The Medium identifies essential signals on how technology is shaping creativity, and how creatives are evolving in response. Re-Imagineering Disney's FlywheelThe content business is down 34%. Parks carry the profits. D'Amaro's job is building the database-driven flywheel nobody at Disney wants.
[Author’s Note: This is free for all subscribers.] Yesterday, former Disney CEO Michael Eisner tweeted his advice to new CEO Josh D’Amaro:
Eisner elegantly distilled Disney’s famous flywheel model: A “flywheel” is a connected ecosystem of businesses where improvements in one segment boost performance in others. Walt Disney’s famous 1957 multispoke diagram (below) remains the paradigm for media business flywheels. Disney’s Q1 FY 2026 earnings present an obvious and immediate challenge to this advice and the flywheel: Theme parks and experiences generated $3.31 billion in operating profit, a 6% increase from a year earlier. Movies, television and sports generated $1.29 billion, a 34% decline. Eisner’s advice reflects three deeper disconnects within the business D’Amaro is inheriting—particularly the structural challenges of a flywheel that framed digital media as a distribution channel rather than entirely new infrastructure.
Disconnect 1: A Need for DataEisner’s advice echoes a statement Iger emphasized at his last official appearance as Executive Chairman in June 2020, shortly after Bob Chapek had taken over “In a world and business that is awash with data, it is tempting to use data to answer all of our questions, including creative questions, I urge all of you not to do that.” It mirrors Eisner’s point that “every transaction at Disney — parks, consumer products, movies and television — starts with creativity.” D’Amaro is now hearing the same message that Chapek heard: Data-driven decisions about creativity are toxic to the Disney brand. The challenge is that the Parks & Experiences and Consumer Products line items that D’Amaro oversees are intensely data-driven businesses. The streaming business he will inherit next month is also data-driven. I have written frequently about the flaws in Iger’s bet on streaming, one he funded with $40 billion in additional long-term debt and unprecedented operational changes—which he wrote about in his autobiography “The Ride of a Lifetime.” But the main one was that Iger and his executive team were Hollywood studio types and not engineers. They had no background in building DTC businesses. They failed to appreciate that streaming is technologically, operationally and philosophically different from traditional theatrical and television distribution. Above all, they failed to appreciate that content Disney believed merited nine-figure production budgets had little value to streaming consumers. Chapek came from a DTC background, and framed his opportunity as such. He told investors back in 2022 that theme parks were Disney’s “original direct-to-consumer business” and streaming was “our newest direct-to-consumer business”. In the streaming era, the customer relationship—not content—should be the engine, and Disney’s future lay in a data-driven model analogous to Amazon Prime that would connect the two. Five months later, Chapek was unceremoniously booted by the board and replaced by Iger. Chapek was right about the business and wrong about the politics. Even if he understood the technological, operational and philosophical overlaps between streaming and Parks, he neglected to build relationships with the Hollywood creative community. Iger never truly left Disney (as CNBC’s Alex Sherman previously documented). Disney’s corporate culture also had a well-documented track record of failing to grasp these overlaps, particularly in gaming and YouTube. The challenge for D’Amaro is that his skillset is closer to Chapek’s than Iger’s. That did not get in the way of his anointment as CEO. The question for Disney and its investors: Where does D’Amaro’s worldview account for Hollywood creativity in ways Chapek’s aggressively did not? Disconnect 2: Creativity Did Handle Profits. It No Longer Does.One big challenge for Iger’s and Eisner’s guidance on creativity: the business model is less profitable than it used to be. Under both Iger and Eisner, cable generated recurring revenues. Home video (VHS, DVDs)—a $25 billion marketplace at its peak in 2005—created “free money” for additional investment in independent film and television. Both created new windows of opportunity for theatrical disappointments to become profitable. Cable delivered 40% profit margins, VHS 46% and DVD 66%. Now cable margins have declined to 31% (Linear) and 24% (Sports). Streaming delivered 5% margins on $25 billion in revenue in 2025. The implication is that Iger’s and Eisner’s worldviews may be well-intentioned, well-informed and outdated. Parks and Experiences have long driven a majority of profits for Disney—as much as 60% in a fiscal year—but now they seem to be the engine for profits. Both Eisner and Iger were arguing that in the flywheel model, creativity is the hub and the spokes—theme parks, movies, television, streaming, consumer products—all serve that creativity. Chapek lacked “bedside manner” both internally and externally—with Hollywood talent like Scarlett Johansson in particular—in communicating that in the DTC era, that business logic is outdated. Creativity is important, but consumers value it differently than before. Disney’s corporate culture under Iger never fully embraced the creator economy, first by actively undermining the $750 million acquisition of Maker Studios and then more recently, its $1.5 billion partnership with Epic Games. The latter has reportedly been “plagued by the slow pace of the decision-making at Disney, with signoffs needed from so many different divisions.” D’Amaro’s challenge is to orient this culture towards a different future, one that Iger never fully embraced nor understood. Disconnect 3: Iger’s Streaming Strategy Overpromised & UnderdeliveredThe question Iger never answered: Why would a media company like Disney be successful in building and maintaining a database-driven business? Iger championed Disney+ as a content distribution platform—a showcase for Marvel, Star Wars, Pixar and National Geographic. The pitch to investors was that Disney’s unmatched IP library would drive subscriptions the way it once drove cable carriage fees. Content was the engine. Customer satisfaction would follow. Former Netflix CEO and Executive Chairman Reed Hastings challenged him on this logic, as Iger shared in a 2022 interview on Andreessen Horowitz’s a16z podcast: “[He] tried to convince me that there was no way we could do it. ‘You won’t have the platform. You don’t know how to manage things like busted credit cards, all the issues with geotargeting and so many different factors.’ We had no ability to do any of that.” Hastings was implicitly asking a simpler question: “If Disney cannot figure out the software then why will people subscribe? How will Disney grow and maintain the scale that advertisers want to buy and investors want to own?” These are customer-centric technical problems, not content-centric problems of delight. Iger treated them as secondary. Streaming advertising revenues were down 1% year-over-year in FY 2025. The stock is down 25.4% since reaching 152.94 two weeks after the launch of Disney+. The question remains unanswered because answering it requires acknowledging that streaming is, at its core, a database business. Content delivered by Netflix serves technical problems like retention curves, churn reduction and ARPU optimization. Iger and his management team treated them as secondary, most likely because most retail investors do not think about these issues and only care about subscriber growth and profitability. An attempt to combine Hulu and Disney+ operationally and technologically took five years at Disney whereas it might take one year, maximum, at a technologically-savvy company. Why drown a growth story in technicalities when your brand is a global media powerhouse owning brands like “Star Wars” and Marvel? But they are primary—and Chapek, who messaged to Wall Street that he understood this, was ousted. The Biggest Disconnect: Streaming vs. The Flywheel
Odds are that D’Amaro—who worked under Chapek both before and after taking over Parks—understands the basics of all of the above. One of the most important questions D’Amaro needs to address is whether Disney’s database-driven businesses are the spokes or the hub of the flywheel. Eisner and Iger argue that they are spokes. But financially, Disney’s Parks and Experiences business is now the hub. From Walt Disney through Robert Iger, creativity was the engine because distribution was controlled. In D’Amaro’s Disney, distribution is increasingly uncontrolled and creativity generates 34% less profit than last year. The most successful flywheel models in digital media put customer satisfaction first and content second. Amazon built it with Prime. Anime streaming service Crunchyroll built it. The New York Times is building its own version which it calls a “daisy”. Disney and ESPN have not. A digital media flywheel requires database infrastructure to support its IP libraries. As I wrote in “ESPN ‘Flagship’ & The Agency of Sports Fandom”, ESPN (and Disney more generally) treats fandom as passive consumption locked into live viewing. NYT treats it as an active choice to spend money across complementary interests. Parks generates the richest first-party data Disney owns (purchases, wait times, dining preferences, MagicBand behavior). In a model where the hub is the customer profile—and Parks is the most profitable business—the opportunity is to leverage Disney’s creativity to build services consumers can assemble around their own interests. Consumer products should close the loop—what a family streams should inform what merchandise appears in their park app, and vice versa. Disney needs to build one of the best database infrastructures in the world. Outside of its Parks & Experiences business, it has not (though according to a recent conversation, that may be changing). That sales pitch to investors is boring. It does not make headlines. It does not lend itself to flywheel diagrams with arrows pointing in circles. Even Netflix is rethinking its flywheel pitch, which is database-centric: offering fans of Netflix IP like “Stranger Things” mobile games and live events. D’Amaro’s challenge is not continuing Iger’s strategy. It is acknowledging that streaming is a technical business—and building the flywheel nobody at Disney wanted to build, but but which fans need in the DTC era. Essays related to today’s analysis:
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Re-Imagineering Disney's Flywheel
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