This is the Beginning for Disney, Not the End

Frmr Disney Exec Jon Rogers on shutting down the Disney metaverse

Today we have a special guest post from Jon Rogers, formerly the founding executive and global head of live-action franchise development for Walt Disney Studios.

Overpriced JPEGs has teamed up with Jon to create Blockbuster, a recurring series that looks at what is happening across Hollywood, the global media industry, and the blockchain.

Jon is a brand leader with 20+ years of experience in media/entertainment, consumer packaged goods, and most recently Web3. Prior to Disney, Jon was a member of the Star Wars brand marketing team at Lucasfilm where he managed theatrical campaigns, brand partnerships, and retail marketing. Earlier in his career Jon was a strategy consultant with Booz Allen Hamilton working with clients in media/entertainment, high tech, and oil & gas industries.

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🔥 Coming Soon on OPJ: Brand Breakdown - Porsche vs Lamborghini NFT Showdown 🔥

Get ready for our upcoming Brand Breakdown, where we dive deep into the NFT strategies of two automotive giants: Porsche and Lamborghini. 

This report is exclusive to our Overpriced JPEGs PRO members and will be released on April 5th.

OPJ PRO members will get a comparison across Porsche’ & Lamborghini’s respective:

🏎️ Launch Strategies

🚀 Community engagement approaches

🧐 Overall project management

We’ll also review: 

💰 Which brand ultimately approached things best

🔑 Key takeaways and lessons learned from both brands' forays into the NFT space

Ready to fuel up and hit the road with us? By upgrading to PRO, you'll unlock a treasure trove of benefits, including our in-depth Brand Bible Reports, insightful biweekly market analyses, access to the exclusive NFT Power Index data, and expert opinions from Carly. 

All of these resources are designed to help you stay ahead in the fast-paced and ever-changing NFT world.

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This Is The End. No, It’s Just the Beginning!

Last week we published the March edition of “Blockbuster” from Overpriced JPEGs. In that newsletter I started to articulate my belief that Disney needs to approach its Web3 initiatives around a central organizing principle of building a theme park on the blockchain. The timing couldn’t have been more awkward as that same afternoon we learned Disney’s Next Generation Storytelling (NGS) team was shut down as part of an enterprise-wide round of layoffs. I am following up here with some thoughts about that news, if it changed my thinking (it doesn’t), and what should Disney do next.

Here are my seven takeaways from the shocking announcement…

1 - Disney needs cold hard cash. Several days ago Disney announced they were going to start licensing content to Netflix again, starting with Modern Family.  ​​While limited to one show right now, this is a major change in distribution strategy for library content. Add to that the news of the closing of the NGS team and the message is clear: Disney needs cash and any project that can’t clearly offer operating income (OI) in the near term is at risk. What I find intriguing here is that Disney is saying it is ok to pause on building future-forward products to maximize the revenue they can earn today. That might work in the near term, but will have unintended consequences later down the road. I have never known Disney to be a company that cuts future-forward projects this way. Indeed my impression has always been the complete opposite. Disney even has a section of its parks called Tomorrowland dedicated to the idea of building for tomorrow.

2 - 🤯⁉️🤦. The Wall Street Journal and other ​​media outlets reported the NGS team had grown to more than 50 people. My initial reaction was 🤯followed by ⁉️and then followed by 🤦. Many commenters I have seen had the same reaction (even using the same emoji). No wonder this team was shut down. This is dramatically over-resourced and at that scale they had to have a 🎯on their back. I never imagined the team being more than 5-7 people at this early stage. The focus should be on strategy, research, partnerships, and cross-divisional synergy. With more than 50 employees, Disney skipped over several essential steps and ran right into building products. I fault Bob Chapek for this. The only way this sort of mismatch of resources and approach can occur is if someone at the C-level issued a mandate to get something built fast.

3 - NGS never had a chance. When I laid out my recommendation that the NGS team should build within the Walt Disney Imagineering group, I imagined a reorganization of the reporting structure out of their initial home within Disney Media and Entertainment Distribution (DMED). The DMED organization was despised by many of the creative leaders across all of Disney’s studios and identified for closure as soon as Iger announced his return. I am afraid NGS never had a chance because of where the team resided within the organizational structure and became collateral damage in the wake of Chapek’s departure.

4 - Next-Gen Storytelling won't go away. Several of the comments in the media reporting have stated that NGS is 10 years away which is a factor in why Disney shut the team down. This is not accurate. I hope Disney doesn’t believe that. There are Web3 teams working with studio partners at this very moment on NGS projects. The first NGS shows will start broadcasting within the next 12-18 months, not 10 years. Disney can take a break from NGS, but their competitors are moving forward and Disney will have to restart the team and jump back in eventually. Blockchain is an architectural innovation for the media industry. Incumbent leaders traditionally fail to seize the opportunities from these kinds of innovations. If they do, the consequences of falling behind can be severe.

6 - Flawed digital leadership. As I have said before on the Blockbuster podcast, Bob Iger is the most successful media executive over the last 25-30 years. Bob has earned that, but no one is flawless. If Iger has shown any weak spots in his skill sets during his amazing career, they are entirely in the digital space. Iger has been back as CEO for five months. Bob has had ​​plenty of opportunities at this point to address the resourcing and organizational structure problems of the NGS team. That he did not do so, and instead decided to shut it down instead, is to me another example of this weakness when it comes to digital products, particularly gaming. Bob failed to seize the opportunity for realignment with NGS. A decision I believe he will have to “undo” within a 12-18 month time horizon as competitors begin to launch their products. How far behind will Disney be when that happens? Surely a small SWAT team inside WDI is justified just to avoid losing competitive edge.

6 - There might be some good news here. I feel for the employees who lost their jobs yesterday. I have been laid-off before. It’s a horrible moment when it happens. Despite the terrible human cost - which the failure of Bob Chapek is entirely to blame, there might be a silver lining here for the Web3 storytelling industry. One of the worst things that can happen to the emerging blockchain economy and industry is for a big global brand like a Disney to step into the space, fail, and walk-away. It is now clear that Disney was going down the wrong path. If it needs to happen, now is the best time to take a break and hit the reset button. The recommendations I suggested in yesterday’s newsletter - If I had Bob’s Ear - stand unchanged. Take your time and clear the market. Reconstitute the NGS team within WDI with a near-term focus on strategy, and don’t overstaff it.

Overall, I stand by my recommendations from last week’s article. I still believe Disney has more to gain from blockchain technology than any other company on the planet. My hope is that Disney will quietly start building again, but this next time, do so with a small team within WDI dedicated to strategy, alignment and synergy.