News

Disney Chief Calls For Film Downsizing

By Robert Marich
    June 7, 2008 – Walt Disney corporate president and CEO Robert Iger told an investors conference that Hollywood is producing a glut of films, which is making box office success dicey even when a good film gets a fine marketing campaign. His plan is to have Walt Disney studios make fewer films but investing more in each one to break through the clutter.
    In a transcript just posted on the Disney website, Iger told the Sanford Bernstein & Co. investor conference that Disney plans to distribute 10-12 major titles a year, because heft is required to succeed in today’s domestic theatrical market.
    Typically, a studio markets 14-20 major titles annually (excluding releases from their specialty arms). According to BoxOfficeMojo, Disney was above Iger’s projected range in recent years, having released 19 studio films in peak years of 2000 and again 2003.
    “I think there are too many movies being released into the

Robert Iger

marketplace, and it shouldn't surprise anybody in the business why there is so much failure, and why the returns on investment in that business are so modest,” Iger said. “There's just too much out there. And they all can't possibly be good enough, or marketed well enough, to succeed or to drive good (financial) returns.”
            He continued: “We have an interesting situation right now with Caspian, which is the second installment of Narnia -- which is Disney branded -- and I believe creatively is actually better than its predecessor. And it’s not doing as well as its predecessor did, or actually as well as we had hoped. I think it was well-marketed, but to give you an idea -- you all know how competitive it is."
    Iger also noted that Disney’s The Chronicles of Narnia: Prince of Caspian landed in a tight marketplace, being sandwiched between two big releases from Paramount: Iron Man and Indiana Jones and the Kingdom of the Crystal Skull.
    “ And just because (Narnia) is from Disney, and just because it’s a good film, doesn’t guarantee that it’s successful,” he said. “That is very telling, in my opinion, and sobering. And it really – it’s a good lesson.”
    Regarding Hollywood’s increased output, there was no specific explanation. But an influx of institutional private equity funding has pumped up Hollywood with $10 billion in production funding since 2004. Trade group the MPAA counted 590 films released in 2007, up from 449 in 2002.
    Iger, 57, is a longtime Disney executive whose career began in its TV operations, which include ABC Television and ESPN. Since he took the Disney corporate top spot in October 2005, Disney’s stock and image has improved dramatically.

For full text, click link below.

www.marketwatch.com/news/story/iger-narnia-falls-victim-competitive/story.aspx

corporate.disney.go.com/investors/archive.html