Smash Cut #5 – The Disney Monopoly

The Disney Monopoly

If you know your Hollywood studio history, you are aware of the incredible influence that Disney has had with regard to how we experience movies – and honestly, it shouldn’t come as any surprise even if you know nothing about the history. They revolutionized the merchandising model, have continued influence on copyright legislation, popularized the studio theme park, and are likely responsible for more nostalgia than a literal time machine could produce. Though the studio has had plenty of extreme ups and downs, today they appear to be stronger than ever.

But, are they too strong?

Not even measuring tape can stop them!

Webster’s defines a monopoly as: “exclusive ownership through legal privilege, command of supply, or concerted action.” Now, admittedly, Disney obviously doesn’t have a strict monopoly on filmmaking. There’s nothing stopping you or anyone else from going out and making a movie. But that second part, “command of supply,” is important and we should be aware of it.

It’s probably important that we first have a solid idea of what Disney actually means. For starters, in 2016 they generated a little over $55.6 billion. For comparison, NBCUniversal brought in just over $31.5 billion (including televised Super Bowl and Olympics). Under Disney’s belt are its many owned companies, of which include Pixar Studios, Buena Vista, Marvel, Lucasfilm Ltd (and all that includes), Touchstone, Dreamworks, ABC Television, A&E, Hollywood Records, ESPN (of which they own 80%), E! (part owner), Hulu (30%), and Studio Ghibli (American distribution only).

And that’s just the names you’d recognize.

While that may or may not seem like a lot when compared to companies like Comcast or Alphabet (Google) have under their belt, there’s an important distinction here and it comes in the form of three names: Marvel, Pixar, and Star Wars.

Poor George…

I’d like to bring up a short anecdote about my time working marketing at a major theater chain. We were constantly shipped excessive amounts of marketing materials – posters, banners, bus shelters, and standees. No distributor ever contacted us demanding that we put up everything that we were sent from them – they understood that we received a lot from many sources and only had so much time and physical space. But Disney would call.

One time in particular stands out when I received a call from a woman in their marketing department. She asked me why we didn’t have this gigantic standee up for an upcoming WINNIE THE POOH movie.

Basically a 6-foot tall cardboard cut-out of this image.

I told her we had it, but that it wasn’t out. She asked why and I told her that it likely wouldn’t do too well at our theater and that I used the space for other films I felt would do better. The response I received was, “That answer is a little disappointing.” I said, “I’m sorry you feel that way.” I’m a bit of a smart-ass.

What I learned from this exchange and conversations that followed it was that Disney has a strong hold on major exhibitors like the theater where I was employed. Though nothing came of it, it was possible that Disney could have forced my hand by threatening to no longer play their movies at our theater (or even the whole chain) if I didn’t immediately put their standee up – thereby tearing down a standee that was already in place. In fact, it’s this very kind of situation (and this very company) that has led to managers in this chain no longer being allowed to watch free movies, since Disney asked for payment for every empty seat that was given to employees.

This implies very strong grip that studios like Disney have on major theater chains. And this was back in the mid-2000s, before Disney owned Lucasfilm, Marvel, or Pixar. Imagine the kind of power they hold now.

So, how does this translate into a potential monopoly?

It’s almost like they knew this was coming…

I refer you back once again to the Webster’s definition and that part about “command of supply.” Disney would never explicitly say that a theater could only play movies that were produced or distributed by them alone – nor could they. However, as with many businesses today that find legal loopholes with their wording, Disney does still have a strong presence in deciding what films get played in theaters and they have set themselves up to be a company that exhibitors are fearful of angering.

Currently, at the large theater by my home, 2 of the 9 films playing there have a heavy Disney finger pressing on them. So, it could be said that currently this fear of Disney having indirect (but total) control of theaters is a little far off. However, I wonder when that line will be crossed. If Disney decided to release a Pixar, Star Wars, and Marvel movie at the – or around the – same time, that would put them at a huge advantage in the market (even though it would make them compete with themselves). Not to mention the other hugely popular franchises that Disney controls on its own – Pirates of the Caribbean, Harry Potter, and its own brand of fairy-tales.

I should state that I don’t believe that Disney produces bad movies (anymore than any other studio). The creative team they have in place for their individual properties seems to be fairly solid, albeit over-saturated. My concern here is not that Disney produces shit movies (they don’t…mostly) or that they are ruining the experience for others. My concern more comes from what can go wrong when one entity has too much control and they become a train-wreck to themselves and the industry they helped mold.

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