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  1. #1

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    Layoffs at Disney (Reuters)

    Interesting article at Reuters that layoffs will be coming to Disney corporate (mostly the studio and interactive divisions). Even though profits are great, management feels the company needs to be leaner after spending all the money on the parks, cruise line ships and resorts, and intellectual property acquisitions:

    Exclusive: Disney looks for cost savings, ponders layoffs - sources | Reuters

  2. #2

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    Re: Layoffs at Disney (Reuters)

    Magic - shmagic - it's just a business. You exploit the parts of the business that make money to maximize profits and cut the parts that don't.
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  3. #3

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    Re: Layoffs at Disney (Reuters)

    I'm not sure why they want to cut down the number of films. It's the films where the risk is. If you make more you can diversify the risk. When you increase number of films you increase the chance that you make blockbusters.

    The studio is down because it didn't make many stellar films this year. Thier problem was thier movies were topped by Avengers which performed great. Then at a third of Avengers was Brave, then Wreck it Ralph, then Lincoln, then thier 5th biggest movie, John Carter.

    If you take those movies in an comparison to other years, Avengers leads, but Brave is somewhere around 15th and Wreck it Ralph around 25th.

    If you look at an list of best performing movies ever, Disney own the 3rd spot for Avengers, and 8,9,10. That's 4 of the top 10. A good share since there are 6 major studios competing for those spots.

    You can also look at this past year as the year Disney had only one sequel, the Avengers. Look at how Bat Man, 007, Hobbit, Harry Potter, Priates, Toy Story, Spider Man, and Lord of the Rings, dominate the mega movies, with franchises. For the most part, those franchise movies crushed the competition. This wasn't the year of another Toy Story, or Pirate film.

    I think the studio is getting kicked when its down. But will rebound, this year because of Moster's Inc, and Iron Man. Throw in Oz, Lone Ranger and Frozen, and it could be a huge year in Burbank.

  4. #4

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    Re: Layoffs at Disney (Reuters)

    It baffles me that they spent a bundle on a cruise ship and the Aulani resort. These seem like luxuries for a better economic climate. I have no facts to back that, it's just my knee-jerk opinion. This doesn't seem like a wise time to invest in those of all things.

    Then the article said "Disney executives warned in November that the rising cost of sports rights and moribund home video sales would dampen growth."

    This seemed even more confusing because in bad economic times the things that do well as the more common forms of entertainment. DVDs, sports, video games. The smaller and more affordable things. ....or maybe that's just the point. Maybe these medias in general ARE doing great, so great that the competition for Disney's slice of that pie ( DVD, sports, games ) is huge.


    Then there's this quote too.

    "Cuts are most likely at the studio, said two of the three sources, where the strategy has changed to focus on fewer films and rely more on outside producers such as Steven Spielberg's DreamWorks studio, which finances its own films and pays Disney a fee to market and distribute them."


    No. God no. No, no no... Please no. I thought we were done with Katzenberg. The guy's out of ideas and floating on the creative strengths of his workforce, a workforce being populated by more new guys and less old pros, pros who've already left and gone elsewhere. This quote concerned me the most.
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  5. #5

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    Re: Layoffs at Disney (Reuters)

    Katzenberg is in charge of Dreamworks Animation which Disney does not distribute.
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  6. #6

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    Re: Layoffs at Disney (Reuters)

    Quote Originally Posted by fifthrider View Post
    It baffles me that they spent a bundle on a cruise ship and the Aulani resort. These seem like luxuries for a better economic climate. I have no facts to back that, it's just my knee-jerk opinion. This doesn't seem like a wise time to invest in those of all things.
    That's not quite true. The first thing is DVC is selling well. But for both DVC and DCL you don't want to expand when the economy is best. Ideally you do it when it's at its worst, and cheaply afford the labor and materials. Then it's operating when the economy rises, which is what was predicted when they started those projects.


    Then the article said "Disney executives warned in November that the rising cost of sports rights and moribund home video sales would dampen growth."

    This seemed even more confusing because in bad economic times the things that do well as the more common forms of entertainment. DVDs, sports, video games. The smaller and more affordable things. ....or maybe that's just the point. Maybe these medias in general ARE doing great, so great that the competition for Disney's slice of that pie ( DVD, sports, games ) is huge.

    The problem is that the sports clubs, be it the NFL, NBA, Nascar, NHL.... all sell their broadcast rights, and have been asking for much higher amounts for those rights. Because of the already high price of ESPN to cable providers, when Disney's costs go up it's harder to pass the costs on to the cable providers.

    The problem with the home video sales, a huge cash cow when you own the video and sell them for $25 what costs a couple bucks to make and package, is they have been replaced. Streaming videos. What's worse is I sense uncertainty. Disney has made a deal to move content to Netflix, and is part of the Hulu trifecta. It's moving it's content from what it owns to a competitor.



    "Cuts are most likely at the studio, said two of the three sources, where the strategy has changed to focus on fewer films and rely more on outside producers such as Steven Spielberg's DreamWorks studio, which finances its own films and pays Disney a fee to market and distribute them."
    Quote Originally Posted by KingEric View Post
    Katzenberg is in charge of Dreamworks Animation which Disney does not distribute.
    SKG, has been split up, roughly into live action, and animation. This was done because the animation had high costs and lost money, so it was spun off.

  7. #7

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    Re: Layoffs at Disney (Reuters)

    Disney corporate is composed of several businesses which need a long term viewpoint. Of course, the parks need investment which often takes a couple years to pan out. The cruise industry has a large investment at the beginning but then pays off in the long run. When a company is public, it is expected to produce growth each quarter, if not then each year. Motion pictures are a roll of the dice. DVD sales are only going to plummet even move. That was a cash cow while it lasted but cannot be expected to always exist in a changing technology world. Film was a cash cow for Kodak for decades, but eventually technology changed. Disney as a company is doing great overall, so I feel that the desire to show growth in income by cutting expenses, is a foolish decision, which will deduce earning in the next three to five years.
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  8. #8

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    Re: Layoffs at Disney (Reuters)

    tis business..

  9. #9

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    Re: Layoffs at Disney (Reuters)

    I was expecting this months ago. when you replace the head of the studio, you evenutally replace his minions. This "cost cutting" move is really just that. Getting rid of people who aren't producing.

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