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by Ken Pellman (archives)
May 15, 2001
Is it time the Walt Disney Company reinvented itself? Ken has a plan.

Isn't it time The Walt Disney Company reinvented itself?
Attrition, Layoffs, and Reorganizing - Oh My!

The Bad News
It bears one of the strongest brand names in the world. It has been held up as an example of excellence and innovation in many different areas. An organization that didn't exist until over two decades into the twentieth century is now of the most influential corporations in the world and among the largest media, entertainment, & leisure companies ever. The Walt Disney Company has many profitable businesses.

And yet, as you probably know, The Walt Disney Company is trying to slim down by about 4,000 positions. Executives were hoping to get as far to that goal as possible through a "Voluntary Separation Package" offered to encourage some employees to quit. Once the deadline passed for accepting that offer, the depressing task of determining who else should be "let go" to make up the remaining cuts began.

There have been huge changes in Disney's Internet strategy and operations, resulting in many layoffs there. Disney's newest theme park in Anaheim was opened in February (in case you've been living under a rock), a larger park will open in Tokyo in a few months, and park openings are often followed up with layoffs at Walt Disney Imagineering (WDI), the company that oversees such developments.

Furthermore, the folks at Walt Disney Feature Animation (WDFA) have been having a rough time lately, as pay reductions were announced for just about anyone who will still be on staff after a large percentage of their workforce is sent packing. Analysts point the rising cost of producing animated feature films, the diminishing competition, and the fact that no production since The Lion King has come close to duplicating its financial success.

Walt Disney Feature Animation - The Heart of Disney
The resignation to reducing WDI and WDFA saddens me. It may make sense on paper in the short term, but there is another way to go that will be better for the long term. Yes, it costs a lot of money to produce a good animated feature, making it hard to recover the cost of production and marketing at the box office. (Remember - theater owners get some of the take.)

But think of it this way:

What if Walt Disney Feature Animation was a separate company? What if every time some part of The Walt Disney Company wanted to use a film or its characters, music, settings, or other elements for something, (like oh, a video release of the film, a video sing-along, a cheapie video sequel, an album, a plush doll, a book, a pin, clothing, a sculpture, a parade, a cheapie animated television show, a ride, a theme park or cruise ship show, a Broadway show, a commercial, etc. - get the picture?) they had to pay huge licensing fees to WDFA? An animated feature generates more revenue than just the box office numbers. The animated features have traditionally been the heart of Disney.

Let's face it - not nearly as many people would buy those direct-to-video sequels, which are profitable because they are made with lower quality, with less money in other countries, if the high-quality theatrical feature film made by WDFA or the animated shorts of yesteryear hadn't earned a place in their hearts or the hearts of their children.

There would be no Fantasmic!, there would be no "Disney's" Electrical Parade to draw people to a new theme park with soft attendance numbers, there would be no Fantasyland, there would be a lot fewer characters walking around the parks giving kids fits of excitement just by waving to them.

Even a film that does not become a huge hit at the box office can still be financially worthwhile if the whole of the film and most of the individual elements were strong and high-quality. Many of us have grown up on Disney animated features that went nowhere on the first theatrical release, yet we spend our paychecks on related merchandise decades later.

The Alternative - Overhaul the Corporation
Instead of this cycle of slow growth and abrupt layoffs, Disney should take advantage of the diverse businesses it is now involved in to put all of those WDFA and WDI folks to work on more than just the same type of projects they've been doing for years.

Much of the corporation has been more or less organized as of late under a few separate vertically integrated structures. Walt Disney Imagineering, for instance, has traditionally been involved in creating theme parks and resorts, and has been grouped under Paul Pressler with the divisions that operate the theme parks and resorts. However, with growth and acquisitions, especially CapCities / ABC, Disney is so much more than just a studio and some theme parks. It is more of a whole entertainment, media, and information company now. WDI should be put to work on more projects outside of the tradition theme parks and hotels… stuff that might not fall under Paul Pressler.

And for goodness sakes, animation is everywhere these days - special effects in "live action" films, commercials, news stories, television programs, video games, theme parks, big screen features, and web sites. Disney's forming of The Secret Lab was a step in the right direction.

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