Is Disney going to suffer the same fate as Sierra? (Article, please read!)

[Sir Perceval of Daventry]

Read the following article. I think Disney is heading, slowly, down the path that Sierra went to ruin: A loss of in-house creativity and a clear understanding of what SIERRA meant business modelwise and internally, followed by artificial growth through numerous acquisitions of too many creatively diverse companies that had little do with what Sierra proper menant, leading to a lack of a clear brand identity or guiding principle. Sierra gobbled up tons of companies simply to inflate their growth and for their IPs without stopping to consider what these companies would add to SIERRA...The same thing Disney is now doing. Added to this, Sierra allowed the companies it bought to retain their own corporate identity and brand names and didn't simply roll them into the Sierra brand...Leaving "Sierra" as a weak shell for more productive, generally autonomous subsidiaries.

By the time Sierra was bought, Sierra (the main company) was making less and less of it's own products, and those that were developed in-house were inferior to what had come before, and it's main hits were coming from it's subsidiaries, making Sierra mainly a distribution label for a bunch of subsidiary brands, most of which were in totally different areas of the software industry...Added to this Sierra then had a series of CEOs who didn't understand what the Sierra brand meant. I see the SAME EXACT PATTERN happening to Disney and it's scary.

http://www.vulture.com/2012/05/why-cant-disney-find-a-studio-chief.html

Things have been wild and, well, Woola at Walt Disney Studios this year. The ebullience felt over last weekend's $200 million opening of The Avengers was tempered by the fact that the studio had to take a $200 million loss on March's John Carter. Such a spectacular failure didn't just highlight how dependent Disney has become on outside brands like Marvel, it also cost the studio chairman, Rich Ross, his job late last month.
But lost in all the media speculation and Hollywood chatter about who might replace the recently defenestrated chairman is a larger question that must be on the minds of potential candidates: What does "Disney" mean in 2012?

It is a brand that, almost since its founding in 1923, has become synonymous with family. But since he took over from Michael Eisner in 2005, Disney's CEO Bob Iger has been busy spending billions of dollars to acquire costly pinch hitters that now threaten to eclipse the Mouse: $4 billion for Marvel in 2009; $7.4 billion for Pixar in 2006; the Muppets from the Jim Henson Company in 2004 for an undisclosed sum, said to be less than a quarter of a billion dollars.

"In a strange way," Iger told Fortune magazine in a profile published yesterday, "I am the brand manager of Disney." It's a curious strategy that has paid off for Disney's stock price, which has shot up 80 percent under Iger's tenure, but it also seems to be taking a heavy toll on the Disney brand. As one rival studio chief puts it, "Bob Iger is the CEO of a company; Michael Eisner was the CEO of Disney."

There's only one problem with Iger's strategy: Disney became the world's largest consumer products company (and, for that matter, the world's largest publisher of children's books and magazines) not by outsourcing creativity, but by exploiting Disney-developed properties, as anyone who's watched the Lion King Parade tromp down Main Street USA can attest.

But with so many adopted children hogging the spotlight, Disney is the natural-born one that's getting pushed into the shadows: After all, Pixar didn't rename itself "Disney Animation" when it joined the company, and as one of Disney's largest shareholders, Pixar chief creative officer John Lasseter carries outsize influence on the Disney lot. So, too, does Marvel CEO Ike Perlmutter. If you doubt any of this, just ask Ross, now jobless thanks to the troika of Lasseter, Perlmutter, and Iger. Or ask Kevin Feige, Marvel's production chief, whom insiders say was approached by Iger about running the whole studio but declined — likely because it'd be a step down, not up.

And therein lies the rub both for the Walt Disney Company and its once-vaunted studios: Should Iger hire a studio chief merely suited for what the job has become (essentially a vehicle to distribute the intellectual property of others), or someone who can make the Disney Studios what it needs to become to remain a vital and relevant brand?

If it's the former, Iger may have found his man in Scott Stuber, the former vice-chairman of Universal Pictures, who insiders say met personally with Iger late last week to interview for the job. (Both men were unavailable for comment, per their spokespeople.) These days, Stuber is a producer, currently overseeing Universal's forthcoming quarter-billion-dollar Battleship. He is widely admired both for his charisma and ability to get things done as an executive, even if, as insiders say, developing original, family-friendly properties is not Stuber's strong suit.

Then again, not too much development is currently required at Walt Disney Studios, which between Marvel, Pixar, the Muppets, and a distribution deal with Steven Spielberg and Stacey Snider's newly recapitalized DreamWorks Pictures, has more than enough product to release. What such a reduced "studio" needs is less a visionary than a skillful politician and air-traffic controller who can massage the considerable egos of Mssrs. Lasseter, Permutter, Spielberg, and Bruckheimer while avoiding any more Hindenberg-like immolations, such as this week's $200 million write-down on John Carter.

"Every story about its outrageous success is careful to note that Disney is releasing The Avengers," says our rival studio chief. "But there's a difference between making and releasing, isn't there? The difference, even for making a tiny little film like, say, Honey, I Shrunk the Kids, is that it's a homegrown property that then grew outward. When you make a movie, even if it was years ago, the attraction lives in the [theme] park for twenty years. And that part of it, I don't see happening; there seems to be no interest in growing the Disney brand from homegrown material ... I see a future for the parks where Marvel's Iron Man is walking around, but he's not a Disney character."

Indeed, most of Disney Studios' recent big-screen successes have been reverse engineered from theme-park rides. This was, after all, the studio that took the last attraction that Walt Disney himself had a hand in designing (The Pirates of the Caribbean) from a heavily barnacled park stalwart and turned it into a global, multi-billion-dollar cash machine. But for the Disney brand to live on, its studios cannot forever mine its theme parks; it will now need to focus on its once-vaunted lot to find new hits to become rides and attractions.

"You have to say, 'This matters. This. Matters,'" says this rival studio chief. "The [Disney] name is both a handicap and a golden ring. But there's a brand here that either needs to be kicked in the shins and revitalized, or it's going to wither. I don't see it mattering to future generations the way that its mattered in the past."

If you doubt the perils of failing to innovate, just ask Viacom's capo Sumner Redstone how things are going at Nickelodeon. (Or simply read The Wall Street Journal's excellent analysis of Nick's SpongeBob crisis, which in short comes down to Nick losing nearly a third of the aging series' viewers compared with the same time last year.) Or ask Warner Bros. how many first graders know who Bugs Bunny is.

There have been some attempts at originality at Disney Studios, of course, and a few of them hugely successful. Alice in Wonderland, after all, was produced by former Disney Studios chief Joe Roth, and grossed just over a billion dollars worldwide. But there have been more costly Disney flops than hits (both Tron: Legacy and John Carter were money-losers) and sadly, far fewer swings of the bat by the studio, which now makes just three or four movies a year.

"I don't know why someone would even want the [Disney studio chairman] job when you're not really a 'studio' in the traditional sense of the word," opines one top film producer and former production chief at a rival studio. "It's almost set up to be just a distribution system."

Complicating matters, says this producer, is that the old adage coined by a former 20th Century Fox chairman is still operative today. "I think it was Bill Mechanic who once said, 'Being a studio executive is a great job, but a s****y life. Being a producer is a great life but a s****y job.' And that's still true." Or, as another agent puts it, "Being a studio exec is an all-in job, with all the stress of producing but with none of the glory or the money."
Who then, to lead Disney?

"The right person for this job has to think forward and know how to aggressively pursue new movies, rather than letting these other entities fill in the blanks," says one top producer and former studio production chief. "They need someone who can take advantage of what [Disney] means, because parents still want a sure thing."

The problem is, almost no one believes that Stuber — the producer of the forthcoming bawdy R-rated movie Ted (as well as 2011's Your Highness and 2010's The Wolfman) — is that person.
"I don't know why you'd hire someone who doesn't instinctively do what [Disney is] known for," says this producer.

Speculation has run from Marvel's Kevin Feige to Disney Über-producer Jerry Bruckheimer to Spielberg's partner, though none are considered likely to agree. Some have thought that Stuber's old partner and former MGM studio chief Mary Parent might be interested, but this, too, is unlikely: Parent just made the blockbuster Pacific Rim for Warner Bros. and by next month will be in New York prepping Darren Aronofsky's Noah. Parent is, perversely, having too much fun and earning too much money at making movies to be a likely hire at Disney. Some have even floated the idea that were Disney to make a sizable investment in DreamWorks Pictures (brace yourselves, Disney board members: Mr. Iger may need to ask you for more wheelbarrows of cash again soon!), former Universal Pictures chairwoman and current DreamWorks CEO Stacey Snider could be brought into the fold, since, after all, Disney already distributes DreamWorks' films. In Hollywood, as with most areas in life, there are few problems that can't be solved with lots and lots of money.

Oddly, though, the one name conspicuously absent from the Disney Studios chairman candidate rumor mill is that of Chris Meledandri, a producer once based on the Disney lot some twenty years ago who would go on to build largely from scratch a string of animated franchises and stand-alone successes for Fox and Universal that Disney would be lucky to have had: Alvin and the Chipmunks; Ice Age; Despicable Me; Hop; The Lorax.
Bald and bespectacled, Meledandri may be a photo negative of the suave, JFK Jr. look-alike Stuber. (Indeed, he could well be the inspiration for one of the villainous Gru's dimuntive, yellow minions in Despicable Me.) And yet, someone like Meledandri, if not Meledandri himself, is what Disney Studios would most seem to need right now: Someone who remembers Walt Disney's old maxim, which now seems oddly prescient: "I only hope that we don't lose sight of one thing – that it was all started by a mouse."

[Lambonius]

There are many HUGE differences between Sierra and Disney that really makes it a stretch to compare the two.

Probably the most important of these is the fact that Disney absolutely has an instantly identifiable and iconic "brand identity," whereas Sierra never did.  This brand identity is so strong that one can mention Disney to pretty much anyone anywhere and they instantly think of family-oriented films and merchandise, usually animated.  You can actually say something is "Disney" and people will instantly know what you mean.  It's an inextricable part of American pop culture at this point.  Sierra never had that kind of identifiable brand, even at its height.

I just don't see how even the most inept of executives could run Disney into the ground enough to make it no longer culturally relevant, no matter what was done to the company.

[Sir Perceval of Daventry]

There are many HUGE differences between Sierra and Disney that really makes it a stretch to compare the two.

Probably the most important of these is the fact that Disney absolutely has an instantly identifiable and iconic "brand identity," whereas Sierra never did.  This brand identity is so strong that one can mention Disney to pretty much anyone anywhere and they instantly think of family-oriented films and merchandise, usually animated.  You can actually say something is "Disney" and people will instantly know what you mean.  It's an inextricable part of American pop culture at this point.  Sierra never had that kind of identifiable brand, even at its height.

I just don't see how even the most inept of executives could run Disney into the ground enough to make it no longer culturally relevant, no matter what was done to the company.

While Sierra lasted for a much shorter time, I'd say for a time the name SIERRA was sort of akin to Disney but in the field of computer gaming. I imagine if one computer gamer asked another about the name Sierra in say 1990 or 1991, one would automatically associate it with it's Quests line of adventure games and perhaps Red Baron. I'd say within the computer game industry, the name Sierra was probably similar to the name Blizzard, in it's time before Sierra lost sight of what it was.

I'm not saying it's the exact same story, but a very similar pattern, that is going on with Disney. It'll happen much, much slower because Disney has been around much longer and has that identifiabilty to it, but I'm talking about long term worries here.

And you'd be surprised. Disney was a huge household name in the '80s, as I'm sure you might remember growing up, yet things had been so mismanaged by a clear lack of brand identity and direction that in the '80s Disney came EXTREMELY close to collapsing and being sold off piece by piece:

Despite the success of the Disney Channel and its new theme park creations, Walt Disney Productions was financially vulnerable [during the 1980s]. Its film library was valuable, but offered few current successes, and its leadership team was unable to keep up with other studios, particularly the works of Don Bluth, who defected from Disney in 1979.

By the early 1980s, the Parks generated 70% of Disney's income.

In 1984, financier Saul Steinberg's Reliance Group Holdings launched a hostile takeover bid for Walt Disney Productions, with the intent of dissolving the company and selling off its various assets. Disney bought out Reliance's 11.1% stake in the company. However, other shareholder filed suit claiming the deal devaluated Disney's stock and for Disney management to retain their positions. The shareholder lawsuit was settled in 1989 for $45 total from Disney and Reliance.

Even empires as mighty and well known as Disney can fall if they think they're too big to fail and if they fall into incompetent hands, or uncaring hands, or hands that don't know what Disney even means. I don't think Iger knows what the word "DISNEY" is supposed to mean, what that brand is supposed to be associated with in the public consciousness, and I don't think he really cares, outside of the bottom line and making the shareholders happy.....

[crayauchtin]

Let's pause for a second...

Disney has an entire television channel, which produces wildly popular television series and a multitude of original movies itself.
Disney has so many theme parks worldwide I don't even know the number. PLUS a cruise line.
Disney also keeps churning out Broadway shows.
Disney ALSO produces a ton of movies apart from the Disney channel.
Disney ALSO owns the ABC brand -- which means they're earning an income from ABC Family and ABC shows like Once Upon a Time.
Disney ALSO just bought the Lucas brand -- meaning they now own Star Wars which is one of the most extensive and successful franchises of all time.
And I know all of this without doing even the slightest bit of research, I am sure Disney has their fingers in more pots than even that.

Disney is not anywhere near collapsing or falling apart or even being remotely in danger and in even less danger of being culturally relevant. In fact, Disney is doing the miraculous marketing ploy of having multiple brands to appeal to the widest range of people possible.

Which, for the record, is NOT what Sierra did when they fell apart. Sierra tried to change their image to match with changing times, not to expand it.

I've got to ask -- and I apologize if this comes off as rude -- but what IS the preoccupation with the fall of Sierra, Perceval? It seems like every thread you make is about it -- and you're now also predicting the fall of major corporations (for what seems to me, flimsy reasons). I'm just curious what that's about.

[Sir Perceval of Daventry]

Let's pause for a second...

Disney has an entire television channel, which produces wildly popular television series and a multitude of original movies itself.
Disney has so many theme parks worldwide I don't even know the number. PLUS a cruise line.
Disney also keeps churning out Broadway shows.
Disney ALSO produces a ton of movies apart from the Disney channel.
Disney ALSO owns the ABC brand -- which means they're earning an income from ABC Family and ABC shows like Once Upon a Time.
Disney ALSO just bought the Lucas brand -- meaning they now own Star Wars which is one of the most extensive and successful franchises of all time.
And I know all of this without doing even the slightest bit of research, I am sure Disney has their fingers in more pots than even that.

Disney is not anywhere near collapsing or falling apart or even being remotely in danger and in even less danger of being culturally relevant. In fact, Disney is doing the miraculous marketing ploy of having multiple brands to appeal to the widest range of people possible.

Which, for the record, is NOT what Sierra did when they fell apart. Sierra tried to change their image to match with changing times, not to expand it.

I've got to ask -- and I apologize if this comes off as rude -- but what IS the preoccupation with the fall of Sierra, Perceval? It seems like every thread you make is about it -- and you're now also predicting the fall of major corporations (for what seems to me, flimsy reasons). I'm just curious what that's about.

It's simply that Disney is my point of reference when it comes to the fall of a corporate empire. I'm not big into corporate history,so I use it as my point of reference, and I'm still sort of in mourning over it anyway. I'm not saying Disney's going to die anytime soon, probably not for decades...But read the article I posted in this thread, I just worry for the future--a distant future, mind you, but the future nonetheless. Disney has been around for 99 years now; it'd be nice if it was around for another 100 or 200 more years. It'd be nice to have Walt Disney be Walt Disney a century or more from now. Would be nice if the company that old Uncle Walt started would come closer to it's roots and create more quality products in house, and perhaps in the future tackle big ideas (like Walt's original idea for EPCOT before he died).

[Blackthorne]

I don't think Disney is going to suffer the same fate as Sierra, no.


Bt

[Lambonius]

I don't think Disney is going to suffer the same fate as Sierra, no.


Bt

tl;dr

[snabbott]

[Blackthorne]

I don't think Disney is going to suffer the same fate as Sierra, no.


Bt

tl;dr

No.

Bt

[inm8#2]

As long as Disney isn't sold to CUC or Vivendi, they'll be okay.

[Lambonius]

I don't think Disney is going to suffer the same fate as Sierra, no.


Bt

tl;dr

No.

Bt

Now say it in wall-of-text form!

[snabbott]

I don't think Disney is going to suffer the same fate as Sierra, no.


Bt

tl;dr

No.

Bt

Now say it in wall-of-text form!

Noooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo!

[crayauchtin]

It's simply that Disney is my point of reference when it comes to the fall of a corporate empire. I'm not big into corporate history,so I use it as my point of reference, and I'm still sort of in mourning over it anyway. I'm not saying Disney's going to die anytime soon, probably not for decades...But read the article I posted in this thread, I just worry for the future--a distant future, mind you, but the future nonetheless. Disney has been around for 99 years now; it'd be nice if it was around for another 100 or 200 more years. It'd be nice to have Walt Disney be Walt Disney a century or more from now. Would be nice if the company that old Uncle Walt started would come closer to it's roots and create more quality products in house, and perhaps in the future tackle big ideas (like Walt's original idea for EPCOT before he died).

I did read the article.
It sounded like someone trying to invoke doubt in Disney's products based on nothing.
You want to talk about corporate collapses, why not look at Hostess which *did* collapse and has been around way longer than Disney?

[KatieHal]

The weirdest thing about that, to me, has been realizing that Twinkies will now become a dated reference. Not like Twinkies play a large role in my life or something, but it's still weird.

[GrahamRocks!]

Pssh- twinkies are popular. They'll be back, under a different brand name.

[crayauchtin]

Not even a different brand name. All Hostess' intellectual property should be going up for sale, someone is going to buy Twinkies -- recipe, name and all.

[Cez]

Nobody would let Disney collapse. Even if it did collapse, someone would save it. There's just WAY TOO MUCH money tied to it.

Sierra was nothing compared. Disney's value hardly ever grows old. Their IPs are invaluable without needing to be yearly updated.

[snabbott]

Not even a different brand name. All Hostess' intellectual property should be going up for sale, someone is going to buy Twinkies -- recipe, name and all.

And whoever buys them is sure to prohibit unionization.

[kyranthia]

While Disney has had some recent misfires at the box office (Mars Needs Moms and John Carter), I don't see Disney going away anytime soon.  They've had hits that carried the misses.  Plus they own a lot of properties that are still successful in their own right. 

Wreck It Ralph is doing pretty well.  Tangled did too. (Yes, Winnie the Pooh didn't, but releasing it opposite the last Harry Potter movie was pretty foolish.) 

If there were talk of Disney losing brands (like ESPN or something), then sure.  Also, theme park attendance has been decent.  Disney Parks had the top 5 most visited parks in the nation in 2011.  They are opening many new attractions in Disney World next month that are sure to uptick the visitor tally for 2012. 

Now, of course, anything could happen over the years, but honestly, there is nothing out there that says their downfall is on the horizon, I don't think.

[crayauchtin]

While Disney has had some recent misfires at the box office (Mars Needs Moms and John Carter), I don't see Disney going away anytime soon.  They've had hits that carried the misses.  Plus they own a lot of properties that are still successful in their own right.

And that's something that has always been true of Disney, not to mention every other movie-making company. Box office sales are virtually impossible to accurately predict and so it's virtually impossible NOT to have some flops.