Disney in Danger of Falling Behind Major Studios

Rich Ross, the Chairman of the film unit at Wald Disney Co. resigned after the company’s devastating $200 million loss on John Carter, a figure rumored to be the biggest ever for a single movie. And because of Ross’s resignation, Disney CEO Robert Iger’s franchise-focused film release strategy is placed in even further doubt.

This year, Disney has cut its number of film releases in half to only 12 because of this strategy of releasing fewer, larger-budget, and what they speculate to be extremely popular, films that have the potential to become long-lived, consumer franchises. Essentially, Disney is betting big on every single movie they come up with. The strategy seemed promising at first, as most of these big-budget movies are built around marketable characters from Pixar and Marvel, except that it failed spectacularly with John Carter, which led to a quarterly operating loss of $120 million for the studio, the first since Ross succeeded Dick Cook as Chairman back in October 2009.

Currently, Disney ranks seventh among studios, with domestic ticket sales of $186.7 million as of April 15. This number and ranking puts Disney the last among major studios and also behind Lions Gate, a rising star in Hollywood with the biggest hit of 2012 so far, The Hunger Games.

With Marvel’s Avengers making its debut on May 4 worldwide, Disney is expected to regain some strength in the competitive industry of media and entertainment as this movie is expected to be among 2012’s top-grossing pictures with an estimated $370 million in domestic ticket sales alone. Further down the line, Disney is set to release Pixar’s Brave in late June. Let’s hope these franchise-focused films can help put Disney back in the run for being the leader among the Hollywood studios.

Jennifer Zhang

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