Why Disney’s centennial is its worst year ever
Disney/Marvel StudiosDisney turns 100 years old today, marking a huge and historic milestone for arguably the most recognized media franchise in the world – so why is it having its worst year ever? From box office flops to falling stocks, the House of Mouse appears to be in a whole new world of pain right now.
You need only see a silhouette of mouse ears, and Mickey comes to mind. For nearly an entire century, The Walt Disney Company has been a fixture of childhoods worldwide, pumping out countless characters who have passed the test of time, from Donald Duck and Goofy to Simba and Baloo to Woody and Elsa to Cinderella and Mulan – the list goes on and on.
That’s not to say Disney has been without its controversies over the years. The House of Mouse has been working to rectify controversial moments from its history, removing the Song of the South track from its parks and parades and adding content warnings before some of its titles on its streaming platform, Disney Plus.
Despite its efforts, the family entertainment juggernaut has been flailing in 2023 – ironically, the year it turns 100 years old. Read on as we explore why this year’s being hailed Disney’s worst yet.
Disney’s perfect storm of box office flops and expensive mistakes
Let’s start with the big-eared elephant in the room: 2023 has seen a whole host of Disney movies flopping at the box office, bolstered by very expensive production costs. In February, Ant-Man 3, aka Ant-Man and the Wasp: Quantumania, dropped and quickly became one of the MCU’s biggest failures to date, earning $476 million – despite experts suggesting it needed to make $600 million to break even. What’s more, the film was critically panned with a 46% Rotten Tomatoes score.
But this was nothing compared to the live-action Peter Pan & Wendy remake, which earned just 11% from audiences when it landed on Disney Plus in April. It didn’t drop in cinemas and instead went straight to streaming, and while it wasn’t as much of a financial disaster as Ant-Man’s threequel, it was yet another of Disney’s live-action projects that failed to capture the magic of the originals and saw audiences losing faith once more.
May was an altogether different month. Why? Because Guardians of the Galaxy 3 exploded into cinemas. A critical and commercial success, James Gunn’s third and final movie about the ragtag cosmic crew suggested 2023 could turn around for Disney’s MCU. But – and it’s a big but – this was Gunn’s project and Gunn’s film series. Guardians 3 marked his final project with the superhero franchise before parting ways to helm the new DCU, underscoring the fact that the House of Mouse lost one of its great minds.
Despite ongoing criticism from the Disney purists, who accuse the House of Mouse of running out of ideas with its live-action reboots, they continue to pump out thick and fast, with The Little Mermaid splashing into theaters in May. But even the massive IP failed to draw in audiences, an issue that was bolstered by the discrimination and backlash towards Halle Bailey taking on the role of Ariel. A journey under the sea was not enough for the film to get seats filled, and The Little Mermaid reboot earned $561 million at the box office, against an estimated $625 million requirement to break even.
And the flops just kept on flopping. Pixar hasn’t had a hit in a while, and this trend continued with Elemental, which opened in June to $29.6 million domestically, marking the second-worst opening for a Pixar film ever (over a long theatrical window, its legs proved to have stamina, with a profitable haul of nearly $500 million).
But nothing prepared Disney for the blow that was Indiana Jones 5, aka the Dial of Destiny. The long-running franchise marked Harrison Ford’s final return to the role, but even this failed to draw in viewers. Adding fuel to the fire, the movie was incredibly expensive to make – $300 million was sunk on production, while the marketing cost was estimated at $100 million, making its $382 million worldwide haul a hugely disappointing outcome.
Other Disney IPs haven’t fared well either, including Star Wars. The Mandalorian Season 3 experienced its worst viewership records to date when it dropped in March, while fans accused the series of a drop in quality. Ahsoka’s debut season did better, but some questioned why Disney released the viewing figures when it’s known not to do this too often.
Ultimately, 2023 has been a tough year for Disney, with the box office and streaming flops contributing to the turnout. In fact, in June, financial analyst Valliant Renegade estimated the firm has lost $890 million at the box office in the past year alone. But why are these failing to perform? Well, there are a number of reasons, one of the most significant being huge budgets. The bigger the budget, the harder it is to break even, and all of the aforementioned films fit into this category.
Then there’s the fact that 2023 has been a big year for new and fledgling IPs. The Barbenheimer phenomenon proved that audiences have a thirst for original storytelling. Concurrently, franchise fatigue has bled out into other known franchises such as Indiana Jones, and Disney titles suffered as a result.
Behind the scenes issues raise alarm bells
Behind the scenes, alarm bells rang last year when Disney’s longtime CEO Bob Iger uno reversed his 2020 decision to retire and came back, agreeing to serve in the role for two more years in a bid to help the company get back on track. The move arrived amid a decline in company growth and revenue concerns following his hand-picked replacement Bob Chapek, who was swiftly fired from the role.
In July this year, Iger extended his contract by another two years. As reported by Bloomberg, Iger now has three more years “to clean up a big mess that also includes a slowdown in the company’s theme-park business, a series of misses for the company’s film division and the strike by Hollywood actors and writers against all of the media companies.”
Iger has spent his career building up Disney to the powerhouse it is today, with its share prices soaring in his first tenure as CEO. Over the years, he has led the company through its acquisition of Pixar, Marvel, Lucasfilm, and 20th Century Fox, as well as its launch of Disney Plus. But what used to be Mickey’s cash cows are now part of what’s been described as a “yard sale,” with Iger reportedly considering selling stakes in its TV assets, including ESPN.
More tangible actions in Iger’s plan to appease investors and save a reported $5.5 billion in costs include price hikes across its streaming platforms, more ads, slashing production costs, and cutting close to 7,000 jobs from its global workforce. There was a sense of urgency in the plans, one fans didn’t expect from what has always been the gold standard in family entertainment.
Iger’s poker face hasn’t let up, with the CEO remaining optimistic in interviews about the situation. “We’ve gotten a lot done very quickly,” he told CNBC in July. “Significant cost reductions, a complete realignment of the company in terms of its structure, some major changes in terms of personnel, dealing head on with some of our biggest challenges, and also looking for opportunities. I actually am quite pleased as is the board and the team with how much we’ve accomplished in a short period of time but there are a lot of challenges out there.”
One of those challenges is its streaming division, which lost $512 million in the most recent quarter, bringing total losses since Disney Plus was launched in 2019 to $11 billion. But Iger’s action plan to increase hikes and ads to boost revenue hasn’t gone down well with subscribers; from October 12, the ad-free plan jumped from $10.99 per month to $13.99. At the same time, Disney has been pulling content from its streaming libraries in a bid to save dosh, leading to a surge in the search term “cancel Disney Plus”.
Concerns have been heightened by the recently resolved writers’ strike and the ongoing actors’ strike, which seek fairer pay in the streaming era and stricter regulation on the use of AI. This may impact the firm the most, as its platforms Disney Plus and Hulu rely on fresh content. Iger sparked outrage when telling CNBC’s Squawk Box that the demands weren’t “realistic,” which was further fuelled when it started hiring for AI specialists amid the strikes, with some comparing the move to Black Mirror.
Political battles have hurt Disney
Irrespective of individual political beliefs, it’s an observable reality that Disney currently navigates precarious waters with its devoted fanbase due to its cultural battles, the latest being its ongoing battle with Florida governor and wannabe POTUS Ron DeSantis. Historically, the House of Mouse’s brand has been synonymous with enchanting fantasies and fairytales, meticulously crafted to captivate a young audience. And it’s for this reason that numerous advocates suggest that the company should steer clear from political involvement.
As said by Robert Passikoff, founder and president of Brand Keys: “Research has shown consumer brands are – or should be – apolitical. I’m talking politics, not corporate social responsibility. There’s a difference. You don’t have to be a Democrat or Republican to like Mickey Mouse, or movies including Frozen or The Avengers, or the concept of sustainability. But these days, the minute you have the brand take a political stand, one group of consumers or another is going to hate you. Not sometimes. Not often. Always.”
As a result, the cinematic realm is also proving to be a battlefield for Disney, with sections of its audience voicing intentions to boycott upcoming releases in response to political stances expressed by its stars, such as Rachel Zegler in the Snow White live-action remake. Disney was not spared scrutiny during the July release of the controversial indie film Sound of Freedom either, with some spectators suggesting that the company deliberately shelved the project due to some sort of hidden agenda.
Regardless of the veracity of these critiques and conspiracy theories, Disney is under the microscope more than ever. Its recent involvements and controversies in the political arena appear to be exacerbating the situation, spotlighting the potential issues for brands straying into the tumultuous domain of political discourse and alignment.
Will Disney live happily ever after?
Although some might argue its political battles are the most pertinent issue, experts will say the biggest problem facing Disney right now is the loss of revenue through its streaming division and a decline in traditional TV formats. But that’s not to say this storied entity isn’t on the brink of a final curtain call. The economic tribulations are industry-wide, and as entertainment mediums evolve, Disney too must dance to the new tune. It’s a challenging transformation, one that Bob Iger has willingly stepped out of retirement to helm.
Disney’s resilience is evident in its proactive strategies. Even as Disney Plus waded through choppier waters than anticipated, its losses are narrowing, a testament to its potential for resurgence. Iger’s ambitious aim to save $5.5 billion annually is an indicator of Disney’s commitment to reclaiming its magic. The success story of its theme parks, notably with an 11% spike in profitability from the year previous, lends further optimism.
Ultimately while Disney’s current narrative seems more complex than its straightforward fairytales, the company is on the road to recovery. It’s going to be a long road ahead and Iger has his work cut out for him, but if the conglomerate can nimbly adapt, it may get to enjoy a happily ever after in the future.
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