We recently discussed the inability of Hollywood to grasp continuity. The latest layoffs at Disney (DIS) confirm this reality.
"Across-the-board layoffs are expected to hit every major domestic and international sector of the movie studio, people familiar with the plans said, including production, post-production, legal and business affairs, marketing, distribution and home video. The Burbank studio's animation operation, Miramax Films unit and its music group are expected to be spared.
"An exact number of job cuts wasn't known Wednesday, although according to people familiar with the studio's plans estimated the headcount will be reduced by 20% to 25%."
Disney says that it is to continue to return to the studio back to its roots of familiy films, realizing that there is a broader audience appeal and can offer the types of merchandise that fits in with its other businesses concerning merchandising and theme parks. They have found that family films are far more consistent and reliable as profit vehicles.
Disney's move, like other moves by its compeititors Warner Bros., MGM, and Paramount, shows how inconsistant and how far Hollywood has gone from mainstream America.
Even though there has been good news for Disney this year, they see their profits being devoured by the escalating costs of production and marketing. Not only that, but the DVD market is slowing down tremendously.
As a result of all of this Disney says that it will be dropping the number of movies it makes to 10, down from the 14-21 it has been offering over the last five years.
It doesn't matter what type of gross sales numbers are thrown around weekly, Hollywood is in serious trouble and it's not going away any time soon.
Comment Preview