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

By Ally Levine, Anurag Rao, Adolph Arranz and Dea Bankova

(Reuters) – As Walt Disney turns 100, investors fear the company is showing its age. The stock price fell to its lowest level in nearly nine years as the company stumbled in the streaming age.

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

A century ago, when “Disney” was a single person rather than a global corporation worth over $150 billion, new sound and color technologies shook the silent film industry.

But Walt Disney had a strong motivation for using these new tools – to captivate audiences.

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

The Disney Studios opened in Hollywood in 1923 – geographically and conceptually far removed from the animation centers in New York. Disney envisioned a future in which animated films would receive the same respect as the live-action films made on the road.

He was obsessed with quality and invested money in producing cartoons that resonated with his audience. He wrote that observation of the real world was key and that the animation “must have a fact-based basis so that it has even more sincerity.”

The studio formalized 12 animation principles that transformed static sketches into living characters on a screen. Experienced animators taught the principles to each of the new artists joining the studio to ensure consistency.


Walt Disney entered the animation scene as a young businessman, well-positioned to leverage existing techniques and embrace new tools. He and his studio used sound, color and 3D camera technology with an organized and scalable approach that was not necessarily cost effective but produced high quality animations.

Apparently, every time Disney’s projects were financially successful, he used the money to double his ambitions for the next film. “In a way,” Pallant said, “Disney is outliving its own ambition.”

Disney Studios has been a leader in the Western animation industry for decades through its innovation and commitment to compelling stories. But his reign was short-lived as new technology came along and Disney was slow to respond.

By the turn of the century, Pixar’s advances in computer-generated animation had eclipsed Disney’s traditional hand-drawn style, most notably with the first fully computer-generated animation, “Toy Story.” But this time, Disney didn’t have to innovate to solve its problems. It could rely on a new tool: money. Merchandise, theme parks and cable television lined the company’s pockets for decades. Disney bought Pixar in 2006 for $7.4 billion, and with it Pixar’s ability to enchant audiences with pixels.

As a hand-drawn studio, Disney’s eventual embrace of computer animation was an important moment, said Pallant, who is also president of the Society for Animation Studies. “I think this is an echo back to a previous life,” Pallant said. “They weren’t afraid to move with the times. This shows the willingness to reinvent itself as a 75 or 80 year old company.”

Now, after 100 years, streaming presents another challenge. Disney’s early investments in new technology produced quality films that set the studio apart from its competitors. Later, the studio remained a major player in the animation industry through the introduction of computers. Now shareholders are watching closely to see what Disney will do as it moves into the next century.

(Reporting by Ally Levine, Anurag Rao, Adolfo Arranz and Dea Bankova; Additional reporting by Prince Magtulis; Editing by Julia Wolfe and Lisa Shumaker)

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