Disney will reduce its slate of pictures to 18 from a high of 36. Disney’s movie studio is going back to basics.
The House of Mouse will produce fewer action-adventure flicks this year, while focusing on what it does best – family entertainment.
In a retrenchment, the studio also plans to scale back its slate to 18 movies and cut the costs for each, The Los Angeles Times reported.
“Focusing on product that takes advantage of Disney’s strongest asset – its brand in family entertainment – makes a lot of sense,” said Stewart Halpern, a media analyst at ING Barings. “The live-action film business has not been profitable for Disney.”
That means you’ll see fewer movies like “Holy Man” and “Beloved,” and more like “Flubber” and “101 Dalmations.”
To further reduce risk, the studio plans to hop on Hollywood’s most popular bandwagon – co-financing. The studio is already sharing production costs on movies with Sony and Spyglass.
Disney is reinventing its movie studio as the rest of the company struggles under the weight of investment in new businesses.
Last year, earnings were flat. And earnings are likely to be flat or down in fiscal 1999, as the company continues to build new businesses and expand current operations into new parts of the world.
Disney earnings fell 18 percent in the most recently completed quarter, because of slow video sales and higher costs in movies and broadcasting.
There were some movie hits – namely “The Waterboy” and “A Bug’s Life” – and improved theme part attendance, but those were offset by increasing costs.
In addition, sales of Disney-branded merchandise is down.
Halpern believes the changes being made by Disney Chairman Michael Eisner and studio chief Joe Roth are starting to bear fruit. The studio’s results in the second half of 1998 were much better than the second half of the previous year, he said.
And things are moving in the right direction.
“The back half of fiscal ’99 should start seeing a return to Disney’s historical levels of growth,” Halpern predicted.
This year, Disney will reduce its slate of pictures to 18 from a high of 36, and eventually put out as many Disney-style movies as other types.
The studio wants to reduce risk by focusing on its own branded movies, so that even if a movie flops it can be used in other area of the Disney kingdom. Disney-branded movies can make their way into video, onto ABC, onto “The Wonderful World of Disney,” and into theme parks.
“You don’t want to roll the dice,” said a Disney exec.
By reducing the size of the film slate, Disney wants to “make fewer films and make them better,” the exec said. Putting out more than the current slate of 18 movies, “is an awful lot to manage.”
To reduce costs further, Disney recently combined its animation and movie studios, and ended arrangements to house outside producers. Disney shares slid 5/16 to 333/8.