Tuesday, November 3, 2009

Disney Remakes the Movie Studio

I hope this brief article reflects to writers how important product selection and marketing are to the major studios.

How CEO Iger is applying the company's brand marketing savvy to filmmaking
By Ronald Grover at BusinessWeek
October 29, 2009
In early October, Walt Disney (DIS) Chief Executive Robert A. Iger installed a new chairman at the company's movie
studio. Such shakeups are routine in Hollywood, especially now that the entertainment business is struggling. But in
hiring as his studio chief Rich Ross, who helped make companywide franchises out of such Disney Channel hits as
Hannah Montana and High School Musical, Iger seems to be reinventing the modern Hollywood studio. "The primary
responsibility" of any movie executive, Iger said at a public event recently, is to "choose good movies." But he also
expects his studio executive "to be a brand manager."
Iger's philosophy is one that a Procter & Gamble (PG), say, would instantly recognize: build a stable of brands, each
with its own strong identity and core group of customers. Since becoming CEO four years ago, Iger has brought inside
the Disney tent a handful of marquee names—among them director Steven Spielberg and his DreamWorks SKG
(DWA) team, animation giant Pixar, and Marvel Entertainment (MVL). That bolsters a studio that already has
Hollywood's biggest brand, Disney, and superstar producer Jerry Bruckheimer, who created such blockbusters as the
Pirates of the Caribbean series.
Managing these big names and keeping them from undermining one another will be a challenge. But Rick Sands, a
former MGM chief operating officer, calls Iger's strategy "pure genius" at a time when "you need well-known
filmmakers who can create event films" that stand out amid the clutter of entertainment choices.
Studios in the past have tried to line up hitmakers, often signing them to "first look" agreements that give the studio
dibs on new projects. But most films were funneled through a studio's creative executives, who often found the project
and supervised the script. Ross will green-light projects and set in motion many of the 16 films Disney makes each
year. But when a studio brings in famous moviemakers such as Spielberg, it's banking on their ability to continue to
work their magic. That means giving up some control.
Ross essentially operated that way at the Disney Channel. He allowed the creative folks to take the lead for Hannah
Montana and High School Musical. Then he got deeply involved in marketing strategy. Before the first Hannah
Montana episode aired, Ross took its young star, Miley Cyrus, on an internal road show, visiting other Disney units and
enlisting them to sell merchandise that helped make the show a hit.
He is expected to be similarly hands-on at the movie studio. Bruckheimer recently showed Ross a 30-minute segment
of next year's live-action version of The Sorcerer's Apprentice, and says Ross suggested "a dozen ways to market it
before he left the room."
Each brand will require a different management approach. Disney and Pixar executives already sit on a committee that decides which animated projects Pixar should pursue. The committee gives wide latitude to the wishes of Pixar's
creative guru, John Lasseter. Spielberg and his DreamWorks partner, Stacey Snider, arrange financing and make their
own creative decisions. Disney will provide marketing support. How Marvel will fit into the strategy has yet to be
determined, although Iger has said publicly that it will enjoy a lot of autonomy.

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