Disney is having a bad time of things lately, with some high profile box office flops, or at least, major disappointments. 2023 was the year it really came to a head, but the bad run seems to be ongoing.

It’s actually pretty easy to see why. It’s not that Disney suddenly decided to make movies nobody cares about. The real problem is embedded in the fact that their flagship movies cost around $200 million+ to make.

It’s not like two decades ago, where a $5 million independent movie could go on to make over $350 million, like “My Big, Fat, Greek Wedding.”

No, a $200-million movie needs to make close to a billion, in order to be profitable AND pay for all their other movies that didn’t do so well.

And then there’s streaming. As Matt Damon explained in a famous YouTube clip, they used to be able to make a lot of their profit on the backend with DVD sales, but those days are gone and streaming doesn’t pay. So in theory, Disney movies have to earn most of their money on the theatrical opening weekend.

Oh, and William Goldman’s famous maxim about Hollywood still holds true: “Nobody Knows Anything.” 

All this has essentially forced Disney into placing a lot of $200-million bets with a single roll of the movie theater dice… in a world where people are going to movies less and less. We frankly don’t envy that position. 

Which is why there’s a lot to be said for building a culture around making small bets.

The truth is, innovation is a lot less sexy than the media would have you believe. It’s more about trying things out, making lots of mistakes cheaply and quickly, and finding a way to stay alive until something finally works.

This is something that Amazon takes to heart: religiously testing new ideas and experimenting with new strategies. Most fail. But that’s not a problem.  

As Jeff Bezos said, “The good news for shareowners is that a single big winning bet can more than cover the cost of many losers.” 

The key to having good ideas is having a lot of bad ones first. `