After 100 years of entertainment innovation, Disney is at a crossroads

By Ali Levin, Anurag Rao, Adolf Arantz and Dea Bankova

(Reuters) – As Walt Disney turns 100, investors worry it is starting to show its age. The stock price fell to its lowest level in nearly nine years as the company stumbles into the streaming era.

But adapting to the times is not a new challenge for Disney, but rather has been a point of survival throughout the company’s history.

A century ago, when Disney was a single person rather than a $150 billion global company, emerging sound and color technologies shook up the silent film industry.

But Walt Disney had a strong motivation to embrace these new tools—to capture audiences.

“He wanted his animation to be believable, he wanted it to go beyond what we normally think of as animation,” said Chris Pallant, professor of animation and screen studies at Canterbury Christ Church University in the United Kingdom.

Disney Studios opened in Hollywood in 1923—geographically and conceptually distant from the animation centers of New York. Disney envisioned a future in which animated films would earn the same respect as live-action movies shot on the street.

He was obsessed with quality and poured money into creating cartoons that would appeal to his audience. He writes that observation of the real world is key and animation must have “a basis in fact so that it can have a richer sincerity.”

The studio formalized 12 principles of animation that transform static sketches into living characters on screen. Veteran animators taught the principles to each of the new artists who joined the studio to ensure consistency.


Walt Disney entered the animation scene as a young businessman, well positioned to take advantage of existing techniques and adopt new tools. He and his studio used sound, color and 3D camera technology in an organized and scalable approach that wasn’t necessarily cost-effective, but produced high-quality animations.

It seemed that every time Disney’s projects were financially successful, he used the money to double down on his aspirations for the next film. “In a sense,” Pallant said, “Disney survives on its own ambition.”

Disney Studios has been able to lead the Western animation industry for decades through its innovation and dedication to compelling stories. But his reign was not to last as new technology arrived and Disney was late to welcome it.

At the turn of the century, Pixar’s advances in computer-generated animation overshadowed Disney’s traditional hand-drawn style, namely with the first fully computer-generated animation, Toy Story. But this time, Disney didn’t have to innovate its way out of its problems. It can rely on a new tool: money. Merchandise, theme parks and cable TV lined the company’s pockets for decades. Disney bought Pixar in 2006 for $7.4 billion, and with it Pixar’s ability to mesmerize audiences with pixels.

As a hand-drawn studio, Disney’s eventual recognition of computer animation is an important moment, said Pallant, who is also president of the Society for the Study of Animation. “I think it’s an echo from a previous life,” Pallant said. “They weren’t afraid to move with the times. It shows you’re willing to reinvent yourself as a 75- or 80-year-old company.”

Now at the 100-year mark, streaming presents another challenge. Disney’s early bets on new technology produced quality films that set the studio apart from its competitors. Later, the adoption of computers kept the studio as a major player in animation. Now, shareholders are keeping a close eye on what Disney will do as it moves into the next century.

(Reporting by Ali Levine, Anurag Rao, Adolfo Arantz and Dea Bankova; Additional reporting by Prince Magtoulis; Editing by Julia Wolfe and Lisa Shoemaker)

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