Time Chooses Disney CEO Bob Iger as Businessman of the Year

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Yesterday, Time Magazine named Disney CEO Bob Iger as its businessman of the year.

It’s hard to disagree with the conclusion. This year, Disney closed on its deal for Fox assets, gained full control of Hulu, and launched its remarkably successful streaming service Disney+. Unlike Facebook and Google, the company mostly avoided scandal. And Disney is an absolute monster at the box office, as Time noted.

Walt Disney Studios has already released six of the eight most lucrative movies of 2019, and broken the $10 billion global box office barrier. Avengers: Endgame is now the highest-grossing movie of all time, selling $2.8 billion worth of tickets globally since it was released in April. Investors are thrilled; the stock is up 34% this year.

Iger, who was very close with Steve Jobs before he died, even got an endorsement from Sheryl Sandberg.

“I think the Disney+ launch has been amazing,” says Facebook COO Sheryl Sandberg, who was on the company’s board from 2010 to 2018. “It’s a big risk, but Bob’s really good at understanding the landscape further out as well as executing a strategy. It’s rare to be able to do both.”

I’ve written about how Disney is increasingly a large private equity firm disguised as an entertainment giant, that Iger’s tenure is more about pushing legal boundaries and market power than actual creative output. Today, however, that’s what good business means. So it’s fitting that he wins this accolade. He deserves it.

But it is an ideologically tinged award, an assertion Iger is a great empire builder, not that he’s great at the commerce of film. In fact, on that score, he is scorching the earth in terms of destroying the great jewel of American storytelling, the community in Hollywood. Such a scorched earth of creativity may not be apparent, considering the remarkably popular content Disney is creating, like the hit show The Mandalorian. But what’s interesting is that the content strategy Iger is organizing is based not just on artistic merit, but on the current strict legal regime around intellectual property.

In fact, much of what Disney is doing is rebooting popular brands, not creating new stuff from scratch. Fans of, say, Home Alone were quite upset when they learned that Disney would be remaking the franchise, just as Star Wars fans are increasingly frustrated at the direction of the stories they love. I don’t mean to say that fans are right, or that we shouldn’t make more of these iconic storylines. What’s happening though is that the risk is being pulled out of film.

The question isn’t whether Disney will make the next Home Alone or Star Wars, but whether it would have made the original versions. Both Home Alone and Star Wars, as well as other great moves from the 1970s-1990s like Dirty Dancing, Die Hard, and Back to the Future, were considered a bit weird before they became hits. In Home Alone, a child actor stars in a movie full of exceptionally painful and cruel pratfalls. The emotional core was designed around a family that accidentally leaves their child at home but is still not demonized. These are risky choices. So too with Star Wars. Star Wars was a big hit in 1977, but no one thought space fantasies were mainstream until George Lucas proved them wrong.

While Disney will make an endless number of Home Alone sequels or series, I doubt Disney, or any other studio today, would take the risk 20th Century Fox (which Disney now owns) took in 1990 to release the original Home Alone. They will instead mine their existing IP, because they control distribution and so needn’t compete with riskier artistic visions. All of which brings me to Iger’s most important critic, legendary filmmaker Martin Scorsese, who wrote an op-ed in the New York Times about franchise films like Marvel and Star Wars movies and how they aren’t really cinema. In his piece, Scorsese used the language of artistic creativity, but he was really penning an argument against concentrated control of movie creation and distribution. Here’s what Scorsese argued:

Why not just let superhero films and other franchise films be? The reason is simple. In many places around this country and around the world, franchise films are now your primary choice if you want to see something on the big screen. It’s a perilous time in film exhibition, and there are fewer independent theaters than ever. The equation has flipped and streaming has become the primary delivery system. Still, I don’t know a single filmmaker who doesn’t want to design films for the big screen, to be projected before audiences in theaters.

That includes me, and I’m speaking as someone who just completed a picture for Netflix. It, and it alone, allowed us to make “The Irishman” the way we needed to, and for that I’ll always be thankful. We have a theatrical window, which is great. Would I like the picture to play on more big screens for longer periods of time? Of course I would. But no matter whom you make your movie with, the fact is that the screens in most multiplexes are crowded with franchise pictures…

Consider these four observations.

(1) Franchise films are your primary choice if you want to see something on the big screen. This is true, and it’s a direct result of consolidation of theater chains and studios and the increasing leverage that enables to force the distribution of the same content everywhere.

(2) There are fewer independent theaters than ever. One again, this is a critique of consolidation, which occurred throughout the 1990s in the theater chain industry because of the influence of private equity. And now it’s going to get worse, as Disney holds back content to independents.

(3) Streaming has become the primary delivery system. Scorsese isn’t using antitrust terminology, but he may as well say that vertical integration is crushing the ability to distribute risky artistic content.

(4) Screens in most multiplexes are crowded with franchise pictures. And this observation is about how block booking style tactics by studios forced multiplexes to show franchise movies on their main screens. It’s a result of contractual arrangements.

In other words, Scorsese was essentially saying Disney and the other studios are monopolies who have used their power to dull creative expression.

In the past 20 years, as we all know, the movie business has changed on all fronts. But the most ominous change has happened stealthily and under cover of night: the gradual but steady elimination of risk. Many films today are perfect products manufactured for immediate consumption. Many of them are well made by teams of talented individuals. All the same, they lack something essential to cinema: the unifying vision of an individual artist. Because, of course, the individual artist is the riskiest factor of all.

One way Iger responded was to point to Black Panther as an illustration of creative license and the social importance of his judgment. Another way was to simply assert that Scorsese was being “nasty” and “not fair to the people who are making the movies.” But a more honest answer would have been to simply say, yup, Scorsese is right, and Disney is just following the public policy rules that structure creative markets.

In reality, Iger agrees with Scorsese’s observations, because they are observations about the business of movies. Iger is reproducing mass producing risk-free nearly identical products, rebooting franchises to ensure profit and control to boost share prices. Scorsese sees this strategy as way to tailor creative expression to the needs of concentrated capital, as does Iger. It’s just that Iger sees a monochromatic world where Black Panther represents aggressive risk-taking as paradise, whereas Scorsese sees such a world as one filled with terrible sadness.

It’s hard to square Iger’s pleasant world of control and concentration with the increasing anger and populism in politics. It’s not just Elizabeth Warren, who gave a sharp speech this week making the point that big corporations are too big. Her foe Joe Biden says he wants to set up a division at the Department of Justice to review past mega-mergers, and that likely involves Disney. And within the industry, the Director’s Guild, which is the most conservative union in Hollywood, is starting to frown on the direction of the movie-making business, criticizing Trump DOJ Antitrust chief Makan Delrahim’s attempt to dispense with the Paramount Consent decrees.

Iger should enjoy the accolades now, because it won’t be long before more people notice the ironclad control Disney and the few other major studios are imposing on our culture. The center cannot hold.

Thanks for reading. And if you liked this essay, you can sign up here for more issues of BIG, a newsletter on how to restore fair commerce, innovation and democracy. If you want to really understand the secret history of monopoly power, buy my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.

cheers,

Matt Stoller