Interesting Insights from Disney’s Chairman Ross

Disney chairman Rich Ross’ first year at the helm has been a busy one.  There’s a telling article by Michael Bodey in today’s online edition of The Australian [1] that caught my attention.  There are a couple comments Ross made during his recent trip to Australia that are of particular interest. One involves what he did say and one involves what he didn’t say.

In the first instance, Ross had this to say about fundamental changes in Disney’s media business, which greatly affect decisions involving potentially hundreds of millions of dollars in revenue.  Bodey quoted Ross:

"My mother now knows the box office for the weekend because of the news, and because of blogs people know our research tracking going into the weekend… It definitely changes the dynamic. It means entertainment properties become hits or flops faster. Alice in Wonderland and Toy Story 3 both became ‘flashfires,’ aided by social media and "affinity groups".

"I really believe social media's a multiplier now," he says. "If you have something big, and people are talking about it, people don't want to be left behind. You can go online now and know (as a consumer) whether you're with it or behind it."

He’s certainly not the only executive to both curse and kiss (depending upon the weekend) the enormous impact social media and instant communication has on consumer consumption of contemporary media products.  What I find interesting is that what he’s really alluding to is that the studios are facing huge challenges when releasing any property because the instantaneous impact of viral and social network communication can make or break that release in a matter of minutes.  How does the head of a studio like Disney take into consideration the fact that a rambunctious group of bloggers and social pundits can wield such power over the fate of a movie, game or music cd? Ross obviously isn’t ignoring that reality with his honest assessment of the social network communication landscape. 

And while it’s true most people don’t live or die by the reviews of others, there’s no doubt that “buzz” or vibe surrounding any property can swing people’s opinion, especially when the cost of a movie these days (especially a family outing with the kids) can approach a car payment.  [Note – you think I’m kidding?  $20 per head for prime-time 3-D film ticket, 6 people, soda and popcorn, maybe dinner afterwards, you do the math].  How much revenue does a studio lose when a family chooses to wait a few months to watch a film on VOD for $8 instead of at a theatre for $100? Snarky blogger boy/girl du jour is the new 800 pound gorilla in the corner.

The second instance involves Ross’ comments on Peter Jackson, who lately has been at the center of considerable controversy regarding production issues on the upcoming Hobbit feature.  According to Bodey, Disney was unwittingly dragged into the controversy when Jackson said they would no longer consider making films in Australia because of concerns in dealing with the production unions.  Ross was quoted as saying:

"Frankly, I don't know why anyone talks about anyone else's business," says Ross of The Hobbit's producer, noting Disney recently scouted here for David Fincher's proposed remake of 20,000 Leagues Under the Sea. We are certainly open to shooting here. This is a very big market for us, a top-10 market… Certainly, Aussies are very big supporters of the Disney brand. I never said we wouldn't (work here) so we were surprised someone spoke for us. We're open to Australia, but frankly we haven't been pitched something that makes sense…Production here is totally viable, the actual story is something we haven't got."

I can only imagine the iPhone tapping frenzy at Disney corporate when news of Jackson’s comments went viral. Whether Jackson was just taking a hard but honest negotiating stance with the unions by inferring Disney’s tacit support is now a moot point.  The movie is getting made and hopefully everyone is happy, though such negotiations are usually notable not for how happy parties are with the outcome, but by how long they have to live with the results until they can go at it again.  It remains to be seen what type of union peace is really at hand.

What is really interesting is what Ross didn’t say.  He didn’t say Disney wants to make films here but can’t without better union support.  He didn’t have to.  That’s the underlying position of any such studio, the leverage that they ultimately hold in the proceedings. It’s certainly nothing new. However, it’s Ross job to shepherd the entire Disney business, while Jackson only need concern himself with his current film.  Ross is paid to be prudent, tactful and sensitive in public.  Ross didn’t kick Jackson too hard in the shins, when he certainly could have – his quoted admonition seemed pretty eloquent and made the point without needless antagonism.  Then by saying that Disney is just waiting for the right property, Ross deflected the issue basically by saying “hey, bring me something I like and we’ll talk.”  A tough union labor issue is deftly morphed into a creative development issue.  Nicely done.

I’m impressed.  I read through so many dozens of corporate press releases and perfunctory industry “news” items each and every day and for so many, you wonder just what if anything was really said.  Tons of words but nothing of note.  AWN is as guilty sometimes as everyone else.  You just scratch your head and mutter “WTF.” However, I came away from reading this article feeling I’d actually gleaned something, which at my age, is no small feat.