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 Bob Chapek - What Went Wrong? 
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Extraordinary

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Post Bob Chapek - What Went Wrong?
Couldn't resist. Let's come up with all the reasons behind why this box office run CEO run didn't meet expectations.


Mon Nov 21, 2022 2:46 am
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Post Re: Bob Chapek - What Went Wrong?
I honestly always want to believe that in these multimillion dollar companies, the people making big decisions have the best advisers in the world and so whenever a decision is taken which I personally consider foolish, I'm always like "surely there's a reason here which I just don't get".

However, when Disney decided to send Turning Red straight to D+ this year, I finally understood how wrong I was. Everyone can make frigging dumb decisions. Pretty much anyone could tell you that sending Turning Red to Disney+ in March 2022, a time when most families were FINALLY feeling comfortable to go to the theaters was a bad decision. Movies with budgets in excess of $150 million cannot survive through streaming alone. And beyond that, the brand of Pixar had already been heavily devalued but at least most people understood that it was a pandemic anomaly. But releasing that movie on Disney+ effectively made most families relegate Pixar to the equivalent of those direct-to-tv movies from yester years. Not a brand worth bringing your family to the theaters to. At the time, I'm sure it made the shareholders happy, afterall the subs to Disney + rose then, just in time for the quarterly reports. But Chapek's had doomed one of the flagship franchises of the Mouse, possibly irremediably.

He put all of the studio's eggs into the same (streaming) basket, but now the chicken are coming home to roost. Streaming has proven to be a bubble not unlike the dot com bubble from a couple decades ago. It lured everyone during the pandemic but it's obvious now that you can't survive without theatrical revenue for these big tentpole movies. Streaming can complement them, be another ancillary revenue source just like home video was at a time, but it can't replace the box office. So yeah, Disney+ won't wrong, every decision Chapek made failed because he was way too fixated on streaming. Now despite having over 200 million subs, the platform is still not profitable. How could it be? Over 40% of those subs are in India where it costs $1.2 per month. What now? Will he keep increasing the price on North American customers? That won't work, just ask Netflix. So yeah, blame Disney+

>The whole Scarjo fiasco? Happened because he wouldn't negotiate the actors' contracts with respect to Disney+ like Warner Bros did. Blame Disney+
> The underperformance of Marvel phase IV? Many reasons but among them, the dilution of the brand by releasing 17 series on D+ in the span of a few years some which you absolutely have to watch in order to follow the movies. Yeah, people are tired of that.
> The general underperformance of movies in overseas markets? You guessed it, blame D+. Japan, one of the best Disney markets in the past is now all but dead to them since streaming has made it impossible to have favorable release patterns (Corpse can probably explain this part better). Then you have Strange World which was always going to bomb but not having the French market because of streaming shenanigans surely won't help.


There are other "things that went wrong" obviously but I believe that only those related to Disney+ are entirely Chapek's fault. Things like being cheap on parks imo cannot really be blamed on him. Because a pandemic happened and cuts had to be made, it's just unfortunate that he took over during that time. Similarly, failures related to politics (Disney's disastrous clash with Desantis over Don't Say Gay/Light Year's kiss scene) or geopolitics ( China banning all MCU movies) were beyond his control.

So what went wrong? Disney+ went wrong.


Mon Nov 21, 2022 3:57 am
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Post Re: Bob Chapek - What Went Wrong?
Great post. Agreed.

It's mainly all the streaming D+ decisions and oversaturation of franchises (which Iger was also responsible for i.e. .... Star Wars release strategy)

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Mon Nov 21, 2022 7:08 am
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Post Re: Bob Chapek - What Went Wrong?
Hopefully he can fix this dang company. Everytime I watch s new substandard Disney product it feels more and more like stockholm syndrome


Mon Nov 21, 2022 9:16 am
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Post Re: Bob Chapek - What Went Wrong?
He wasn't in there super long but the choices of which movies to release streaming vs theatrical have been bad and the current time is critical for Disney to start having a plan going forward that's not just Marvel, Star Wars, Pixar and remakes.

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Mon Nov 21, 2022 9:38 am
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Post Re: Bob Chapek - What Went Wrong?
Disney+ is definitely the biggest problem he had because it has even conditioned me (mostly my husband) to just wait on films to go on there. Why pay for it otherwise? We've seen their catalog a million times, own much of it, and these "good not great" 6 episode streaming series aren't really an incentive on their own. Saving money spent at the theaters to wait on the Disney+ release is where the value of the platform is in our situation.

I can't convince my husband to see Wakanda Forever in theaters, for example, because it's almost certain to go on Disney+ within 45 days or so. The thinking is sort of wasting the Disney+ subscription (the value). If you see it in theaters, you're paying for that as well as Disney+ but without something new to see on the latter.

I don't have all the data, but in my mind, the theatrical window should certainly be closer to 90 days. We'd very likely go see Wakanda Forever if it wouldn't be on Disney+ until February. Chances are it goes around New Year though (the 45 days) unless they change that strategy suddenly.

Same situation with Strange World. I don't want to see that one as much in theaters, but it does interest me and would have been a film we'd have gone to theaters for in the first week or two. Now? We're fine waiting ~45 days (maybe less in this case) to get the value out of the Disney+ subscription.

And, interestingly enough, we'd TOTALLY have gone to theaters for Turning Red and Hocus Pocus 2. (At least 2x for Turning Red.) So, pretty sure they lost a LOT of theatrical revenue on them.

And yes, Disney+ has killed Disney in Japan (often their #1 (or #2) overseas market). They went from being the second biggest distributor in terms of revenue (only behind local Toho) for over a decade to like seventh for the last 3 consecutive years now. None of their films have earned the rough JPY equivalent of even $100m there since 2019. I don't even think they have ONE film among the Top 50 from 2020-today. Theaters boycotted their films due to going to streaming which killed them in 2020/2021, and now (2022) they're suffering because if they don't open day-and-date (generally a poor plan in Japan), they're not going to open at all because when they go on Disney+, theaters drop them immediately or soon after. They're *still* performing ~80-90% below their usual levels...

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Mon Nov 21, 2022 10:45 am
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Post Re: Bob Chapek - What Went Wrong?
Somehow ... Bob Iger has returned.


But for real, making Turning Red a tv movie was the worst. That would have been a huge hit and it wouldn't have conditioned people to just wait for D+ on Lightyear and Strange World.


Mon Nov 21, 2022 1:42 pm
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Post Re: Bob Chapek - What Went Wrong?
So apparently Chapek only found out on Sunday likely barely before the news broke publicly.

Also saw this in a CNBC article:
Quote:
Disney chose to rehire Bob Iger as chief executive after receiving internal complaints from senior leadership that Bob Chapek was not fit for the job


Thinking about senior leadership who still has sway at Disney, Jim Morris (general manager & president) Pete Docter (Pixar); Kevin Feige (Marvel), Kathleen Kennedy (SW) probably.

Though I'm sure Pixar's team has been complaining for a while. I don't think it's a coincidence that this all happened when BP2 had its second weekend hold. My gut tells me only Feige having serious concerns would be enough for the board to finally take action here. Pixar / SW have been struggling for a while but Marvel's more recent. BP2's box office will be significantly down but the bigger issue was it felt like a non-event despite the first being a pop culture phenom. That could have been the last straw for Marvel building on strike one of how Chapek treating ScarJo (Marvel talent).

Lightyear + Turning Red didn't do it -> Pixar has less sway.

String of SW messes didn't do it -> SW feels like its in a galaxy far, far away.

Marvel -> Still delivering massive box office but moviegoers rapidly getting more bored of them or having a less event factor to the entire Phase 4. Hasn't felt like it was close to a liability until now.

So thanks Kevin Feige if my theory is indeed true!

UPDATE: Also read that this weekend was the weekend for the renewal for annual subscribers on Disney+. Maybe the #'s were horrendous and proved how bad the strategy was since Chapek went all in on it?


Mon Nov 21, 2022 1:53 pm
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Post Re: Bob Chapek - What Went Wrong?
Combination of things, some of which he had control over, some of which he didn't.

What he controlled: ScarJo lawsuit + Florida conflict were horrendous for PR. Obviously some questionable decisions with streaming vs. theatrical. Animation in particular ala RED. General decline in content quality (started with Iger though) ala BUZZ and now Disenchanted. Unpopular decisions with pricing in parks. The mostly horrible earnings report recently.

What he didn't control: Covid launching and lingering, and Iger-related problem: Iger basically never going away, Iger over-saturating Marvel and Star Wars, etc.

Unfortunately for Chapek, things go to a point where it was a serious problem and its clear after working with him, they didn't have confidence in his ability to improve.

Iger also has a serious issue with Disney resume now in terms of succession. What a mess. Other than Tom Staggs, who was fired/left, he never had a true number two or heir apparent, never groomed anyone, etc. It is remarkable they let that go on for as long as they did in hindsight. The board basically had to choose between Kevin Mayer and Bob Chapek, and choose poorly obviously, but there should have been a better candidate internally given how successful they had been for so long.

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Mon Nov 21, 2022 6:09 pm
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Post Re: Bob Chapek - What Went Wrong?
They had just renewed his contract and new he is booted. I was surprised to see him getting that at all.

Let us see what Iger is going to do this time around. Can he delay streaming date for Wakanda. Would he say something like no movie will hit streaming for 3 months or so. That would give some boost to theatrical business. Hopefully he can rejuvinate their animation division which is in terrible shape. Strange World is another movie that is going to underperform big time. On Marvel they have to slow down the sheer amount of content across theaters/D+. its impossible to build hype when you have something new every other month or so. 2022 they had big guns and 2023 looks weak beyond Guardians 3.

Star Wars I am not sure will be able to go back to its peak in the near future unless they put all SW content in cold storage and then make another trilogy in 5 years. But that is unlikely to happen.

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Mon Nov 21, 2022 6:28 pm
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Post Re: Bob Chapek - What Went Wrong?
Iger's biggest strength arguably is basic recognition that quality is king and they have to invest what is necessary to create products consumers deem as high quality. Yes there will be the occasional RISE OF SKYWALKERs but in general.

Iger is also quite apt at not overthinking obvious opportunities, which some studios insist on doing. For example, no doubt Iger is going to leverage Disney+ successes for bigger thing with theatrical, i.e. I would certainly bet we will be seeing a Mandalorian movie at some point, possibly an Andor movie too.

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Mon Nov 21, 2022 8:05 pm
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Post Re: Bob Chapek - What Went Wrong?
Iger made the mistake of rushing out the SW films year after year. It was clear as day this was a mistake when they announced the sequels in Nov 2012 and later Bob admitted it too.

They also mis-handled most of the Fox product they inherited which was another misfire.

But all that pales in comparison to the D+ streaming debacle. The good news about D+ is that some of their shows are doing well (mainly SW and some Marvel) - so they need to nurture this but backtrack on streaming of once theatrical films. The balance is key.

Overall, there will be a major strategic rethink needed here. All 4 of their pillars (Marvel/Pixar/SW/Disney Anim) have been damaged or in decline to some extent and this needs to be arrested.

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Mon Nov 21, 2022 8:57 pm
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Post Re: Bob Chapek - What Went Wrong?
Moved to the Cinemania forum.

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Wed Nov 23, 2022 1:53 pm
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Post Re: Bob Chapek - What Went Wrong?
More is coming to light on what ultimately booted Chapek.

The WSJ reported a day ago apparently he was relying on McKinsey (the major management consulting company) to guide Disney restructuring.

The consulting company suggested they centralize control of major spending decisions, triggering an uproar from top creative executives at the entertainment giant.

So a management consulting company was telling Disney how they should market and structure their content marketing. Disney's 100 year sweetspot is knowing how best to market their content.

Chapek was fully going along with it as was the CFO.

https://finance.yahoo.com/news/mckinsey ... 16155.html


Sun Dec 04, 2022 12:29 am
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