Introduction

In the evolving landscape of animation, Disney resembles Craigslist in its vast, all-encompassing content offering. Renowned for its kid-friendly content and strategic acquisitions aimed at adult audiences, Disney’s extensive portfolio is increasingly difficult to manage amid industry-wide dissatisfaction with production practices, pay, and overall experience of the creatives. The moat, one could say, is shrinking. While Disney maps out its content years in advance with established characters and films, new smaller studios are beginning to chip away at the Disney dynasty. In the latter half of this decade we will continue to see new original content from smaller studios offering audiences a fresh perspective, new characters, and a quality of life that honors the creators of the characters we all fall in love with. This is the beginning of unbundling Disney. 

The Legacy of Disney

Disney is more than animation, it has been a leader of content for decades, ushering in new innovations in technology while fostering a commitment to excellence and prioritizing compelling storytelling. Disney has shaped popular culture and dominated the animation industry with their acquisitions of Marvel, Pixar, and LucasFilm cementing their role in stewarding some of the premier IP of our time. This growing dominance has also come with criticism for the giant, with their labor practices, and cultural representation causing tension. There is also the long running theme within the animation industry where creators often feel like a cog in the machine rather than a creator of cultural content. 

It is clear that Disney will continue to play a role in the content and narratives we consume as an audience, but there are cracks forming in the foundation as the technological innovations Disney has championed continue to become more mainstream and available to smaller studios and enterprises. In the coming decades Disney may find itself looking to acquire the next LucasFilm, Marvel, or Pixar as their sheer size is now a hindrance to their ability to experiment and take risks in new content. Marvel fatigue, the feeling of Marvel movies having less appeal than they used to, may also pressure the media giant to pursue something new or accelerate their future acquisitions of new content. This is ultimately why the unbundling of Disney creates a growing appeal within the animation market.

Historical Dominance 

Though the acquisitions of Marvel and LucasFilm were not primarily for animation, they enabled Disney to expand its animated content portfolio with series like 'Star Wars: Visions' and 'What If...?'. These additions serve as gateways for new generations to engage with their expansive franchises. New animated content serves as an introduction to the next generation of people they hope to have fall in love with their franchises over and over again. This dominance has also shaped what we perceive to be the type of animated content that should be made, but creativity was not meant to live in the form of a template matching content. Inevitably an audience begins to seek something new, and the studios and production platforms of tomorrow are already hard at work creating a new generation of content. Emboldened new creators, animators and writers are all looking to make their mark on the world and meeting the needs of a shifting animation market.

Challenges and Shifts: 

Shifting consumer preferences and the rise of streaming platforms pose significant challenges for Disney. Despite their extensive resources, Disney’s sheer size hampers their agility, making it difficult to pivot quickly to meet new market demands. Disney has made the template of animated films into an efficient focus, but at the expense of original creativity. The risks for Disney to embark on a new franchise or original character are infinitely greater than a small studio or production platform due to the expectations that come along with Disney content. This makes smaller studios the ideal place to develop and grow new IP while giving new directors their first chances to be more than a cog in the machine of the animation industry. Disney has focused on children for decades, so much so that an adult animation venture could have a negative impact on their brand. This is an obstacle that content alone can't help Disney overcome, they now find themselves in a situation where there are negative effects whether they do or don't develop for a growing gap in adult animation content.

The Concept of Unbundling

What does unbundling Disney mean? The term unbundling has gotten a lot more attention in the past few years as cable and streaming companies seek a way toward profitability. What I am not calling for is the unbundling of Disney+, Hulu & ESPN, or thwarting efforts like the Apple TV+ and Paramount bundle. The concept of unbundling that we are focusing on is one referenced in The Cold Start Problem by Andrew Chen and best illustrated in his description of Craigslist. If you haven’t read The Cold Start Problem, or followed the startup boom, you may not be familiar with the term “Unbundling”. The theory is that as an ecosystem grows there will inevitably be part of an organization, company, or apparatus that is harder to defend with your moat. Using Craigslist as an example we saw AirBnB unbundled the apartment finding feature and developed into a global phenomenon of hotel alternatives. Buying and selling items and collectibles transformed into Ebay as the opportunity to professionalize point to point sales changed with the internet, and opened new concepts of what a “store” could be. Alternative career paths began to form for those looking to break free of the 9-5 that defined the generations before them. Unbundling refers to the opportunities to innovate and reimagine an industry that may initially feel niche, but has capacity to grow and develop its own atomic networks.

The Niche Audiences of Animation

There is a growing content gap in adult animation, one that has the opportunity to change the dynamic of who is watching animated content. The adults that grew up on animated content are having less children than generations before them. While I don’t expect kid friendly animated content to disappear anytime soon, there is an emerging audience that is growing and seeking compelling animated content. Netflix has seen this trend with anime and has drastically increased its spending on production, as well as purchasing the rights for S Tier content to be exclusively available on their platform. Movies like Inside Out and Inside Out 2 are good examples of how a film watched by different age groups sees different movies. But what about premier animation designed for adults? Where are the animated feature films reminiscent of Reservoir Dogs, Good Will Hunting, Eternal Sunshine of the Spotless Mind? 

We can argue that adult comedy has already been unbundled from the Disney empire with Adult Swim and streaming platforms eagerly piling into productions like Rick and Morty, Solar Opposites, BoJack Horseman, and Archer. This has left an opening for smaller studios that can capitalize on specific niches within adult animation that Disney or other large studios have overlooked. Smaller production platforms like Atrium are emerging with experienced animators and storytellers from Disney, Netflix, Sony and Marvel are increasing the probability of capitalizing on these overlooked content niches. CCO Studios upcoming Mfer animated series is another example from the independent scene. The agility of these smaller platforms can allow for faster production times, lower costs, and the ability to pivot to an emerging audience segment before the larger and more cumbersome corporations have a chance to act. This can also serve as a recruiting effort by showcasing the creative freedom that awaits animators in emerging studios and production platforms allowing them to explore their creativity and identify innovative storytelling techniques. 

Conclusion

The unbundling of Disney signifies a transformative shift in the animation industry, as smaller studios rise to meet the growing demand for diverse, adult-focused animated content. While Disney remains a dominant force with its extensive portfolio, its size and traditional focus create opportunities for agile, innovative studios to capture niche markets. These smaller entities can quickly adapt to changing audience preferences, experiment with new ideas, and offer a creative freedom that larger corporations often cannot. This shift not only challenges Disney's long-standing supremacy but also heralds a new era of animation where diverse stories and fresh perspectives thrive.