March Bloody March: Disney's Massive Digital Layoffs

There was a time when all I wanted was a Disney business card.  Really.  So legit.  Right?

This month’s massacre of a quarter of Disney Interactive’s heads – the division in which I would have most likely been placed – is another beat in the Dubstep anthem for Digital Transformation.

Disney Interactive, Disney’s media arm, was an answer for Disney for as long as it could be.  When the founding vision and dollars didn’t align, it was only a matter of time before Disney leadership dropped the hatchet of reconsideration.  Why?  Bolt-on vs. core business solutions.  Bolt-ons add bloat and adding additional weight to an already slow organization kills forward momentum.

How can we be sure?  The formula is industry agnostic.  When Digital as a discipline isn’t holistically weaved throughout the fabric of an organization, it has no shot at working effectively.  When organizations treat it like "Digital" is always somebody else’s job or just a quick hit generator, instead of a path to better operations, we eventually see things grind to a halt.

The bird’s eye view makes things simple.  In the late 90s, Disney reacted to a market need for “web presence,” then “digital ad sales,” and finally, the most ambiguous of all for traditional organizations: “digital products.”  Their reaction was Disney Interactive.

Disney Interactive’s admission of cluelessness and defeat came in the form of various acquisitions over the years: Infoseek (1998, Internet Portal), Living Mobile (2005, EU Mobile Game Developer), Kaboose (2009, Website Properties), Playdom (2010, Social Network Game Developer), Tapulous (2010, Software Developer), Togetherville (2011, Pre-teen Social Network).

Now, with yet another purchase, Maker Studios for $500M, it seems Disney hasn’t learned their lesson after 17 years of sheer insanity.  If all you do is hunt trends and fads, your solutions will be trending solutions, not longstanding ones.  As creators and owners of arguably the greatest “content” in history, they should know better.  But again, the cycle of bolt-on surface fixes is insidious.  Disney's become addicted to chasing shiny objects and quick solutions.

But there might be hope.  Disney is making a smarter business decision by having Maker Studios report directly to James A. Rasulo, Disney's CFO, as an independent business unit to serve all other business units.  This means they know that technology, data, programming capabilities, and online brand building is crucial to more than just the web and games divisions.  Investors should be happy even if there is a slight dip while Maker becomes profitable.

It is for this reason that Disney makes a comeback as a candidate with whom KIMBA would like to partner. They are making smarter business moves with their acquisitions and this might just end up working out.  We’ll certainly find out over the next 12-24 months.

Lastly, big shout out to Ynon Kreiz!  Yo Ynon, what’s next?  Lots of DIS money to be spent.