Toy Story now as well.

And a lot of people get turned off by the "save the whatever/promote the lgbt/etc" stuff that shows up in their movies. It creates controversies where no controversy needs to be created.

[Jim Cassedy]

Rumors are that the layoffs will even extend to some of their legacy titles. Snow White will now have to
make-do with only 5 dwarfs, and henceforth there will only be two little pigs & 750 dalmatians, I've heard.

[Darin Steffl]

How isn't Disney+ making money? It's literally streaming content they own the rights to. They should be profitable on that after the first 10k subscribers I'd think.

Also, making movies that are inclusive with one or two LGBT characters should not be controversial. Some right leaning supporters want to call it controversial but inclusivity will prevail over hateful rhetoric.

Over 1 in 5 Gen Z people in the US identify as LGBT with the Gallup source linked below. This is a group that is becoming more comfortable coming out as it becomes more accepted in the US. It's logical to think that older generations are also close to 20% LGBT but are afraid to come out or identify as LGBT due to fear and shame from growing up in times when it was not as accepted. As a 31-year old who doesn't hate someone who is different, I feel it's ok if movies try to include a mix of characters.

https://news.gallup.com/poll/389792/...-ticks-up.aspx

[Mark Gulbrandsen]

Disney stuff used to be guaranteed to be really good and guaranteed to get big crowds. Something changed and that's no longer the case.

I won't pretend to be an expert on this stuff, but I do know what I hear people saying when they come to movies here, and what I hear are two things.

The good stuff gets worked to death. Star Wars, Marvel.... They just announced that there will be more sequels for Frozen and Toy Story now as well.

And a lot of people get turned off by the "save the whatever/promote the lgbt/etc" stuff that shows up in their movies. It creates controversies where no controversy needs to be created.

Yea, something did change... Walt died... Eiger came along and ruined everything. Eiger thinks that profits and stock holders are everything. Walt did not think that way.

When was the last time any of the Disney classics played in a cinema? Yea, I can't remember either...

[Lyle Romer]

How isn't Disney+ making money? It's literally streaming content they own the rights to. They should be profitable on that after the first 10k subscribers I'd think.

First of all, in order to attract and maintain subscribers the streaming services must continuously produce new content. Disney+ can't exist just by streaming movies that they own the rights to. Producing quality content isn't cheap.

Second, even if they did just stream existing product that they own the rights to, there are significant IT costs to run a streaming service. You need massive server farms, massive amounts of redundant storage and huge amounts of bandwidth to push out the streams.

The costs are not fixed so there isn't really a base number of subscribers that once they get beyond everything is profit. The content creation cost gets spread thinner as the subscriber count increases but the IT costs and other ancillary costs like providing customer and technical support continue to grow as the subscriber base grows.

[Darin Steffl]

Disney doesn't host their own infrastructure as far as I know. They use multiple CDN's so they have monthly costs for how much they store and how much bandwidth is used for streaming. But they don't have to worry about any of the physical side of things like datacenters and servers. The breakeven is much lower when you outsource this side of things because there's almost no Capex involved, just Opex.

I understand the new content side costing money but if they'd release every new movie to theaters first, advertise the heck out of it, they'd make more money than only releasing to D+. A well advertised and liked Disney movie will more than pay for itself in theaters so it goes to D+ for "free" then, not costing them anything to acquire since it make a profit at the box office.

[Steve Guttag]

Also, making movies that are inclusive with one or two LGBT characters should not be controversial. Some right leaning supporters want to call it controversial but inclusivity will prevail over hateful rhetoric.

Over 1 in 5 Gen Z people in the US identify as LGBT with the Gallup source linked below. This is a group that is becoming more comfortable coming out as it becomes more accepted in the US. It's logical to think that older generations are also close to 20% LGBT but are afraid to come out or identify as LGBT due to fear and shame from growing up in times when it was not as accepted. As a 31-year old who doesn't hate someone who is different, I feel it's ok if movies try to include a mix of characters.

Darin, like with politics, I cannot think of a scenario where a discussion on this topic will not end up with the internet version of shouting and discourse.

What shouldn't be in conflict is the discussion that Disney, by and large, is not producing content, at the moment, that people want to go out to the theatres to see. The reasons Frank has stated above are identical to the ones I've heard. It isn't that people don't want to go to the movies. Avatar 2 did get its $2B+ money and that had the Disney studio behind it. Since they are set to release the sequels (with Digital Cinema Forum having 80% or more in the can already) there may be Avatar fatigue too, if they do all of them.

Another thing that should make sense. The industry was hurting before C19 an it got very heavily hurt by the response to C19. While recovering, it is probably best to minimize controversy and giving reasons to avoid coming to the cinema. It's back to the basics. Make entertaining movies and present them well.

[Lyle Romer]

Disney doesn't host their own infrastructure as far as I know. They use multiple CDN's so they have monthly costs for how much they store and how much bandwidth is used for streaming. But they don't have to worry about any of the physical side of things like datacenters and servers. The breakeven is much lower when you outsource this side of things because there's almost no Capex involved, just Opex.

I understand the new content side costing money but if they'd release every new movie to theaters first, advertise the heck out of it, they'd make more money than only releasing to D+. A well advertised and liked Disney movie will more than pay for itself in theaters so it goes to D+ for "free" then, not costing them anything to acquire since it make a profit at the box office.

The CAPEX for outsourced infrastructure gets folded into the Opex. They are charged cost + some profit for the service.

Disney+ (or any streaming service) can't exist on movies alone. They have to provide TV series as well to attract and retain subscribers.

[Leo Enticknap]

What shouldn't be in conflict is the discussion that Disney, by and large, is not producing content, at the moment, that people want to go out to the theatres to see. The reasons Frank has stated above are identical to the ones I've heard.

And me. The issue is not what is and isn't OK to portray in movies, but rather what is and isn't OK to portray in movies with a specific target audience of young children. Parents want to be able to trust the Disney brand not to introduce explicit portrayal/discussion of sexuality (of any variety) or controversial, disputed political topics; race and climate change being two that have been engaged with in Disney productions aimed at children recently. Once parents feel that it's not safe to put their children in front of Disney+, or take them to the theater to see a Disney movie, without vetting what they're going to see, carefully, first, the attraction of both takes a big hit. That doesn't make those parents homophobes or climate deniers. I would expect my child to be exposed to and understand both issues at age 16, but not at age 6.

[Geoff Jones]

What shouldn't be in conflict is the discussion that Disney, by and large, is not producing content, at the moment, that people want to go out to the theatres to see.

Domestic Box Office For 2022

1	Top Gun: Maverick	$718,318,561	4,751	$718,732,821	May 27	Paramount Pictures
2	Black Panther: Wakanda Forever	$436,499,646	4,396	$453,512,292	Nov 11	Walt Disney Studios Motion Pictures
3	Doctor Strange in the Multiverse of Madness	$411,331,607	4,534	$411,331,607	May 6	Walt Disney Studios Motion Pictures
4	Avatar: The Way of Water	$401,007,908	4,340	$638,639,987	Dec 16	20th Century Studios
5	Jurassic World: Dominion	$376,851,080	4,697	$376,851,080	Jun 10	Universal Pictures
6	Minions: The Rise of Gru	$369,695,210	4,427	$369,695,210	Jul 1	Universal Pictures
7	The Batman	$369,345,583	4,417	$369,345,583	Mar 4	Warner Bros.
8	Thor: Love and Thunder	$343,256,830	4,375	$343,256,830	Jul 8	Walt Disney Studios Motion Pictures
9	Spider-Man: No Way Home	$231,808,708	4,336	$804,793,477	Dec 17	Sony Pictures Entertainment (SPE)
10	Sonic the Hedgehog 2	$190,872,904	4,258	$190,872,904	Apr 8	Paramount Pictures
11	Black Adam	$168,054,237	4,402	$168,152,111	Oct 21	Warner Bros.
12	Elvis	$151,040,048	3,932	$151,040,048	Jun 24	Warner Bros.
13	Uncharted	$148,649,929	4,275	$148,648,820	Feb 18	Sony Pictures Entertainment (SPE)
14	Nope	$123,277,080	3,807	$123,277,080	Jul 22	Universal Pictures
15	Lightyear	$118,307,188	4,255	$118,307,188	Jun 17	Walt Disney Studios Motion Pictures

5 out of the top 15 - Disney/ 20th
3 out of the top 15 - Universal
3 out of the top 15 - Warner
2 out of the top 15 - Paramount
2 out of the top 15 - Sony

Parents want to be able to trust the Disney brand not to introduce explicit portrayal/discussion of sexuality (of any variety)

What explicit portrayal or discussion of sexuality (of any variety) did Disney introduce?

[Steve Guttag]

Geoff, come on...so yea, in a year where there is lower than typical releases, Disney sneaks into the list a few times with financial failures but still Top 15. Let's look at #15...Lightyear, took in $118M on a budget of ~$200M. And you are posting gross numbers...not profit. Disney only got to keep about half of the gross and then there is the additional expenses of getting a movie into release (distribution, advertising). Disney lost HUGE. .If Disney were to have nothing but 2022 type numbers in their future...they can top-15 themselves into bankruptcy.

Let's take their top grosser, Black Panther: Wakanda Forever. $436M is nothing to sneeze at. It cost ~$250M to make so they needed to gross well over $500M and probably more like $750M to claim that it was a good money maker. It looks like it is over $842M . So, that is in the "win" column...but that is their best of 2022 (though Avatar 2, which started in 2022 will clearly be the big $$$$ winner).

Top Gun: Maverick: $718M on a ~$170M budget. That's profitable.

If Disney wants to product content that inherently scares away a sizable chunk of their potential audience, they better start making movies more thrifty and perhaps, less Disney-like. If they want to capture the bigger audiences of their prior work, avoid the unforced errors and go more mainstream. Concentrate on the story and entertainment.

[Geoff Jones]

I posted gross numbers in response to the suggestion that Disney "is not producing content that people want to go out to the theatres to see." By and large, they appear to be better at producing content that people want to go out to the theatres to see than the other studios. I didn't realize that comment was also addressing the profit margins of their films.

I interpreted the "at the moment" portion of the comment to mean "recently," not some year farther in the past, with more typical releases.

I apologize for understanding your comment so poorly.

[Bobby Henderson]

It's not enough for a streaming service to just show Hollywood movies. Traditional premium cable channels, HBO in particular, blew apart the movies-only business model for premium cable channels many years ago. Like all the other streaming platforms and premium cable channels Disney+ has to produce (or buy) TV series content too.

Disney has to blow quite a lot of money on all those TV series spin-offs from Star Wars and Marvel properties. I'm guessing the 7000+ people they'll lay off will come from many corners of the corporation. I'd expect a bunch of employees at Disney theme parks to get the axe. Not that it would make any difference with me; I'm pretty much done with visiting any amusement parks thanks to all the runaway douchebag price gouging they've been doing on every damn thing. That premium price line cutting shit is really offensive. Fuck amusement parks.

The Disney of today is far from the one that existed 30 years ago. It's shameless how much they're milking properties for all they're worth. They've pretty much ruined Star Wars -and that's just the movies. I do not have a Disney+ subscription and have no desire to waste countless hours of time watching all those derivative spin-off series. I'm not signing up for Paramount+ either; I don't care how many versions of Yellowstone they pull out of their asses.

The culture war stuff is somewhat irrelevant. Disney's problems run deeper than the "outrage" of someone coming out of the closet or wearing clothes meant for another gender. The fact is a shit load of Americans get entertained by being "outraged" by something. There is a giant horde of Americans spring-loaded, ready to be triggered by something that doesn't fit their "world view" perfectly. It's all a lot of performative bullshit. I hope the traditional cable TV industry implodes because it could take all those horrible 24 hour "news" networks with it. They don't broadcast news, they broadcast anger pornography. People tune in to get pissed off.

Parents have worse things to be concerned about than what their kid might see on Disney+. Any of these same kids have easy access to far worse things, via their smart phones and computers. Hell, I'd be more concerned about how a kid might be influenced by watching a cable news channel. Basic people-skills things like manners and decency are absolutely rejected there. But the average age of cable news channel viewers is near 60 years and older. The biggest problem children have these days is their own parents, many of them don't function as parents at all. The "parents" plant the kids in front of a digital pacifier (TV, game console, phone, etc) to keep them occupied and out of their hair.