Monday, April 13, 2009

Fiscally Sound Yet Creatively Bankrupt

There's been a lot of talk lately, on the forums and blogs I frequent, to the effect that the Walt Disney Company has lost its way and is teetering on the edge of creative bankruptcy. The authors of these opinions offer many supporting facts, most of them centering around the Company's attempts to cram all the theme parks (especially EPCOT) into the toddler-friendly, licensed character-heavy Disney Parks brand, even if this serves to reduce some of the parks to tacky shells of their former selves. I absolutely agree with these arguments, but I find it interesting that some of the folks making them behave as though this is happening in a vacuum, as if Disney's behavior is somehow aberrant. Viewed in the larger context of corporate America, however, it's totally understandable.

Companies like Disney that provide a product for mass consumption can be divided into two groups: those that innovate and those that don't. Being a non-innovator is not necessarily a bad thing; Coca-Cola, for example, has one main product that its customers expect to remain unchanged forever. When it tried to innovate by tinkering with the Coca-Cola formula in 1985, the results were disastrous. Similarly, McDonalds sells hamburgers and Happy Meals. Many of its attempts to innovate, such as the McPizza and the Arch Deluxe, met with failure because customers simply didn't want anything new from McDonalds.

Other companies, however, must innovate to stay alive. Consider Apple: when Steve Jobs was away from the company from 1985-1996, it nosedived. Its leaders during that period were your average CEO types; competent yet unimaginative businessmen who were fundamentally incapable of understanding what Apple was about. The company ceased to innovate, for the most part, and when Jobs returned in 1997 it was widely presumed that Apple would soon fold. Since then, of course, Apple has become an industry leader, with its competitors often engaged in a frantic scramble to emulate its successful products. I'm not saying they're perfect (I'd would never pay $2000 for a laptop without a removable battery) but Apple's success is directly attributable to their willingness to innovate.

One more example from the entertainment industry: when Star Trek creator Gene Roddenberry died in 1991, the franchise was taken over by Paramount studio executive Rick Berman. Berman was obviously a good administrator, as is evidenced by the fact that production never shut down, even when the Star Trek franchise included the concurrent production of two TV shows and one movie. However, Berman was creatively tone-deaf. He felt that the best way to maintain the profitablity of the Star Trek franchise was to play it safe and never deviate from what he percieved as the Star Trek Formula. The result, of course, put Star Trek into a death spiral of repetitive television episodes and movies, each more unimpressive than the last. Star Trek's fans gave up on the franchise, and Berman's involvement with it was terminated. Over the last few years, Star Trek's reins have been handed to someone with a more creative background who was not afraid to take chances with the franchise, and early reviews of J.J. Abrams' Star Trek film have been positive.

What does all this have to do with Disney? The company that Walt Disney built was an innovator and industry leader, like Apple. These days, it's a provider of predictable comfort food, like McDonalds. Rick Berman and the Apple CEOs not named Jobs managed to alienate huge fanbases with that approach. Disney, however, has chosen to cater mainly to children, and children have notoriously poor taste. They may or may not be inspired by a Horizons or Living Seas, but a roller coaster or a Finding Nemo ride is sure to entertain them. Better yet, their parents crave safe, clean entertainment for their children, even if they themselves are bored silly by it. In the case of Apple and the Star Trek franchise, creative bankruptcy eventually translated in to fiscal bankruptcy (in a general sense). Disney, however, has apparently found a way to go creatively bankrupt but continue to rake in the cash. Any organization-be it a corporation or a sports team or a rock band-tends to take on the personality and values of its leader. We can't expect the Walt Disney Company to continue to act like Walt Disney while it's actually being run by people who are nothing like him.

I'm not defending the company's creative decline, understand, but I'm not mystified by it.

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