A surprising tension has long been behind Disney’s success… and current signs suggest it is badly out of balance.
The Walt Disney Company has known their fair share of ups and downs. They remain one of the most successful entertainment entities in the world with a reputation for unparalleled excellence and creativity. At the same time, they certainly have gone through seasons of intense criticism and failed enterprises. Often, the overall health of the company is reflected in the state of their parks.
On the surface, Disney parks appear to be doing well. According to statements made at this year’s D23 conference, attendance is up, revenue is up, and demand is extremely high. In short, Disney’s bottom line looks good, particularly taking into account the success of services like Disney+.
Looking simply at a company’s bottom line can be deceiving, however…
Disney has been in a season of monetary success offset by increasing criticism from longtime fans. Troubling reports seeped out of the company’s creative departments, suggesting that morale was low. Both cast members and guests seemed to feel all was not well at the most magical company on earth, and announcements at the 2022 D23 conference regarding upcoming projects for the parks fell far short of Disney’s usual visionary flare.
Disney’s success has long hinged on a carefully curated tension held between the company’s creative departments and business minds. When these two components have been well-balanced, Disney has thrived, and we’ve seen spectacular examples of the excellence they are known for. When these elements fall out of balance, however, things begin to slide, particularly in Disney’s parks.
Our readers frequently cited frustration with Disney’s business model of late saying it feels like accountants are running the show. Disney’s leadership made no bones about their number one focus being the company’s bottom line. While this is reasonable to a point—a healthy company needs good business-sense to thrive—many feel Disney had crossed the line from savvy management to compromising on the core values the company was built on. We are hoping with the rehiring of Bob Iger that this will change…
But, has Disney gone too far and truly started to discard the philosophies the company has been built on, to the point the experience at their parks is becoming unrecognizable? Some troubling signs suggest this may very well be the case…
The brilliant partnership of Walt and Roy
Walt Disney was a visionary, a wildly successful entrepreneur, and a genius studio head. What many people don’t realize is that much of Walt’s success was intertwined in his sometimes tumultuous relationship with his brother, Roy.
Walt’s strength laid largely in his creativity. He had a unique blend of personality components that made him an ideal innovator. His contemporaries described that he could express himself as either a dreamer, a critic, or a realist, and you never knew which version might show up at a meeting. Particularly when exercising the dreamer, Walt liked to work as if money were no issue—there was no price too high to pursue a dream. The realist and critic balanced this out, but he still tended towards lavish ideas that left his more conservative colleagues staggered.
When asked about why didn’t focus more on the bottom line, Walt stated a simple business philosophy: “If we take care of our guests and our cast members, the rest takes care of itself.”.
Roy, on the other hand, was a savvy businessman, solid at keeping numbers balanced and in dealing with practicalities. He raised capital, maximized revenue, and oversaw the business end of things, freeing up Walt to dream. It can be argued that a large portion of Walt Disney’s ambitious ideas could have never come to pass without Roy’s acuity for management. Walt once even joked that he’d likely have landed in jail for repeated check-bouncing if not for his big brother.
The Walt Disney Company originally was run in two separate departments. Walt’s team handled the creative elements, innovations, and cultivating his bold visions for films, entertainment projects, and ultimately, Disneyland. Roy handled the accounting, budgets, investors, and other business elements. This model of synergistic diversification led to a healthy tension that produced great success. Walt generated fresh ideas, managing the details of projects to produce the best experience possible, while Roy made sure the company actually had the finances, infrastructure, and backing to make these ideas happen.
At times, this balance got out of whack and led to some heated moments between the brothers. They particularly clashed regarding Disneyland, which Roy found to be one of Walt’s more ludicrous ideas. At one point, Walt actually formed a separate company to develop Disneyland. When Roy realized Walt wouldn’t be dissuaded, he begrudgingly got onboard. In 1963, tensions hit a boiling point when Roy bought out Walt’s secondary company to prevent a shareholder split, a move that led to family turmoil and months of icy silence.
They ultimately worked out their disagreements and seemed to grow closer every time they overcame them. The balance worked, and we get to enjoy the end results of Walt and Roy’s unique partnership today.
The tension that makes the parks tick (or tank)
While no one has quite been able to replicate Walt and Roy’s dynamic, the mindset of balanced tension between creative minds and business realism carried on throughout Disney’s history.
This is often best seen in the state of Disney’s famous Imagineering department. Series like The Imagineering Story expounded at length about the times Disney has been able to achieve the impossible by keeping this balance. The dreamer, the critic, the realist, and the businessman all play a role in making the magic possible. Nailing this synergy resulted in the successful completion of the Magic Kingdom, Epcot, Disney’s Animal Kingdom, and Tokyo DisneySea (Disney’s Hollywood Studios had a little more difficulty but still turned out as a great park). Disney’s best attractions, their Renaissance film era, Disney Cruise Line, and more of their highest quality guest experiences were also birthed out of these seasons.
By and large, the seasons where Disney has struggled to maintain public goodwill had their roots in shifts towards budget cuts. During these times, company financials have stayed balanced but the parks experience flagged. The period following the unexpected death of Frank Wells was one of these: belt-tightening and creative shifts led to large-scale projects coming out underwhelming. The most famous examples were the rocky openings of EuroDisney, Hong Kong Disneyland, Disney California Adventure, and most notoriously, Disney Studios Park in France. All four of these lacked Disney’s trademark finesse, resulting in projects audiences rejected. Imagineers shared these were uniquely frustrating times where resources were tight, risk was discouraged, and creativity was strangled to the point of smothering morale.
Things didn’t bounce back until the balance was addressed—all four parks have improved thanks to course corrections and cultivating healthy creative departments given adequate funding. When Disney’s innovators were given space to dream again, Disney started entering into another age of explosive growth and increasing guest excitement.
The crucial role of Disney’s Imagineers
While Disney’s creative efforts involve a vast network of individuals and departments working together, a core component of the company’s success has long been the Imagineering department. These dreamers and innovators fill the dual role of conceiving new concepts for Disney’s parks and other businesses, as well as finding creative ways to make those dreams possible. While during healthy seasons, the Imagineering and business departments seem to work with impressive synergy, at times of increased financial pressure, Imagineering seems to have ended up at odds with those holding the purse strings of the company.
Several years prior to the pandemic, we examined trends suggesting the relationship between Disney Imagineering and Disney’s business oversight was becoming more strained (our writer, Dakota, did an excellent job on his analysis). The consensus was that Imagineers felt they were sometimes written off as traditionalists, and the implementation of major projects like MyMagic+ frustrated department members who felt they weren’t being heard.
It’s hard not to want to side with Disney’s Imagineers—after all, they play a crucial role in make Disney magic magical. That being said, both sides are needed—guest experience will ultimately tank if Disney builds monstrous projects that can’t be sustained or maintained. What I really appreciated about Dakota’s piece, however, was the crucial acknowledgement of what the Imagineers really are—the guardians of Disney’s identity and values. When the Imagineering department is flustered, that becomes reflected in the parks and in Disney’s overall business, because it can mean those core values are being undermined.
When the scales tip—Disney reorganizes its business
The frustrations of the current season largely took root with the arrival of the COVID-19 pandemic. The effects of this worldwide event are still being wrestled with today, and they struck Disney particularly hard in three major areas. The first hit was the extended closure of their parks around the world. The second was Disney Cruise Lines coming to a standstill. If that wasn’t enough, the film industry tanked as theater attendance was badly affected (something which still has not bounced back). Were it not for sudden increased demand for Disney+, who knows where the company would be today?
To make matters more complicated, this major event took place around the same time that longtime CEO Bob Iger retired, passing the torch to current CEO Bob Chapek.
We cannot fault Disney for the survival actions they took following the pandemic. It was an unprecedented situation, and desperate measures were necessary to keep things afloat. They lost billions of dollars in revenue, and some manner of belt-tightening was inevitable. Disney made an understandable sharp shift to bolstering Disney+, the most reliable of their revenue streams, rather than pouring too much risk into the parks.
The problem is that it appears the scales aren’t tipping back the other direction even though demand for the parks has re-surged.
Bob Chapek became quite the controversial figure as head of the Walt Disney Company. While Bob Iger earned his fair share of criticism, he had a certain finesse for balancing the different components of Disney’s business, and by and large, he managed to maintain at least some form of balance between the company’s creative and business arms. We are hoping this balance is going to be restored as restructuring begins.
In general, Chapek gained a reputation as more of a bottom-line sort of guy, and the shifts made to Disney’s management structure has shown a strong slant towards bolstering the company’s financial oversight while downsizing or limiting risk from creative arms. One example of this was the decision to consolidate financial decision making for all of Disney’s media and entertainment enterprises under a new department headed by chairperson Kareem Daniel. Whereas Disney’s individual media and entertainment branches used to be able to make budgeting and green-light decisions on their own, these decisions now have to pass through Daniel and the new department. While this shift hasn’t affected the parks directly, its indicative of the general state of Disney’s reorganizing philosophy.
An over-focus on the bottom line
We are now in a season where demand for Disney’s parks, streaming services, and other products is on the rise again, but the philosophical shifts of the last few years seemed stuck. The balance was off.
Frustrations continued to brew in Disney’s Imagineering department. Imagineers have expressed discontent that major projects are being badly trimmed, their full vision left unrealized—for example, how many ideas for Star Wars: Galaxy’s Edge have either completely stalled, vanished, or were rolled behind the paywall of Star Wars: Galactic Starcruiser? What happened to the rest of Disney’s Epcot overhaul, like the Disney Play Pavilion, Spaceship Earth revamp, or Festival Center? Morale also took a significant dip when Disney announced intent to move the department from its longtime California home to Lake Nona, Florida, news that blindsided many. For now, that move that has been delayed, most likely by tensions between Disney and the state of Florida over political spats.
We were hoping for big news during the 2022 D23 Expo, and while the company’s plans for their cinematic universes and Disney+ continue to be impressive, their announcements for the parks this year—particularly Walt Disney World—were a little underwhelming for some. Disney is finally nearing the finish line completing projects started under Bob Iger like TRON Lightcycle/Run and Moana: Journey of Water. Happily Ever After is returning, and Disney California Adventure is getting a new E-Ticket Marvel attraction, but other reveals weren’t as exciting or concrete.
Fans already knew about the reimagining of Splash Mountain into Tiana’s Bayou Adventure, and other announcements focused on the arrival of new characters to Disneyland (Walt Disney World continues to get passed over in this area) with an extra animatronic being added to the Haunted Mansion at Walt Disney World. Other ideas were pitched but remain in the realm of the theoretical for now–a re-theming of Dinoland USA to incorporate Zootopia and Moana (a curious mix), as well as new lands for Magic Kingdom themed around Coco, Encanto, and Disney villains.
While there’s potential, it’s a little nebulous, to say the least—not Disney’s usual panache for cohesive vision and excellence.
In Conclusion
It seems plain that Disney was in the midst of a season where the creative and business departments running their parks just weren’t balanced. There were too many signs at play of seeing mistakes repeated from the past, the Imagineering department seemed far from healthy, and most importantly, Disney was losing guest goodwill despite increased revenue.
From a business perspective, Disney parks seemed to be where the leadership wanted them to be. Chapek made it clear that the Parks Pass Reservation system was here to stay, being a surefire way for Disney to manipulate demand, and Chapek also made no bones about the fact that they are eager to increase prices to match that increased demand. He even went so far as suggesting that “superfans” like annual passholders who visit the parks as their “personal playground” wouldn’t likely see old benefits (or the sale of new passes) return anytime soon—and attempting to couch this as a compliment didn’t translate well. The overall focus was plainly on increasing Disney’s bottom line, particularly through price increases.
I’ll admit, the trends at Disney were troubling—specifically because it felt like so many of Disney’s longtime ideals were being compromised to the point it panged of greed. With the rehiring of Bob Iger we are really hoping that we will see changes to the aspects that have shifted the fragile balance and upset so many of the loyal Disney fans over the last couple of years. There has certainly been an air of optimism since the announcement and the stirs of excitement of what Iger could bring.
It was very discouraging to feel like Disney had become fine with pricing out and discarding the goodwill of longtime fans and I also felt for the Imagineering department. The effects of their efforts being throttled can be felt keenly across Disney parks right now. Can Iger tip the balance and return to Walt’s core philosophy? Can longtime loyal Disney fans once again wear a smile on their faces?
Walt’s core philosophy was simple: take care of the guests and cast members, and the rest will come together. I think it’s fair to say these are both areas Disney needs to stay mindful of and would do well to course-correct. You can manufacture demand to a point, but eventually, people will see through the veneer, and the overall value of the product is diminished. Burn too many bridges, and demand will fall with the company’s once-sterling reputation.
What do you think about the current state of Disney’s parks business? How can Iger and Disney win back lost guest good will? Let us know in the comments or on Facebook! Thanks for reading!
