The entertainment industry has faced massive disruptions over the past decade. In the early 2010s, the rise of Netflix was an earthquake in the world of cable television. Moreover, the movie theatre industry was also exposed to the risk of more home entertainment options.
The COVID-19 pandemic proved to be one of the greatest challenges in a generation for the traditional cinema. These crises, and the rise of competition in the streaming space, has eaten into profits and stirred anxiety among the industry’s talent.
On May 2, the Writers Guild of America (WGA) went on strike as part of an ongoing dispute with the Alliance of Motion Picture and Television Producers. Then, on July 14, the American actors’ union SAG-AFTRA went on strike in a dispute with the same entity. This has been the biggest industry disruption in over half a century.
Disney (NYSE:DIS), which has grown into an entertainment behemoth with an aggressive acquisition strategy in the 21st century, saw its shares dip 3.5% month-over-month as of close on Wednesday, July 26. The stock is now down 3.5% so far in 2023. CEO Bob Iger attracted criticism from the strikers after he called their demands into question, dismissing them as “not realistic”.
This company has already faced issues with its film release schedule. Ant-Man and the Wasp: Quantumania, had an underwhelming open in early 2023. Meanwhile, The Little Mermaid fell dramatically short of expectations. Worse yet, the fifth installment in the Indiana Jones franchise has thus far failed to breach the $350 million mark for its worldwide gross.
Disney’s studio business has suffered setbacks in 2023. Fortunately, its parks and experiences segment has continued to perform as a profit machine. Disney will need to regroup on strategy to avoid the kind of setbacks we have seen on the creative front. However, it is well equipped to weather a labour dispute that could be long and bitter.
