July 28th 2023.
It's strange to think that one of the most beloved companies in the world, Disney, could be facing a populist rebellion. After all, Disney is the "happiest place on Earth," a destination for both Super Bowl winners and small children alike. It's the company that brought us the golden age of 1950s animation, and the classic films we all remember from our childhoods. But today, Disney is a far cry from the beloved studio of Walt Disney's day.
It all started in the 1990s, when a series of deregulatory pushes allowed Disney to acquire a series of mergers and acquisitions, leading to what is now a vast portfolio of brands, from Lucasfilm to Marvel to Pixar to the Muppets. This allowed them to gain control of nearly a quarter of the nation's theatrical box office take, despite making fewer films than they used to. CEO Bob Iger has made it clear that his focus is not on great storytelling, but on building a portfolio of brands and extending its power into direct distribution to 160 million homes.
Disney's newfound corporate power has had serious consequences. It has caused a decrease of payouts to writers, producers, directors, actors, movie theaters, and suppliers, leading to the current actors and writers strike. It has also led to higher ticket prices, the elimination of perks for longtime Disney fans, and an endless stream of mediocre Marvel and Star Wars movies. Meanwhile, the company has had to make obsequious gestures to the Chinese government to protect their investments there.
This has prompted a bipartisan backlash, with both the left and the right targeting the entertainment behemoth. But it takes more than just the left and the right working independently to take on a giant like Disney. For real change to happen, they must work together.
This problem isn't just about Disney, though. It's about the end of antitrust enforcement and regulations designed to keep markets open, something that has been happening across all industries. There is hope, however, in the form of policy changes that have happened in the past. The populists of the late 19th century wanted to tackle the same corporate power that is arising now. And in 1948, a landmark Supreme Court case, United States v. Paramount Pictures, Inc., broke up the movie studios.
The challenge today is to restore some semblance of the old Disney, along with the older, fairer economic order that we know and love. It's a challenge that Jay Gould, the railroad and telegraph baron, posed back in 1886 when he famously boasted, “I can hire one half of the working class to kill the other half.” But with the right and left joining forces to take on Disney, we may be able to make a return to the kind of market structure that once characterized the industry, while delivering better results for the public.
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