Disney’s Bob Chapek on Scar-Jo Aftermath and “Don’t Say Gay” Impact – The Hollywood Reporter

In the midst of Disney’s D23 presentation of upcoming material from Lucasfilm and Marvel, as well as AvatarDisney CEO Bob Chapek made himself available for a 15-minute interview with The Hollywood Reporter. The conversation touched on issues ranging from the handling of the Scarlett Johansson conflict and the “Don’t Say Gay” controversy in Florida as well as ticket pricing and more.

This presentation was a lot of Disney +. It seems like all that stuff had its origins on the big screen – all the Marvel universe – everything launches [from movies] and you have the theme parks, you have the cruise ships, you have so much at stake in launching franchises. With a lot of investors re-evaluating “all in on streaming,” are you as well?

It’s important to go back to when Disney + was launched and what the hypothesis was about how much food you had to give that system for it to truly maximize its potential, and I would say we dramatically underestimated the hungry beast and how much content it needed to be fed. As we were realizing that, COVID hit and we were completely constrained in terms of making new things. So we had very precious few things that were trickling into our system, and we had to make the very difficult decision where to put those things. When the theatrical world was shut down because of COVID, it was kind of an easy decision. You either postpone it for a couple years – and we started postponing, as you remember – but we also had this sort of empty pipeline into this very important strategic initiative for the company, which was Disney +. Our viewers, our subscribers were asking for more so we started diverting content that was originally intended for theaters before Disney + was even envisioned. But at that very same time, we started a very methodical plan to try to determine how much content we as a company would need to fully take advantage of the opportunities in theatrical, because we love the theatrical business, and how much we would need to be able to feed the content pipes that were leading into Disney + so that we can embrace that opportunity… Now that production is back fully and we have a full understanding of what’s needed, right about now – this fall – we’re in a position to fully program theatrical exhibition, without having to steal content from one place or another, as well as our streaming services.

Do you think you can launch a franchise – that thing that turns into a theme-park attraction – on a streamer? Is there a film that has ever been made or a series that leads you to create an Avatar attraction? Where is the proof of that?

Absolutely. We fully believe that. We’ve had titles in the past that, frankly, we put out in theatrical exhibition world [like] Encanto. It was a modest success theatrically and then we put it into Disney + and it shot up to No. 1. I don’t have to tell you the phenomenon it became from a merchandise standpoint and from a music standpoint and how many more people saw it on Disney +.

Do you think the theatrical component was essential or could you have done it without?

I think there are films where theatrical distribution is essential. I think [with] big blockbusters, there are titles that would be well-advised to be launched theatrically and then go onto Disney +, but I don’t think that is necessary for a franchise to be born. We have flexibility. This is a word I’ve used now since the beginning of the pandemic, when I first got this job…. There’s a lot of folks in the business, in the industry, that want the world to go back to what it was and it’s not, ’cause the consumer has moved on. Ultimately everybody who’s in this business caters to one entity, and that’s the consumer. The business moved on. That doesn’t mean we’re not going to take great Marvel and Star Wars movies, and Avatar, and put them first in theatrical. We will because it’s a wonderful way to experience those films. But that does not mean that everything, for it to be credible or for it to eventually turn into a Disney franchise, has to go through that.

You come in and Wall Street was saying, “Go all in on streaming.” Then Netflix hits this big bump and they pivot. How do you process this Wall Street short-term, fickle thinking?

When we went to the 2020 investor conference, we gave guidance on two factors: One was [subscribers], which is where all the focus was at that time. But even when profitability was not a focus whatsoever by Wall Street on streaming, we gave a profitability guide on that same day. We knew that the frothiness of the streaming business in the eyes of investors would moderate at some point, we didn’t know when. And profitability would become as important if not more important ultimately than revenue and sub adds. For us, it’s not been as big as an internal shift as it might be for others because we’ve had foot both on the clutch and on the gas at the same time so for us, no big deal. We’re operating like we would, we’re not reducing the amount of content that we’re planning on putting into the system, or spending. We’ve said in our investor calls that the amount of content that we’re putting into the market will be essentially flat.

You’re known as a guy who cuts costs and raises prices. You’ve raised the prices pretty stiffly [for some streaming plans] and the parks. And you’ve gotten some blowback from superfans. How much can you keep raising prices and does ill will from them create a problem for the brand?

We love all our fans equally. We love the superfans, obviously. But we also like the fans that don’t have the same expression of their fandom. We want to make sure that our superfans who love to come with annual passes and use [the parks] as their personal playground – we love that. We celebrate that. But at the same time, we’ve got to make sure that there’s room in the park for the family from Denver that comes once every five years. We didn’t have a reservation system and we didn’t control the number of annual passes we distributed and frankly, the annual pass as a value was so great that people were literally coming all the time and the accessibility of the park was unlimited to them and that family from Denver would get to the park and not be let in. That doesn’t seem like a real balanced proposition. I guess it’s possible that the superfans look at that as a disadvantaging of the way they consume the park, but we’ve got to make sure that not only are we heeding the needs of our superfans, but we’re heeding the needs of everyone who travels from across the country one time every five years. We have a real high-class problem: We have much more demand than there is supply. What we will not bend on is giving somebody a less than stellar experience in the parks because we jammed too many people in there. If we’re going to have that foundational rule, you have to start balancing who you let in. … Our ticket prices and constraints we put on how often people can come and when they come is a direct reflection of demand. When is it too much? Demand will tell us when it’s too much.

You had some bumps in the beginning. If you had the Scarlett Johansson situation all over again, would you do it differently?

There were a lot of people that got a vote in how we handled that. And I was one voice, and I’ll just say that our relationship di lei with her di lei agency di lei and her di lei has never been better.

You apologized to the staff on “Don’t Say Gay.” That issue caused you a lot of problems no matter what you did. Do you feel that you have won back the staff’s trust?

These are complex social issues where we absolutely, positively want to represent the needs and the expectations of our cast members, but we also realize that sometimes in such a divided world, there’s not alignment between what possibly large constituencies of our guest and consumer base are looking for in terms of the kind of content that they want to show their kids at this particular time. What we try to do is be everything to everybody. That tends to be very difficult because we’re the Walt Disney Company. When you’re a lightning rod for clicks and for political podium speeches, the essence of our brand can be misappropriated or misused to try to fit the needs of any one particular group’s agenda. We want to rise above that. We believe Disney is a place where people can come together with shared values ​​of what an optimistic and ideal future can be. We certainly don’t want to get caught up in any political subterfuge, but at the same time we also realize that we want to represent a brighter tomorrow for families of all types, regardless of how they define themselves.

And the staff? Do they feel that from you?

We are a very cohesive, big, happy family. I think our staff saw how I stood firm during the ultimate barrage of attacks from certain political constituencies and, frankly, I think it was much stronger and much longer and much harder than they ever could have imagined and we stood our ground. So I think it’s safe to say that actions speak louder than words, and they saw resiliency and consistency no matter how strong the attacks.

Interview edited for length and clarity.

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