Disney

Posted on October 16, 2016 by jlrose

by JACK ROSE, AUDREY LEW, and BRITTANY ORTIZ

Disney Logo [1]

Background

Disney is a leading producer, owner, and distributor of media that owns, among many other things, broadcast network ABC; movie studios Pixar, Walt Disney Animation, Marvel, and Lucasfilm; Walt Disney Parks and Resorts that attracted nearly 150 million people in 2015 [2]; and cable sports network ESPN [3]. Between ABC, its affiliates, and ESPN, Disney operates more than 300 channels worldwide, while its movie studios own the rights to The Avengers family and Star Wars [4]. The last Star Wars release became the highest grossing domestic film earlier this year and with another releasing this December, the company’s film division remains strong [5]. However, fluctuating results on the television side have led Disney to invest in new technologies and a desire to expand international reach birthed a new theme park in China, which opened earlier this year.

Corporate Structure

CEO Bob Iger [1]

Disney’s Chief Executive since 2005, Bob Iger helmed the acquisitions of Pixar, Marvel, and Lucasfilm. Since Iger’s promotion from Chief Operating Officer, Disney’s stock price has risen more than $70 while it’s TV division has come to account for half of the company’s profit [6]. Nearing the end of his career, Iger has repeatedly delayed his retirement and most recently set 2018 as the expiration date for his own tenure. His last task will be selecting his successor, after a recent candidate failed to last as heir.

Disney’s Organizational Chart [7]

Beyond Iger, various chairmen run each of Disney’s major compartments and the company’s board of directors is comprised of 11 members. However, it is this organizational chart, distributed by Walt Disney Studios in 1943, that largely explains Disney’s management philosophy [7]. Rather than the typical hierarchy, the chart displays an interlocking web of managers, producers, and creators that are needed to produce a film. This organization is intended to encourage creativity and teamwork by emphasizing collaboration rather than chain of command. Each role supports, instead of merely instructing, another.

Financials

Annual revenue, profit, and net income have increased yearly since at least 2013, as has Disney’s valuation of its assets and balance sheet as whole. Disney’s revenue dwarfs that of most of its competitors in media, exceeded only by Sony and other conglomerates that produce and own as much content as Sony and Disney. Disney’s stock price is similarly higher than most competitors, currently hovering around $100 [8]. The company’s price per share seems to be inextricably linked to the success of ESPN, which is struggling with subscriber losses and adapting to the future (see “Investments in Technology” section below).

Disney’s Stock Price for last two years [8]

Investments in Technology

MLB Advanced Media Logo [11]

Disney’s future focus is in technology as it attempts to revitalize ESPN and stay on the cutting edge of content creation and media. Primarily, in August the company invested $1 billion for a 33% stake in Major League Baseball’s BAMTech, a leading television streaming company. The deal included an option for Disney to take a majority stake in the company down the road. The first collaboration between the two will be BAMTech’s creation of a standalone streaming service for ESPN, which Disney hopes will help ease the network’s subscriber losses and struggling ratings. BAMTech adds 7.5 million paid subscribers across a multitude of streaming platforms to Disney’s already massive user base [9]. The investment in BAMTech isn’t completely black and white, however. Television’s trend toward skinny bundles complicates the relationship between every content producer and cable provider, with Sling, DirecTV, Hulu, and more getting into the live over-the-top business. Disney’s BAMTech investment suggests a possibility that Disney itself could run a direct-to-consumer cable distributor itself [10].

Throughout this year, rumors swirled about the possibility of Disney purchasing Snapchat, Twitter, and/or Netflix, though analysts agree: none of these are likely. Twitter’s struggle to remain profitable and stabilize its stock price creates nonstop purchase rumors, but it seems that Disney doesn’t stand to benefit much from a Twitter acquisition [11]. Snapchat has proved to be a unique outlet for Disney’s content, but doesn’t seem to be a likely purchase for the social media company [12]. Though the investment in BAMTech signifies Disney’s interest in streaming, Netflix doesn’t appear to be a perfect partner, either. Netflix’s dominance in the streaming market has waned as challengers such as Amazon and Apple have stolen subscribers [13].

Box Office

Star Wars Moana banner [17]

After the November 23 release of Moana, Disney is nearing $2.5B in total domestic box office gross for 2016 [14]. With the top four grossing films of 2016 thus far (Finding Dory, Captain America: Civil War, The Jungle Book, and Zootopia), the company topped $6B in worldwide box office gross for the first time in its history [15]. This new record will only increase as Moana and Doctor Strange continue to screen and Disney’s final 2016 film releases: the newest film, Rogue One. Beyond the box office, movies like Star Wars, Finding Dory, and Moana provide massive profits in merchandising, both in America and abroad. In 2013, Disney merchandise sales brought in over $40B.

Theme Parks

On June 16, Disney’s fourth international theme park opened in Shanghai, with the tagline “authentically Disney, distinctly Chinese” [16]. The company avoided western branding and symbols by changing street names within the park and by filling the concessions with 70% Chinese food. Traditional Disney characters can be seen wearing traditionally Chinese silk costumes and speaking the native language. The Shanghai Disney Resort seeks to take advantage of the massive potential offered by China and the wider Asian market.

Shanghai Disney Resort [18]

Conclusion

Despite Disney’s losses in television, its massive successes at the box office in 2016 have made up for it. The control of Star Wars, Marvel, and Pixar promises success in the motion pictures department nearly every year. Further, Disney’s land holdings of theme parks underscore the company’s finances with physical propoerty–while most media conglomerates own intellectual property, Disney holds more tangible assets as well. The company’s investments in technology put it in a good place for the future–its theme parks’ MagicBands have already proven successful. But while the company must hope these investments pay off, it also faces the uncertain future of navigating an evolving marketplace with a new CEO. Iger’s selection of his successor is by far the most important storyline to follow within the massive world of Disney.

Sources

About The Walt Disney Company. Retrieved November 25, 2016. https://thewaltdisneycompany.com/about/
The Data Team. June 16, 2016. The Economist. A New Disney Theme Park Opens in China. Retrieved November 25, 2016. http://www.economist.com/blogs/graphicdetail/2016/06/daily-chart-11
Johnson, Madeleine. June 16, 2016. Zacks. Your Complete Guide to All the Things Owned by Disney. Retrieved November 25, 2016. https://www.zacks.com/stock/news/220682/your-complete-guide-to-all-the-things-owned-by-disney
Carpenter, J. William. October 29, 2015. Investopedia. Top 5 Companies Owned by Disney. Retrieved November 25, 2016. http://www.investopedia.com/articles/markets/102915/top-5-companies-owned-disney.asp
Brevet, Brad. January 7, 2016. Box Office Mojo. ‘Star Wars: The Force Awakens’ Becomes Highest Grossing Domestic Release of All-Time. Retrieved November 25, 2016. http://www.boxofficemojo.com/news/?id=4142&p=.htm
Belloni, Matthew. June 22, 2016. The Hollywood Reporter. In-Depth With Disney CEO Bob Iger on China Growth, ‘Star Wars’ Reshoots and Political Plans: “A Lot of People Have Urged Me to [Run]”. Retrieved November 25, 2016. http://www.hollywoodreporter.com/features/bob-iger-interview-star-wars-905320
Hirasuna, Delphine. August 7, 2009. At Issue Journal. Walt Disney’s Creative Organization Chart. Retrieved November 25, 2016. http://www.atissuejournal.com/2009/08/07/walt-disney%E2%80%99s-creative-organization-chart/
Yahoo! Finance. The Walt Disney Company (DIS). Retrieved November 25, 2016. https://finance.yahoo.com/quote/DIS/financials?p=DIS
Brown, Maury. August 9, 2016. Forbes. Disney Buys $1B Stake In MLB’s BAMTech, To Launch ESPN Streaming Service. Retrieved November 25, 2016. http://www.forbes.com/sites/maurybrown/2016/08/09/disney-co-makes-1-billion-investment-becomes-minority-stakeholder-in-mlbams-bamtech/#1f44b1915972
Markman, Jon. August 23, 2016. Forbes. Disney Streaming Into A Perilous Future. Retrieved November 25, 2016. http://www.forbes.com/sites/jonmarkman/2016/08/23/disney-streaming-into-a-perilous-future/#4f34784210f7
Kafka, Peter. September 26, 2016. Recode. Why Disney won’t buy Twitter. Retrieved November 25, 2016. http://www.recode.net/2016/9/26/13062276/disney-won-t-buy-twitter
Munarriz, Rick. April 9, 2016. The Motley Fool. Disney Isn’t Buying Netflix or Snapchat. Retrieved November 25, 2016. http://www.fool.com/investing/general/2016/04/09/disney-isnt-buying-netflix-or-snapchat.aspx
Cohan, Peter. October 5, 2016. Forbes. Why Walt Disney Should Not Buy Netflix. Retrieved November 25, 2016. http://www.forbes.com/sites/petercohan/2016/10/05/why-walt-disney-should-not-buy-netflix/#710bdc20395d
Box Office Mojo. Studio Market Share. Retrieved November 28, 2016. http://www.boxofficemojo.com/studio/?view2=yearly&view=parent&p=.htm
Tartaglione, Nancy. November 6, 2016. Deadline Hollywood. Disney Crosses $6B At Global Box Office; First Time In Studio’s History. Retrieved November 28, 2016. http://deadline.com/2016/11/disney-crosses-six-billion-dollars-global-box-office-studio-record-doctor-strange-finding-dory-zootopia-captain-america-1201849749/
Gardner, Hannah. June 16, 2016. USA Today. Disney’s new Shanghai park is supersized. Retrieved November 28, 2016. http://www.usatoday.com/story/news/world/2016/06/15/disneys-new-shanghai-park-supersized/85920926/
Disney. Moana. Retrieved November 28, 2016. http://movies.disney.com/moana

Buenavista/Disney Pictures

Posted on December 1, 2014 by kawalek

by Lynn Walek

Image Courtesy of the Official Disney Fan Club (www.d23.com)

Key Executives

Robert “Bob” Iger Alan F. Horn
Chairman & Chief Executive Officer Chairman
The Walt Disney Company The Walt Disney Studios

Robert “Bob” Iger – Image Courtesy of The Walt Disney Company

Alan F. Horn – Image Courtesy of The Walt Disney Company

History

The Walt Disney Company was founded in 1923 when Disney brothers Roy and Walt sold the Alice Comedies. The star of the company, Mickey Mouse, was not seen until five years later when Steamboat Willie, the first sound cartoon, was released in 1928. The Disney Company continued to push boundaries releasing the first animated feature film, Snow White and the Seven Dwarfs, in 1937. [1] The company has grown and expanded into many aspects of entertainment. [2] Currently Walt Disney Studios owns Walt Disney Animation Studios, Pixar Studios, Walt Disney Studios Motion Pictures, Marvel, Touchstone, and Disneynature. In 2012 Disney purchased Lucasfilm, which most notably includes the Star Wars franchise. [3] [4]

Finances

With the end of the 2014 fiscal year, Disney announced a record year. The fourth quarter earning report quotes CEO Bob Iger as saying: “Our results for Fiscal 2014 were the highest in the Company’s history, marking our fourth consecutive year of record performance.” [5] This year’s revenues are up from 45 billion to 48.8 billion, an eight percent increase. Net income increased from 6.1 billion in 2013 to 7.5 billion in 2014, a 22 percent increase. With the future slate Disney is set to release “21 tentpole movies…over the next three years, compared to only 13 in the last three”. [6] The increase in “tentpole” movies means Disney has the opportunity to continue breaking records as it expands franchises under its many banners. [5] [6]

Current Slate

Image Courtesy of IMDb

Alexander and the Terrible, Horrible, No Good, Very Bad Day
Released October 10, 2014 this film is based on the popular children’s book of the same title. Despite comedy giant Steve Carell and well known actress Jennifer Garner headlining the film, it was only a mild success. It opened at number three at the box office and quickly fell out of the top five. It grossed 63 million domestically and 82 million worldwide with a production budget of 28 million. [7]

Image Courtesy of IMDb

Big Hero 6
Released November 7, 2014, this is the first animated Marvel film. Disney CEO Bob Iger had high hopes for the film when he spoke to investors the day before its release, and it did not disappoint. [6] It grossed more than 205 million worldwide with a production budget of 165 million. It opened as number one at the box office and then held second place during its second and third weeks. The film follows the adventures of Hiro, a young boy, and his robot best friend, Baymax who according to IMDb “team up with a group of friends to form a band of high-tech heroes.” [8] Big Hero 6 has faced little direct competition until the November 26 release of Penguins of Madagascar. [8] [9] [10]

Image Courtesy of IMDb

Into the Woods
This film will be released on December 25, 2014 (see trailer below [a]). This is a big screen adaptation of the Stephen Sondheim musical and boasts big name actors Meryl Streep and Johnny Depp. The film will feature a new song written for Streep. The film focuses on a witch (Streep) teaching lessons to various fairytale characters such as Little Red Riding Hood, Cinderella and Rapunzel. The film will be up against another family musical, Annie, as well as the third installment of family comedy franchise Night at the Museum: Secret of the Tomb. Both of these competing films will be released before Christmas on December 19. [10] [11]

Future Slate

Because Disney’s fiscal 2014 is over, the emphasis is on what is to come in the next fiscal year. In his address to investors on November 6, 2014, Bob Iger emphasized the future slate and franchise expansion. Disney has released several long term plans. [6]

Marvel

Image Courtesy of marvel.com

Marvel was acquired in 2009 and has become an instrumental part of Walt Disney Studios success. Currently Disney is working on two Marvel franchises, The Avengers (2012) and Guardians of the Galaxy (2014). There are 11 Marvel films planned for the next five years (see table 1). [6]

Table 1 Table created in Microsoft Word by Lynn Walek [6]

Image Courtesy of IMDb

The next release on the Marvel docket is Avengers sequel Age of Ultron, which hits theaters in May 2015. Director Joss Whedon will return to lead stars Robert Downey Jr., Chris Hemsworth, Chris Evans, and Mark Ruffalo who will reprise their superhero roles. The trailer (see below [b]) which was originally set to air on October 28 during Marvel’s Agents of S.H.I.E.L.D. was leaked on October 22. Marvel and Disney responded by quickly posting the official trailer which got 34.3 million global views in its first 24 hours. This number shattered the previous record held by the Iron Man 3 trailer. [12] [13]

In the 2014 fiscal year, Guardians of the Galaxy had the highest domestic gross and the second highest worldwide gross. It grossed more than 770 million dollars worldwide. [14] Additionally, the success of Big Hero 6 proves that Marvel can produce successful animated films and they will likely continue to do so. [9]

Star Wars

Image Courtesy of lucasfilm.com/starwars

Image Courtesy of IMDb

Disney will produce a new trilogy of Star Wars movies: Episodes VII, VIII and IX. The title and teaser trailer for Episode VII have now been released. It will be called Star Wars: The Force Awakens and the trailer can be seen below [c]. This film will be released December 18, 2015. Episode VIII will be released in 2017 and Episode IX will be released in 2019. In 2016 Disney will release the first of their “stand alone” films within the Star Wars universe. [6]

Pixar

Image Courtesy of official Disney Pixar Facebook

Image Courtesy of IMDb

Noticeably absent from the 2014 slate Pixar will be back in June 2015 with Inside Out. This film is not a franchise expansion but it lists big name stars, Amy Poehler, Mindy Kaling, and Bill Hader. Poehler, Kaling and Hader will voice three of five emotions from inside the mind of a little girl. Pixar will continue two successful franchises in 2016 and 2017. Finding Dory, sequel to Finding Nemo, will be released in 2016. The recently announced Toy Story 4 will be released in June 2017 and boasts the return of director John Lasseter who was at the helm of the first two installments of the Toy Story franchise. Lasseter is also the chief creative officer of Walt Disney and Pixar Animation Studios and principal creative advisor of Walt Disney Imagineering. [6] [15]

Disney Pictures

Image Courtesy of waltdisneystdudios.com

Image Courtesy of IMDb

Following the success of Maleficent, which grossed 757 million dollars worldwide, Disney will continue to produce live action fairy tales. [16] The official Cinderella trailer was released on November 19 (see below [d]). This film is scheduled to be released in March 2015. Other live action fairy tales announced are The Jungle Book and Alice in Wonderland 2. Disney will also release another film in the Pirates of the Caribbean franchise. [6]