Bob Iger is at it again. Derek Johnson II and Nicholas Killian discuss Disney's Q3 earnings call, expressing skepticism about the company's claim of improving quality while cutting costs and criticizing their lack of support for creatives. They also discuss the impact of ongoing strikes and highlight Disney's strong performance on Disney Plus and direct-to-consumer segment.

This is Film Center, your number one show for real entertainment industry news.

No fluff.

All facts.

Now here are your anchors, Derek Johnson II and Nicholas Killian.

Hey everyone.

Welcome to Film Center.

My name's Derek Johnson ii.

I'm Nicholas Killian.

And what are we talking about today, Nicholas?

Today we're talking about.

Bob Iger and Disney's Q three earnings call and basically how

they're going to go going forward.

Wow.

So this episode's gonna be a little bit.

Person centric, bob Iger.

Usually we don't talk about a specific person unless it's relating to the

subject matter of the, a certain film or of a certain television show,

but in this case Bob has been in the news a little bit more than others.

Yeah.

Lot of certain comments that he's made.

There's also been pictures of him on his $400 million yacht while the

strike's going on, talking about how the writers are unreasonable.

So we thought we'd take a good deep dive look into because this country

has, is built on certain laws and one of those laws is that you're innocent.

Until proven guilty.

You're supposed to be.

We all know you're guilty until proven innocent though.

Exactly.

So what we are going to attempt to do is look at what Bob is doing with

Disney and make sense of it all.

So the thing is one of the things that Disney has decided to do is typically

what Disney does is releases about six films, 60 films across various studios

like Marvel Pixel Disney Animation, 20th Century Studios, spreading it all around.

And what they've decided to do, he means Pixar.

He doesn't mean pixel.

Did I say P?

Yeah.

Okay.

I meant Pixar.

No, you're sorry.

You look too far ahead into the future.

They'll buy pixel eventually, but for right now it's just Pixar.

But so what they've decided to do is they're gonna cut it down in half.

Yes.

And they're only going to, they're only going to be.

Putting out between 30 and 40, right?

And this is intended to be more selective and be able to import more resources

into those 30 or 40 films that they are.

Talking about like budgets for live action films will likely range from a

hundred million dollars on the lower end to up to $250 million for big event

films down to some recent films like Ava Avatar two that's exceeded $350 million.

Now, to be fair, Context of the situation.

This is being recorded on the 11th of August, still in the

heat of the writer's strike.

That's being ACD by the actor strike.

And just for a little context now, Disney's oh, this

make some cuts somewhere.

I don't believe that he made this decision purely out of heart, he's just

probably looking at it realistically.

If the strikes continue, what they're gonna have to do and what he has.

Now, this is according to the rap Bob Agar made a statement saying that Disney

wants to cut not only the quantity of movies which they're playing on

doing, but also the cost of films because of avatar to focus on quality.

And I don't think anyone's really buying that.

No you're needing to cut in these costs 'cause you know it's gonna

be a long haul with the strikes.

Yeah.

That.

It's costing you money.

It's costing a hundred million a week.

Clearly that's what's happening.

Now.

My real question is that, and this is also how I know I don't know

100% I will say that, but why?

I feel as if it's a lie for him to even say that, oh, they're focusing on quality.

You cannot use Avatar as the.

Selling point to cut costs no avatar.

Yeah, it made $2.3 billion, but guess what?

It also cost it around 460 million and took over 10 years to come out.

That is not sustainable.

That's not also, let's be real here.

It made them much money because of how well the first one performed.

So it's a series number two, James Cameron Aless.

A writer of director who's very famous.

He's gonna pull on people himself.

And then you also have him saying, cut cutting quantity.

I get that.

That's how a company can really save good costs.

That makes a lot of sense to me.

But cutting the cost of the film, you are using avatar to justify cutting costs of a

film director who famously just spends as much money as possible to get a job done.

I don't think so.

To do really well, now, and especially cutting costs of the film.

That's, that sounds like you're going to just be cheap if you just say, oh,

we're gonna cut the amount of films to save money, to keep up the cost for

films, so that way there's quality in it.

That makes sense.

But to say, I'm also gonna cut the cost of the films to up the quality.

How does that work?

No that, that's, that.

It doesn't work like that.

But also the thing is you have to see, you have to sit there and see.

Bob Iger saw how Disney did last year.

Yeah, disney did not really have a great year in terms of movies in 2022 and

in the tent pool movies of this year in 2023 aren't doing that hot either.

No.

They had to praise Barbie because of everyone thought it was sinking.

And the thing was, is didn't they extend the deadline of

the strike just to screw over?

Yeah.

The people doing Barbie and Oppenheimer so that they could get the movie promoted and

get it to do what it's doing right now.

Yes.

So the thing is according to a report by deadline, the biggest.

Box office flop, according to Disney, was Strange World and a Disney animated

movie based on the Chronicles of Narnia.

The movie production had $180 million and a marketing budget of $90

million, but only grossed $73 million worldwide, so they lost about $200

million on that production alone.

See.

Look, this is exactly what I'm talking about.

Everyone knows.

I guess if you're not, if you're listening to us and you're not in the industry,

you might not know this, but you need to spend almost the exact same amount in

marketing or at least 80% in marketing that you have of your movie budget.

That's the same thing that happened to Buzz Lightyear, right?

Buzz Lightyear was supposed to be a smash avatar hit.

And.

Disney lost $106 million on the movie.

It only grossed $267 million worldwide, and it cost $200 million to make.

Once again, they're banking on the marketability of a

previous toy story, right?

However, their marketing wasn't.

Good, as good as it could be.

It seems to be this growing trend right now that a lot of large studios are just

saying, Hey, we're not gonna spend as much in marketing, just use social media.

That's free.

And that's not a thing.

Like you don't No, you don't do that.

And so the thing was is that when they had the Q three earnings

call, they actually beat.

They actually beat what people were expecting.

Now, it did go down a little bit.

Disney reported $16.7 billion per quarter for the quarter, down 4% from

the same period as last year, but beating expectations of $16.5 billion.

Now we're talking about billion with a beat, right?

We're not talking about million.

Once again, everyone out there defending these studios, they are not poor.

They are just cheap.

They right, they're cheap, they're not poor.

And the reason why they're cheap is 'cause they have to pay themselves.

Lots of money.

It's what's the saying that goes how do you know the worst?

How do you know the worst car insurance companies?

It's the ones you see the most.

Exactly.

And why is that?

For the simple reason of they have to pay for TV spots, they have to pay

for all of this marketing, and they're not gonna absorb that cost themselves.

They're gonna pass it off to the consumer.

Exactly.

So the thing, that's the thing with.

Bob Iger and Disney.

How are you gonna sit there and say that you want to, you wanna cut down

on cost, but focus on the quality and then also that you want to come to

the table with the W G A and SAG Afro, but you're also investing in ways

to cut out those two groups with ai.

Yeah.

That makes no sense.

And you know that.

Once they ev eventually get the W jeans and sag back together with these studios

that they're going to try to implement AI anyway they're already going to do it.

They're already going to do it.

If you're just tuning in my name's Derek Johnson a second.

I'm Nicholas Kelly, and when we're on film center talking about Bob

Iger and his statements recently of the Q three earnings call

and Disney going forward, right?

The real issue here is I think, comes down to just straight up lies.

Oh, complete lies.

Just straight up lies.

Like it's hard for, it's hard for us to believe people who were previously

stated saying they're going to wait to starve these people out.

It's hard for us to trust studios to say they're gonna up quality

when they're trying to cut costs.

Yeah.

You think about it like this, right?

So what Bob Argue was basically saying is that we're going to basically

look at the data and say, okay, what should go to Disney Plus and

what should get a theatrical release instead of just giving everything a

theatrical release, which I get that.

I understand that.

Yeah.

Also, Bob Iger talked about in the call how he basically turned the.

Company around in eight months because his predecessor wasn't doing all that well.

Mysteriously.

But that's not what this episode's about.

But the thing is so Disney Plus ended the quarter with 116 million paid

subscribers up 12% from the previous quarter and double from a year ago.

The service added 12.4 million new subscribers in the quarter exceeding

expectations of 10.5 million.

So you can't sit there and say that you're outta money or that you're not doing well.

There's this need to now suddenly caught cut costs is looking into

the future and seeing what's going on with these strikes, right?

And then you sit there and you have the company's direct to consumer

segment saw revenue grow by 57%.

From 4.3 billion driven by strong consumer growth for Disney Plus

and Hulu, and it's improved.

Its operating costs and loss by 88% to $293 million.

There's another, I have another quote here from Bob Iger.

This one also comes from the wrap.

Nothing is more important to this company than its relationship with its creators.

With its creators.

Excuse me.

Yeah, you need to pay your creatives.

This is what the strikes are about, right?

When he says cut costs to the company, I then he talks about

not producing as many films.

That makes sense.

That is a smart way to cut costs and not affect your creatives.

When you say, I am going to up the quality and cut the cost, then I'm going to be

paying people to put out that quality.

That is not read to me as, oh, I'm down supporting my creatives,

especially at a time in which they're striking against you for more money.

Yeah.

You it's sleight of hand, right?

It's you're basically saying, oh, I support you.

It's kinda like the what was that guy?

That plays an arrow, and he was like, I support my union,

but I don't support the strike.

It's yeah.

Then what are you talking about?

What are you talking about?

Yeah.

It's basically just being like, yeah, no, I definitely support.

Like back home, I support freedoms but not yours.

It's it's like back home in Louisiana.

Drink, drinking and driving is a problem, right?

Yeah.

So the thing that they came up, imagine with is, so we have drive

through daiquiri shops, right?

Which you would think two and two, you wanna cut down on it?

We'll cut down on the drive through daiquiri shops and what did they say?

They are pretty awesome.

They were like, nah, we're just gonna put.

Paper over the straw, isn't it?

Isn't it in Louisiana they put paper over the straw.

When they hand it to you, they're not responsible for you even drinking.

Wait, it's technically not an open container.

Even though they know you're about to drink it.

Just like here in California, they have dried through marijuana.

Yeah.

Now you can get a D W I for smoking, weeded and driving.

You can All that's been for, that's actually been there for a while

because it's under the influence.

But yeah it's, you can't sit here and make hundreds of millions

of dollars, billions of dollars.

And then be, that's what said, I like billions.

Yeah.

And then be like, but we're really trying to help out our creatives.

No, you're not.

So what do you think this all really means, Nicholas?

I think what they're doing is exactly what we do as a person.

If, I'll give you an example, right?

I had a while ago I had a big CAR exp expense coming up.

Whenever you go to your, get your car service, it's at least 400 on the

high side, a thousand dollars, right?

So what you start doing is you start cutting on costs.

To sit there and be like, okay, I know this thousand dollars bill is coming

up and it's gonna hit me, right?

So I think that's what Bob Iger is doing.

He's I know that this is going to come to a point where it's not

going to be sustainable for me.

It's this, it's not gonna be sustainable.

Especially 'cause like when he says what he says, cut, but everything

he's talking about cutting, these are necessities to survive.

I can't produce as many movies.

That's 'cause the writers and actors are on strike, right?

Oh, I need to up the quality.

Because there's so much stuff being made nowadays, only things

with quality are making money.

It used to be that you make your thing back with D V D sales and nowadays it's

being less and less true to the point to where it's like the, it either needs

to be great or no one's gonna care.

Right, and the thing is so you sit there and you say, oh I mean everything's

just so expensive these days with inflation and this, that and the other.

It's no, based on the earnings call that he was talking about, the company's

general and administrative expenses decreased by 17% to $1.6 billion

reflecting lower head count related costs.

They have more money than ever.

It's, they keep calling, they keep what do they call that?

Crying Wolf, what is it?

Yeah.

Yeah.

Crying.

Cry wolf.

Yeah.

Crying wolf.

But then it's like you're making record profits, right?

Oh, I can't pay these writers.

They're being unreasonable.

You made more money than you have in a while than you ever have before.

Then, we have to understand that we're talking about billions of dollars.

This is not hundreds of millions of dollars.

We're talking about tens of billions of dollars.

And they're sitting there saying, oh, we can't help you out,

man, that, that's crazy, man.

Man, my money's going somewhere.

It's going, it is going somewhere.

It's it's like Congress telling you oh man, during the pandemic they were like,

oh, we gotta do all these meetings to find out if we can give the American public.

A thousand dollars.

A thousand dollars.

Meanwhile, we're going to hold votes to see if we're gonna

pay each other more money.

And we're just gonna give billions just off rip, just 'cause we

feel like it to other countries.

It just, but to our own people, we gotta think about it.

It makes absolutely no sense.

One thing I am excited for is they're coming up and I really hope that

the strike is settled beforehand.

They're coming up with Kung Fu Panda, a new movie, Kung Fu

Panda, the Pause of Destiny.

Yeah, we recently talked about that before.

And because what Disney is trying to do is pursue new growth

opportunities in other markets.

Disney is not coming out with the Dreamworks is, right?

They're but them as a whole and it's a almost trying to sidestep,

let's go into new markets.

Yeah.

Where we don't have to deal with the rider strike.

But, so then all we have to do is deal with them and have co-production.

Now you more and more shoots are being pushed out of out of the country.

They're always looking for new places to film.

I remember I went to a F M and Fiji has really Great rebates.

So for those of you who might not know, And once again, those of you

just do, again, my name's Derek.

I'm here with Nicholas.

Michael Nicholas, and this is Film Center.

We're talking about Bob Iger.

But the modern day Scrooge, right?

The modern day Scrooge, right?

Ebenezer, the modern day.

Ebenezer.

Sc, do you remember when we were talking about, when we went to the strike and

the people who wouldn't honk for us are the guys who were wearing the.

Yeah, the button up arm with the sweater over.

The button up, right?

That's that.

He frequently wears that ghetto.

But anyway, back to Fiji.

The reason why Fiji wants people to, to film over there, it's not only for tourism

is, but they have incredible rebates.

That's the whole, so I can spend a hundred million dollars on a movie here

in America and really not get my money's worth because I had to pay so many people.

I had to pay the state, I gotta pay this, I gotta pay that.

And each state has their own rebates.

But for Fiji, I can get 50% of my whole budget back.

That's what happened in the South, right?

That's what happened in the Gulf Coast, Louisiana, Georgia.

All those places.

That's why Georgia is coming up on tv.

In fact, for most people, I tell them, they was like, look, if you wanna

be in movies, you can go to LA if you want to, but just go to Atlanta.

Dude.

It's so much cheaper.

The crazy part was, is that on the same vein of being cheap,

it was supposed to be Louisiana.

Yeah.

So Louisiana was supposed to be the, was supposed to be Georgia.

But what ended up happening is we had the governor there basically vetoed.

And got rid of the tax credits for the entertainment industry.

So they were like, oh, no problem for money.

'cause he, because they wanna make more money.

Oh, no problem.

We'll just go over to Georgia.

And Tyler Berry has his his old setup over there.

Smart.

They also have a studio back home called Celtics Studios.

That it's right next to a Costco.

Oh, really?

But but then the thing is, like they said, like I said, they're

moving into India and China.

The company plans to launch a Disney plus Hot Star in Thailand.

We were just talking about Fiji, Thailand.

On August 30th because all or in Asia, basically the W G A and the

S G A and all these unions, they don't have any power in Asia.

That's the whole reason why they're sitting there talking about, oh,

we're downsizing growth, and they're u they're going to use that money to

then expand growth into India and China and Fiji and Thailand where there's

countries laws allow them to be more.

I'll say lenient with the way they conduct business, because

all they want is the money.

Exactly.

They're like, Hey, as long as you give me the money, I

don't really care what you do.

It's something that you really don't, you really don't understand because

you're like, you sit there and say, you have Barbie and Oppenheimer, right?

And you're like same thing with Top Gun, right?

When you make quality movies, And you do it and you don't worry about China, right?

You end up doing really great.

Look at Top Gun.

Top Gun had something in Top Gun Maverick.

The second one, right?

Top Gun Maverick I forget what it had in its movie that China didn't like.

So they were like it's completely banned in China.

And they were like, cool, no problem.

Actually a lot of people were worried that it wasn't going to do well.

And it actually got a lot of support because they didn't care what China

thought about it and making over a billion dollars, and just, I mean without

the world's biggest market, right?

So the reason why a lot of movies nowadays are influenced by China in

TV shows is 'cause there's a huge film market over there where they

can make a lot of their money back.

It's the largest one right now.

That's why influence is so much American movies and television.

So for Top Gun to just say, screw it, I'm just gonna make most of my

stuff out without the biggest market.

It just shows that it's proof that when you do something with of actual quality

and do it like you care, it'll work.

Because the reports were coming out that Tom Cruise was just like relentless about

how he wanted the movie to be made, right?

He was like no, we're doing it like this.

We're doing it like this, and it's not coming out till it looks like this.

Until it's.

And so it's great.

But you can do that when you're Tom Cruise.

Yeah, you can do that when you're Tom Cruise.

That's true.

He has all the power to, to, and he's been an executive

producer for how many movies now.

And the man does stunts and they're the stunt coordinator's yeah.

That's too dangerous.

That's crazy, man.

Listen you're fired and I'm gonna get another stunt coordinator in, and it's

like, Hey, so tell me how I can do this.

You could.

Cool.

No problem.

Just do whatever you want to.

But the here's a question that I would pose to you.

So Disney has said that they're going to go down from 60 films to probably 30.

It's, I don't think it's going to be 40, I think it's gonna be 30.

They're just gonna cut down for it.

Now, a lot of people might say that the films.

Eliminates maybe solid hits and eliminates opportunities for new

intellectual property to emerge.

A new intellectual property is basically dead to a lot of studios especially when

it comes to even intellectual properties that are, how should I say this?

When it came to strange world was not remarketed properly at all.

I.

It's a newer thing.

But it's Disney, right?

So it's usually they would have this huge marketing p marketing

ploy, not ploy marketing campaign.

Excuse me.

But the issue is with ips that there's like we've talked about previously,

they're scared to better new ips, right?

They don't really care how the SS come up anymore.

There is only emphasis in the end product.

That's what.

Is the problem with all of this, right there, is there's the main components

that you're supposed to spend money on and focus on is one, the process

and two, the end product, right?

It's like there, you can't have one without the other.

For example, let's say I'm painting a picture.

Okay?

I'm paying a picture of an apple.

I want the picture to come out really great, right?

But that means I need the right tools to do that.

I need to have, if I'm paying a red apple, gotta have red.

The better quality paints I have, the better kind of painting I can make.

Now.

Yes, a true master can just, use regular paints and be really great at it.

But then he himself is also a tool because the studio is really only paying for the

end product, not really who's making it.

So now they're like, okay, only ma now they're only

hiring masters and no one knew.

Just something that the W g A and S G A is striking for.

Allow more newbies to come in.

'cause we were talking about a couple of episodes ago, the fact that

whenever you, now, God forbid, and God hoping you do get a series order.

Now you can only hire, like we said, Two master script writers.

And that's it.

That's all you can do.

You can't hire any newbies.

You can't hire any mid-level people 'cause you can't afford for it not to do well.

And they can pay for it.

They just don't feel like it.

So really, I honestly, I, I don't think that they're gonna go for it.

There's this whole cutting, like he's phrasing it like it's a positive thing

when really it's scarily detrimental.

It's doublespeak, right?

It's doublespeak, and then the thing is you sit there and you talk about,

okay, how are the parks doing?

If Disney is such a terrible company, how are the parks doing?

And the revenue, the reported revenue is $4.3 billion, up 308% year over year.

That's, the parks have always been making tons of money.

I used to work there myself.

They make tons of money.

And the thing is the general consensus, I don't know, maybe you would see hear

this, is that people were like, oh man, Disney's probably losing money

because nobody's going to the parks.

And it's no.

The part, first of all, Disney Shanghai.

Brings in a lot of money.

I know.

I so when I worked at Disney World, it was 20 15, 20 16, and I remember

a lot of people who are gonna work in Disney Shanghai came over to

Disney World in Florida to train.

So I trained a lot of people, I don't know if they still work over there,

but a lot of people were gonna be in Disney World, Shanghai, and came

over to the US to train, right?

I remember talking to a lot of the The Chinese citizens and they were

like, oh when we get over there, our Disney's gonna be different.

I haven't been to Disney World, Shanghai, but what I do know is that

the way their Disney World is framed, it might look a lot different than ours.

So all the stuff that's happening with our strike over here, they

might not even know that's going on.

That's the whole point.

Yeah.

That's the whole point to not know what's going on.

Yeah.

Our change in our American image is not affecting their image at all.

Weren't you were telling me yesterday about how it is to film films in the East.

Yeah.

You were talking about how it's so different here than there.

I was actually talking about the the east of the United

States, Eastern United States.

So it's.

Just for clarification 'cause filming in the East and Asia is also way different.

But no, in the east of the United States everything sets are more militant

and a lot tighter than they are.

They were kinda like more loosey over here in the west and

it's just been my experience.

They also seem to be a lot tighter in Canada Toronto specifically but

I don't know if it's the culture, actually, that's probably what it is.

I'm just gonna go ahead and say it's probably the culture,

why the sets are different.

I guarantee you if Bob actually spent some time going around to these different

sets that aren't these giant 10 pole movies and actually went on some hands

On the ground going around and see what's actually happening with his actual movie

sets and seeing how these creatives work.

We wouldn't have all these problems, but they don't do that.

So because they don't have to.

Because they don't have to.

That's the whole reason why they don't do it, is because they don't have to.

There's even a lot of people that are upset right now because you

have a lot of these big celebrities that HA are still filming movies.

There's like over 40 movies that are being filmed right now.

Now there are exceptions and they're being filmed by independent

studios and stuff like that.

But also the people that are striking are sitting there saying

Hey man, this is supposed to be a strike of no entertainment.

Like I get.

What, and you guys are still doing, and you guys are still doing movies

and these aren't like, like small time people who need this money.

These are big names.

These are huge names.

Yeah, huge names.

And they're like, I get that you're doing it with an independent studio,

but still at the same time, it's enough to keep the industry moving.

And not only that, like strikes only work, like you said, strikes only

really work if everyone's doing it.

Or else it's not really a strike, is it?

And the thing is you have your most prominent celebrities are the

ones that are getting exemptions to film their movies, right?

So if you have your most prominent now, the Rock, we talked about this before.

The rock donated like a seven figure amount, but.

Okay, cool.

I appreciate that, man.

But it, did you do that out of the kindness of your own heart or did you do

that so that whenever this is over with, nobody comes with pitchforks and fire

torches saying oh, you were still working.

He was like, no, I supported.

I supported.

I wonder how much of has to do with their own.

Personal contracts that might have been signed previously, but once again, with

the strike, your previous contracts aren't really supposed to matter.

See.

And that's also what people are saying, right?

A lot of content creators and a lot of celebrities, all they have to do is

claim that they signed these contracts before the strikes happened and we're

just supposed to be okay with it.

Yeah, but everybody's saying contracts.

Every, everybody signs, contracts.

What do you mean?

Yeah, every, everybody signed contracts.

It's a, you also sign a contract with the union to strike and

you're not doing that, right?

So which contract do you, are you trying to honor?

Like you're harming the process.

You ha The problem is you have all of the majority of people,

weren't we just talking about the Disney special effects artists?

They unionized.

They the ones from Marvel.

The ones from Marvel, yeah.

They're owned by Disney.

Yeah.

But they have now decided they're going to unionize.

We were talking about, we were talking about demon Slayer, right?

We were sitting there talking about demon slayer and being like, Dude,

because I told you the animation on this is just absolutely incredible.

And you were like, yeah, that's 'cause they make those people

work like 16 hours a day.

Yeah, those eight.

Oh my gosh.

Those an anime animators are just some of the most abused people ever.

It's ridiculous.

So it makes sense that over here they're in the west,

they're trying to they unionize.

But what does that do when people unionize in the west, they just ship all

the jobs off to the east or wherever.

There's not unions rather.

Where, wherever it can be cheaper, wherever they can get away with it.

Famous example being Mulan, the live action mul, Mulan.

There was so much controversy around that.

Yeah, Disney doesn't care.

They don't care.

But anyway, guys, this was us talking about this has been Film Center us talking

about Bob Iger and Disney's Future Blands.

My name's Derek Johnson a second.

I'm Nicholas Killian, and we'll see you next time.

See you.

This has been Film Center on Comic-Con Radio.

Check out our previous episodes at comic-con radio.com.

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