How home working risked Disney’s hit factory
Returning boss Bob Iger has summoned staff back to the office as he looks to revive creativity, writes
Nestled in the heart of Hollywood, the El Capitan Theatre boasts an almost unparalleled cinematic history. After making its name in 1941 with the debut of Orson Welles’s Citizen Kane, the cinema has played host to some of the biggest premieres in film history – most recently becoming the home of Disney’s new releases.
Yet in recent months, it is not the big screen that has drawn Tinseltown’s attention, but instead the drama playing out within Disney’s boardroom.
In a twist worthy of a Hollywood homecoming plotline, Disney ousted chief executive Bob Chapek in November and hauled back long-time boss Bob Iger.
Now, in one of his first major moves, the boomerang boss has summoned staff back to the office, suggesting that the shift to home working has posed a threat to creativity.
“Creativity is the heart and soul of who we are and what we do at Disney,” Iger wrote in a memo to staff this week.
“And in a creative business like ours nothing can replace the ability to connect, observe and create with peers that comes from being physically together.”
Iger said staff would be expected to return to the company’s offices from Monday to Thursday, marking the latest in a flurry of US companies to return to old working habits.
Disney’s relationship with flexible working is undoubtedly complex. The company launched its streaming service, Disney+, just in time for the pandemic, and cashed in on a surge in viewing as people around the world were stuck at home.
Its subscriber base has since grown at a blistering pace, and last year overtook Netflix for subscriber numbers for the first time.
But more recently, the shine has begun to wear off. Like most of the industry, Disney is contending with a proliferation of rival streaming services, a deepening cost of living crisis and surging production costs.
Disney’s shares fell by about 45pc last year – the biggest drop in nearly half a century – wiping more than $100bn (£82bn) off its market value.
On the big screen, Disney has also suffered a number of recent flops that have prompted soul-searching at the media giant, which is trying to set out its store in the streaming age.
Strange World, an animated drama starring Jake Gyllenhaal, notched up Disney’s worst opening weekend in more than two decades over Thanksgiving, putting it on track to lose $100m during its limited theatrical run. Disney also suffered a flop with Lightyear, a much-hyped Toy Story spin-off that failed to take off with audiences.
While Avatar: The Way of Water has grossed more than $1.7bn at the box office so far, helping to prop up Disney’s overall performance, analysts are still concerned about its run of recent misses.
At the heart of this lacklustre run is a dearth of originality. Disney has leant heavily on sequels such as the critically-panned Avatar follow-up and Frozen II. Lightyear relied on intellectual property dating back almost three decades to 1995.
Not since the release of Moana and Pixar’s Coco in 2016 and 2017 respectively has Disney enjoyed significant box office success with an original title.
A spokesman denied that Disney was lacking in new intellectual property and said the company topped last year’s global box office at $4.9bn, owning four of the top 10 highestgrossing films.
Part of this trend of returning to sequels can be pinned on Disney’s laser-like focus on streaming, which has prompted the company to make ever-tougher demands for new instalments from popular franchises such as Star Wars and Marvel.
By focusing its resources on streaming, Disney risks taking the shine off the cinematic blockbusters that were once its forte.
But by calling staff back to the office, Iger has sent out a warning that the shift to flexible working has become a curb on creativity. The approach reflects concerns elsewhere in creative industries, which rely heavily on office life for collaborative work that sparks ideas.
Iger’s distaste for the fracturing of Disney’s business has also been borne out in his decision to scrap the company’s media and entertainment distribution unit – a division set up by his predecessor to centralise film and television sales and distribution.
Announcing the move last year, Iger said it would place more power back in the hands of creatives, adding: “I believe storytelling is what fuels this company and it belongs at the centre of how we organise our business.”
Enders Analysis said the decision to take investment power away from creative executives was unpopular and the structure was “unwieldy and unworkable”.
However, in his pursuit for creativity, Iger is also facing a balancing act. Media analyst Ian Whittaker says there is “probably a degree of truth” in Iger’s statements, but warns the boss faces a tough challenge trying to win over staff.
The call back to the office also comes as Iger tries to unravel a series of controversies. In 2021, Scarlett
‘In a creative business like ours nothing can replace the ability to connect and create with peers’
Johansson sued Disney, accusing it of breach of contract after her film Black Widow was released on Disney+ alongside a theatrical release.
The media giant was then embroiled in a row over its response to Republican legislation in Florida dubbed the “Don’t Say Gay” bill, which limits classroom discussion of sexual orientation and gender identity. More recently, Disney has clashed with unions amid complaints about pay and working conditions for its theme park staff – a row fuelled by Abigail Disney, a grandniece of Walt Disney who has been vocal in her criticisms of the company. “Personally, my view is this is not the smartest hill to die upon,” Whittaker says. “It risks raising tensions and dissatisfaction over a policy that has little chance of working.”
But after his return to the helm, Iger has made his position clear – efforts to sprinkle fresh pixie dust onto the House of Mouse, and drag its share price out of the doldrums, will begin in the office.