Monday, August 26, 2019

Disney's Talespin: The Problem of Influencing Social Media

These were supposed to be good weeks for the Walt Disney Company. D23, their big corporate fan convention, where they get to promote all their good press, is coming up this weekend. The press on Galaxy's Edge should be changing for the better with the blackouts being removed from the Disneyland park and the Disney Hollywood Studios version coming online.

Then everything started going sideways.

First, the Disney rumor mill was stirred with reports of exactly why Galaxy's Edge in Disneyland "underperformed."  Then, an alleged expose of Disney's manipulation of the online community was posted.  On the same day, an ex-accountant blew the whistle on Disney allegedly inflating revenue for years to the tune of billions of dollars.

To understand the significance of many of these events, a little Disney history is needed.

Despite a popular perception of Walt as the man in charge, Disney has always worked best when there are two visionaries at the head of the company.  In the original days, it was the two brothers, Roy O. and Walt.  Walt was the dreamer, envisioning projects no one had dared attempt before.  But Roy was a visionary in his own right.  Roy was the money man, and he had the insight and the experience to trust Walt and to make Walt's dreams happen or rein him in when necessary.  It was Roy who approached the television studios to get financing for Disneyland.  In brokering that deal, Roy secured advertising and financing in one fell swoop.  Their partnership is what allowed Disney to continue to innovate and prosper.

When Walt died, Roy assumed control, but focused on safer bets.  The Florida Project started with a theme park as opposed to the radical new urban design Walt had hoped for.  Even that theme park would be a closer copy to Disneyland that Walt would have done.

To say the company floundered without Walt would be an understatement.  The company would continue in this meandering path until the late 1980s/early 1990s.

The more general population would attribute the Disney Renaissance, as this period became known, to Michael Eisner.  Eisner was the visible creative.  A successful producer at Paramount, Eisner brought a new life and energy to the Disney Company.  Eisner's early success with the Walt Disney company, though, must also be attributed to his President and Chief Operating Officer, Frank Wells.

Wells and Eisner were brought in as a team by Roy O. Disney to replace Ron Miller.  Eisner would be CEO and Chairman, Wells President and COO.  Once again, we had another successful combination - Eisner the big idea man, Wells the practical applicant.   Wells could make Eisner's out of the box ideas happen, or pull him back when they went too far.

The Wells and Eisner team had a lot of hits in the early 90s.  Disney Animation quiet literally roared back into prominence with The Little Mermaid, Beauty & The Beast, Aladdin, and The Lion King.  Parks and Resorts opened Disneyland Paris, Disney MGM Studios, planned for Disney Animal Kingdom, and announced the Disney Decade.  The company looked unstoppable.

On Easter 1994, Frank Wells was killed in a helicopter crash returning from a ski trip in the Ruby Mountains.  Of the five people aboard the helicopter, only one would survive.

Eisner's tenure following Wells' untimely death was marked by disappointment, frustration, and infighting.  A string of flops in Disney Animation.  The very public breakup with Jeffrey Katzenberg and the PIXAR/Dreamworks feud.  The failure to launch several theme parks (Disney's America, Port Disney, WestCot) and the ultimate failure of Disney California Adventure.  The "Save Disney" campaign and shareholder/board fight.

It's this Save Disney era and background that the recent troubles stem from. Save Disney referred to a campaign by Roy E. Disney, Roy O.’s son and Walt’s nephew, to oust Michael Eisner from the company. Roy felt there was too much micromanagement within the studio, too little success with the ABC acquisition, too much timidity in the theme parks, and an overall transition into a “rapacious, soul-less” company. Roy was able to rally shareholders to withhold their proxies in March 2004 and refuse to re-elect Eisner to the board of directors. From there, it took Eisner a year to step down as CEO.

One of the key tools Roy E. Disney was able to use in the Save Disney campaigns, and one of the chief sources of support came from the early internet.  Enter Al Lutz.

Lutz was a former recording industry executive who gained a following in the pre-internet days, with the alt.disney.disneyland USENET newsgroup, where he edited the Disneyland Information Guide, an unofficial resource for information about Disneyland.  What started as an FAQ quickly became a gossip column, with articles about the perceived decline in value and quality in the Disneyland park.  And during this time, there was a lot to write about, particularly in light of the fatal incidents on Big Thunder Mountain Railroad and the S.S. Columbia at the time.

Lutz's columns on Mouseplanet and Micechat/Miceage developed a devoted following.  Readers ate up the behind the scenes peek into the tumult of the Disney company.  After Disney California Adventure premiered with a dud, readers followed Lutz in blaming Paul Pressler and Cynthia Harris.  Media even started paying attention with columns that reported on Lindsay Lohan's antics at Disneyland or the changing of the it's a small world boats to accommodate "heavier" guests.

To say Lutz's columns bothered the Disney Company is an understatement.

Lutz's health, though, prevented him from continuing his column as long as everyone may have liked.  Suffering from the effects of Parkinson's disease, he largely retired from regular writing around 2005, coming back from time to time for an April Fools post or the like.

Two weeks ago, Lutz reappeared back online at Disney fan site MiceChat with a rumor column on August 13, 2019.  This time, however, he came back with a post very similar to his early posts - filled with backstage drama and corporate inner workings, very critical of the decisions of the Walt Disney Company.

In the column, Lutz outlined the internal concerns over the performance of Galaxy's Edge, the new Star Wars land, and pointed to the likely causes. In particular, Lutz pointed to the choices made by Parks Chairman Bob Chapek to remove the third ride from the land (a unique C-ticket transportation ride), the large space dinner theater restaurant, and the live action characters and droids from the land. These cuts combined with the bungled preparations and over correcting for crowds put Disneyland at an attendance level down 1.8%. In a year when everything was supposed to be at its peak, the blame seemed to be placed at Chapek's feet.

That column sent shockwaves through the Disney organization.  Just as his columns did in the transition from Eisner to Iger.

Last week, things really hit the fan with the posting of Gary Snyder's article, The [DIS] Influencer, on Medium.  Snyder purported to pull back the curtain completely, revealing Al Lutz to have been largely ghost written by Disney company spokespeople.  According to Snyder, Lutz has not ever written anything for MiceChat and had not been writing since 2002.  Those columns, the columns in the Save Disney time, those heavily influential, critical columns were the product of a ghostwriter planted by the Disney company.  This plant was alleged to be the plan of Zenia Mucha, the Senior Executive Vice President and Chief Communications Officer for the Walt Disney company.  Mucha allegedly used this ghostwriter to orchestrate the transition of Robert Iger into power as the Chairman and Chief Executive Officer.  Further, the column would be used to direct fan anger into specific areas that the Disney company would like it to go (and presumably distract it away from areas that it would not).

The news sent the Disney online community spinning.  Trying to out other posters as corporate shills.  Trying to track down an answer from TP2000/Troy Porter, the alleged ghostwriter.  Discussion on the topic on the forums on MiceChat was shut down.  But the community came to the realization that everyone should have online - unless you can ask the writer in person, you have no real proof that anyone who writes on the web is who they say they are.

You have no idea of their biases, unless they let them show.  You have no idea of their influences.  You have no idea what is going on behind the scenes.

Plus, Disney has long been known for perusing the online forums for essentially free market research.

The final nail for Disney came from a former accountant.  Sandra Kuba, a former senior financial analyst, reported that she had met with the SEC to report Disney for overstating revenue in the parks and resorts division by billions of dollars by exploiting weaknesses in the company's accounting software.

This again does not come as a surprise to those paying attention.  There were definitely allegations of graft and money laundering in the construction of Shanghai Disney.  Plus the budgets of attractions are getting to the $100 hammer points.

Couple all the above with a tepid D23 expo over the weekend, and Disney is not coming off well.  Throw in a spat with Sony over the rights to Spider-man and even the most die-hard fans are starting to notice.

As a die-hard fan, this is all a bit tough, but not all that surprising.  We are definitely at a point again where Disney is reacting but not really stretching itself.

Maybe it's time for a new pair at the top?  A new Roy and Walt, Eisner and Wells.

This will be something I'm keeping my eye on.

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