Here's everything you need to know about the world of television for Monday, November 21st, 2022.
Wednesday will be the last day this week for the newsletter. I'll be back the following Monday with plenty of post-holiday news.
THE CASE AGAINST BOB IGER'S RETURN TO DISNEY
I spent a few years just before the first tech crash as a financial reporter. And of all the things I learned about the stock market, the most unsettling thing was realizing how much of the market's moves are driven by emotion.
Every Friday, I would do an early morning audio roundtable with different market analysts and for all of their access to inside information and volumes of sophisticated data, their decisions were often based on experience and their gut. "They don't pay me millions to be right," one chief market strategist explained to me off the air. "They pay me to be right more than I'm wrong."
This reliance on prior events and emotion is even more unsettling when you add the media business into the mix. Hollywood loves a good story and because everyone like to tell themselves the industry runs on relationships, people who should know better start buying into the kind of conventional wisdom that in wiser times might be seen as unlikely - bordering on ludicrous. Remember all of those stories in the trades arguing new Warner Bros. Discovery head David Zaslav was "talent-friendly" because he did a bunch of breakfasts at The Palm and went to a few private Hollywood parties? Yeah, that framing turned out to be not so accurate. And it didn't make much sense at the time either. But if there is anything Hollywood loves more than a story, it's a story that confirms their bias towards a subject.
These are all things to keep in mind as you read the cascade of glowing stories in the trades and major publications today celebrating the return of Bob Iger to Disney. The company announced Sunday night Iger was replacing Bob Chapek as head of the company just a year after leaving and hand-picking Chapek as his replacement. And given the subsequent raves from market analysts and the Hollywood commentariat, you would think Iger has come back and invented a way to produce a Star Wars TV series for less than $15-20 million an episode.
To be clear, Chapek made some fundamental mistakes along with some unforced errors such as not pushing back harder against Florida's so-called "Don't Say Gay" bill and telling an audience he doesn't believe adults watch animation.
Still, Chapek wasn't helped by the actions of his former mentor, who did everything from talk down Chapek's performance privately to allowing the announcement of his return to go out to Disney executives while they were attending Elton John's farewell concert at Dodger Stadium. An event in which Chapek had been expected to introduce John to the audience. In some circles, these kind of things would be referred to as "dick moves."
That might sound harsh, but it's difficult to know how else to characterize the behavior outlined in this piece from today's NY Times:
At public events over the past year — and in conversations with confidants as recently as this month — Mr. Iger repeatedly insisted that he had no intention of returning to Disney. At the same time, Mr. Iger had for months been privately railing against Mr. Chapek, according to several people who spoke with him.
He lamented Mr. Chapek’s seeming lack of empathy and emotional intelligence, which resulted in an inability to communicate with or relate to Hollywood’s creative community. Disney seemed to be losing its soul, he confided to one associate.
Perturbed about Mr. Iger’s trash talk, which made its way back to Disney headquarters, the headstrong Mr. Chapek responded by icing Mr. Iger out — rather than turning to the more experienced executive for advice. Mr. Iger, for instance, never got a call for help when Disney was criticized internally and externally this spring over its approach to legislation in Florida meant to prohibit classroom discussion of sexual orientation and gender identity through the third grade.
This seemed to further annoy Mr. Iger, according to two people who spoke with him.
At least publicly, Iger says he is "surprised" by the turn of events. In much the same way your best friend is "surprised" that he ended up dating your ex after he trash talked her to you for months until you broke up with her.
The industry's almost palatable glee over Iger's return also provides another reason for criticisms of Disney's strategic path. The argument is that Chapek focused too much on streaming, which continues to be a business with terrible fundamentals. While at the same time not trying to sufficiently prop up the higher-margin linear & theatrical businesses.
This argument sounds great at first, but it generally gets shakier when you start asking some basic questions, such as "assuming you're correct, what would you have done instead? I'm not a huge Chapek fan, but let's remember the challenges he was facing when he took over from Iger:
1) Like everyone else in the TV industry, Disney's linear business is increasingly in decline. Yes, it's still very profitable & it's never going to go away. But depending on that as your future is like IBM staking its future on mainframe computers.
2) Disney's audience is increasingly disengaged from its primary points of contact. Linear TV ratings are plummeting, more time is being spent on YouTube & other social media. Disney's fighting for its audience in a new way. And for all of his savvy moves, Iger left Disney ill-equipped as an organization to nimbly react to the fast pace of changes hitting the entertainment industry.
3) It's increasingly clear the theatrical business has changed. It's not going away, tentpole movies are doing fine. But even in flush times, Disney struggled with mid-level titles and that's just the type of movie that continues to struggle when first released into theaters. Sure, it's easy to argue nearly every movie should receive a theatrical window on the off-chance some mid-tier movie catches fire. But depending on randomness to determine the success of a release seems like a financially unwise pyrrhic victory.
How challenging is the theatrical business right now? Consider this horrifying statistic:
Terrifier 2, a gory indie slasher film that grossed $10.5 million in October, currently has a higher box office total than She Said, Focus Features' Tar, United Artists' Till or Searchlight Pictures' The Banshees Of Inisherin, all films predicted by awards gurus to have a significant presence on the Oscars nomination list.
4) Yes, right now the fundamentals for streaming are terrible. It's never going to have the margins of linear TV & if there's a way to build the business without losing a lot of money for 3-5 years, no one's found it yet. But what option do you have? And that's the answer I never hear from critics. Okay, you don't want to spend at current levels on original streaming content. And you say you don't want to chase subscriber numbers. But you do want to increase revenue and slash losses. So how are you going to do that? And don't say consolidation. Because if we have learned anything in the streaming era, it's that size provides many things. But more profit and lower costs is not one of them.
5) You either suck it up & build your streaming business for the future. Or you become Sony & just license everything out to the highest bidder. Except that Disney can't do that, because it needs touchpoints with its younger audience. And that means you need to have an aggressive presence on streaming. Because that's where the younger audience increasingly lives. It requires a presence that allows you to use the streaming platform (or platforms) as both an eventual profit center as well as a sales funnel for your more profitable businesses. And the only way to do that is to own your streaming platforms.
These are just a few of the challenges now facing Iger, but scanning the industry coverage today, there doesn't seem many people who doubt that this is the greatest executive move of the last decade. Some journalists (like The Ankler's Richard Rushfield) see Iger's return as another indication that those big, bad tech industry people are finally getting what they deserve:
There's something pretty satisfying though of seeing — as the tech founder icons flail and humiliate themselves more across the stage every day — a real sense of an adult is on the way in the return to Iger. Not because his every choice was perfect and he’s not without flaws. But because he just understands what the business he’s in is, and what people want from it. He understands they are selling stories most of all and that it takes creative people to make those. He gets that the well of stories and public ties need to be refreshed, renewed and added to constantly. Compared to the snide sneering of Elon's Twitter adventure, or Mark Zuckerberg's willingness to wreck his whole company to pursue his Metaverse fantasies.
I think this sentiment says more about the insecurities of people in Hollywood than it does about why Chapek failed. Disney's stock didn't plummet because there wasn't enough great new content being created at Disney in recent years. And while Chapek's personal skills are best-described as "self-consciously awkward," I fear Hollywood is once again confusing people skills with the ability to deftly respond to unexpected market upheavals.
On another note, I'm amused by the number of people who talk about how much Iger values great content and yet he is also the guy who oversaw the expensive acquisition of 20th Century Fox, then stuck most of its impressive catalog in the archives so he could strip-mine a few pieces of popular IP while getting a competitor out of the way. Iger seems likely to reorganize Disney's executive flowcharts and while I haven't been able to confirm it enough to report it out, there is at least one big creative announcement in the works.
But does Iger have the specific expertise required to maximize Disney's streaming business? Based on what he has said publicly in the past, I am more than skeptical.
Iger is a smart guy. He knows how to schmooze, he knows how to close a deal. But the business world is filled with successful CEO's who returned one too many times and had a skill set that didn't match the changes in their industry. Maybe Iger is going to be the next Steve Jobs - who returned to his beloved Apple and thrived. I suspect Iger might find his return to more closely follow the path of returning Starbucks head Howard Schultz, who isn't just struggling with moves in consumer demand he doesn't understand. He's tarnished his reputation by going from being a successful industry beacon to just another CEO struggling to get out alive.
For all of the great people working at Disney, I hope my take on this is wrong. But that doesn't mean I'd invest any money in the company based on Iger's return.
Good luck to us all.
ODDS AND SODS
* Chrisley Knows Best stars sentenced to multiple years in prison on Federal fraud charges: Show cancelled by USA Network.
* Monday afternoon, Bob Iger sent a memo to Disney Media & Entertainment Distribution employees noting that Kareem Daniel, the company’s chairman of media and distribution, is moving on amid a major restructuring.
* Avatar 2 is so expensive it must become the "Fourth or Fifth Highest-Grossing Film in History" with over $2 Billion just to break even.
TWEET OF THE DAY - FOR POWER TWITTER USERS
WHAT'S NEW FOR MONDAY :
Below Deck Season Premiere (Bravo)
Dancing With The Stars Season Finale (Disney+)
Death In The Dorms (Hulu)
Kids Baking Championship: Gobble Goodies (Food)
Love & Hip Hop Season Finale (VH1)
My Little Pony: Winter Wish Day (Netflix)
No One Can Hear You Scream Season Finale (Investigation Discovery)
Pounding Instincts Series Premiere (Peacock)
Storybots: Answer Time (Netflix)
The Life We Share Series Premiere (Peacock)
The Vow Season Finale (HBO)
Click Here to see the list of all of the upcoming premiere dates for the next few months.
SEE YOU MONDAY!