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Editorial: Eisner strategy won’t save ABC

Oct 7, 2002  •  Post A Comment

Disney Chairman Michael Eisner unveiled his plan last week to clean up his firm’s financial mess: The Walt Disney Co. will pursue a “national duopoly” strategy aimed at cutting costs by integrating ABC TV Network dayparts with the company’s corresponding cable operations.
For example, management and programming will be shared between ABC Sports and ESPN, between ABC daytime and SoapNet and between ABC prime time and ABC Family.
It’s an approach that will probably please the bean counters by producing quantifiable short-term savings. But it doesn’t make sense in the long run. For one thing, it fails to account for the needs of the network’s affiliates. ABC stations can’t be thrilled to hear that on top of all the other problems that come with being part of a network that has been in a ratings tailspin they will now have to compete against their own programming on Disney’s cable outlets.
Further, it does nothing to provide the one thing ABC needs most: good shows that can bring back viewers. By putting the emphasis on cost containment and not on creative development, Disney is condemning ABC to remain a third-class network.
The company’s problems run too deep for a quick fix. Every Disney division is struggling. Its theme parks have seen dramatic declines in attendance. Its movies, especially those produced in-house, have failed to attract the large audiences associated with past Disney productions. And the ABC Network, after a brief flirtation with ratings success a few years ago thanks to “Who Wants to Be a Millionaire,” finds itself in a crisis.
In an attempt to stop the bleeding, Mr. Eisner has seen fit to cut costs-a “less is more” business decision roughly akin to the gag reflex. It’s the same kind of shortsighted thinking that fueled Disney’s mishandling of the hit “Millionaire” show, which it exploited until it destroyed the franchise through overexposure.
The problem at Disney in the Eisner era has been that it’s always about the bottom line-a strategy that pleased shareholders in the past. But it’s an unbalanced approach, and the price of pursuing it over the long haul is now becoming painfully obvious. Disney could learn from the NBC model: Keep costs reasonable but not at the expense of quality programming. Put on good shows that will attract viewers. Make money.
Disney will never reverse ABC’s fortunes by closing ranks the way it did this season, when 22 of the network’s 23 pilots were produced in-house by Disney’s Touchstone Television division. It must expand its vision to include the creative resources available in the rest of the industry, as it did with its movie division when it joined with Pixar to create one of Disney’s few recent hits, “Monsters, Inc.”
Mr. Eisner would be wise to find a strategy that puts the “show” back in show business. He must accept that Disney will have to spend money to make money, and that the company can’t do it alone. And he should remember that ABC’s affiliate stations are partners in the network and include them in the process of developing a broad-based plan to bring ABC back from the grave.