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Disney Business Model

  • Disney’s business model revolves around the creation of sustainable, scalable brands that are based on Disney characters and stories.

Table of Contents

Understanding Disney’s business model

Disney characters are some of the most recognizable and long-lived in the world.

Mickey Mouse made his first cartoon appearance in 1928 while Snow White and the Seven Dwarfs debuted in a feature animated film in 1937.

Since that time, Disney has created over 2,000 characters with countless princes, princesses, villains, and heroes.

These characters and the stories they feature in are fundamental to Disney’s business model .

The company turns them into brands that are marketed to children and adults alike, and since Disney owns the intellectual property, it has control over who can profit from its vast portfolio of brands.

The assumption that Disney is in the business of making movies is too simplistic. Instead, the company strives to entertain, inspire, and inform with unparalleled storytelling.

The stories the company has told (and continues to tell) resonate with viewers across generations and countless people can recall a childhood spent watching Disney movies. 

To promote its brands, the company relies on nostalgia marketing to remind customers of their youth and feelings like connection, safety, hope, and joy.

These feelings breed positive emotions that the consumer experiences when interacting with the Disney brand .

How does Disney profit from its stories and characters?

Disney profits from this mixture of emotions, feelings, and experiences in several diverse ways which are described below.

Media networks

Media networks incorporate cable networks such as ABC Family, Disney Channels, 20th Television Animation, and Disney Television Studios.

Also included here are various production operations, radio networks, and television distribution assets.

Revenue here is derived from advertising fees, affiliate fees, and both the sale and distribution of television programming.

Parks and resorts

Disney’s parks and resorts allow customers to experience its stories and characters firsthand.

The company operates hotels, resorts, water parks, cruise vacations, theme parks, and conference centers, among other recreational facilities.

Revenue is collected from the sale of cruise tickets, admission tickets, hotel rooms, branded experiences, and food.

Studio entertainment

Studio entertainment is perhaps the segment with which most customers are familiar.

It houses Walt Disney Studios – the epicenter of Disney movies, music, and theatre – which itself houses producers such as Walt Disney Animation Studios, Pixar Animation Studios, Searchlight Pictures, Marvel Studios, and Lucasfilm.

Disney makes money from the global distribution of its films to television markets, homes, and cinemas. It also profits from theatre ticket sales and event licensing fees.

Consumer products

This encapsulates merchandise sales from the Disney brand , Disney retail stores, international retailers, and its many theme parks and resorts.

Consumer products also include the licensing of stories and characters to third parties.

Interactive media

Interactive media covers online games and entertainment. As such, it incorporates game content licensing, branded online services, and multi- platform game distribution .

Revenue is earned via mobile and online game subscriptions, advertising, and sponsorships.

Distribution Strategy:

  • Disney owns and operates cable networks, including ABC Family, Disney Channels, and Disney Television Studios.
  • Revenue is derived from various sources, including advertising fees, affiliate fees, and the sale and distribution of television programming.
  • Disney’s media networks reach a broad audience, both through traditional cable and digital streaming services.
  • Disney operates a vast network of recreational facilities, including theme parks, resorts, water parks, cruise vacations, and conference centers.
  • Customers can experience Disney’s stories and characters firsthand at these locations.
  • Revenue streams include ticket sales for park admissions, accommodations in Disney-owned hotels and resorts, branded experiences, and food services.
  • Disney’s parks and resorts are strategically located around the world to cater to a global customer base.
  • This segment encompasses Walt Disney Studios, housing renowned producers such as Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, and Lucasfilm.
  • Disney generates revenue through the global distribution of its films to various markets, including television, homes (e.g., DVD and Blu-ray sales), and cinemas.
  • Additionally, Disney profits from theater ticket sales and licensing fees for events, merchandise, and theme park attractions associated with its films.
  • Disney’s consumer products division manages merchandise sales and licensing of its brands and characters.
  • Customers can purchase Disney-branded merchandise from Disney retail stores, international retailers, and theme park gift shops.
  • The company also licenses its stories and characters to third-party manufacturers, extending the reach of its brands into various product categories.
  • Disney’s interactive media division focuses on online games and entertainment.
  • The segment includes game content licensing, branded online services, and the distribution of games across multiple platforms.
  • Disney earns revenue through various channels, including mobile and online game subscriptions, advertising, and sponsorships.

Marketing Strategy:

  • Disney’s marketing strategy centers on nostalgia, aiming to evoke positive emotions in customers.
  • Nostalgia marketing is used to remind customers of their youth and evoke feelings of connection, safety, hope, and joy.
  • This emotional connection with Disney’s timeless characters and stories fosters a positive and enduring relationship with the brand .
  • Disney’s core marketing strategy is built on storytelling, leveraging the power of its iconic characters and narratives.
  • The company’s stories aim to entertain, inspire, and inform audiences across generations.
  • Disney’s marketing materials, including advertisements and promotional campaigns, emphasize the emotional and storytelling aspects of its content.
  • Disney’s marketing efforts target a wide demographic range, including both children and adults.
  • The company’s enduring stories and characters have a cross-generational appeal, ensuring that Disney remains relevant to multiple age groups.
  • Disney’s storytelling resonates with viewers of all ages, creating a lasting emotional bond.

Organizational Structure:

  • Disney’s organizational structure is organized into distinct business segments, each led by its own leadership team.
  • Business segments include Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive Media.
  • Each segment focuses on specific operations and strategies related to its respective area of business .
  • The company is led by a CEO who provides overall strategic direction and vision .
  • Each business segment has its dedicated president or leader responsible for day-to-day operations, growth strategies, and financial performance.
  • Creative talent, including filmmakers, animators, and storytellers, play a pivotal role in Disney’s content creation and storytelling efforts.
  • Marketing and brand management teams work diligently to maintain and promote Disney’s positive brand experience to consumers.
  • Skilled artisans and craftsmen contribute to the quality and craftsmanship of Disney’s consumer products, ensuring that they meet the brand ’s high standards.

Mission and Impact:

  • Disney’s mission is to entertain, inspire, and inform through the art of storytelling.
  • The company aims to create lasting memories and emotional connections through its stories and characters.
  • Disney’s enduring appeal and its ability to evoke positive emotions have a significant cultural impact.
  • Disney’s stories hold a special place in people’s hearts and have become an integral part of global culture.
  • The brand ’s influence extends to various forms of media, entertainment, and consumer products, shaping the way people experience storytelling and entertainment.

Key Takeaways:

  • Disney relies on nostalgia marketing to remind customers of their youth and feelings like connection, safety, hope, and joy. This combined with various emotional cues results in a positive experience for consumers when they interact with the Disney brand .
  • Disney makes money from positive brand experiences in a number of ways. The company’s brands are sold, licensed, or marketed across parks and resorts, consumer products, interactive media, studio entertainment, and media networks.

Key Highlights

  • Disney’s business model centers on creating enduring, scalable brands from its characters and stories.
  • Characters like Mickey Mouse and stories like Snow White have been developed since the early 20th century.
  • Disney’s storytelling aims to entertain, inspire, and inform, creating emotional connections with audiences.
  • Nostalgia marketing is used to evoke positive emotions and remind customers of their youth.
  • Media Networks: Includes cable networks, production operations, and TV distribution with revenue from fees and advertising.
  • Parks and Resorts: Offers immersive experiences with characters, generating revenue from admissions, accommodations, and branded offerings.
  • Studio Entertainment: Houses film studios like Pixar and Marvel, earning from film distribution , theater sales, and event licensing.
  • Consumer Products: Involves merchandise sales, Disney stores, theme parks, and character licensing.
  • Interactive Media: Encompasses online games, with revenue from subscriptions, advertising, and distribution .
  • Disney’s focus on storytelling and emotional ties results in a positive experience for consumers.
  • Consumer interactions with Disney evoke feelings of connection, safety, hope, and joy.
  • Disney’s ownership of intellectual property gives it control over its brand portfolio.
  • This control allows the company to maintain brand consistency and regulate usage.
  • Disney’s stories and characters resonate across generations, maintaining relevance over time.
  • The brand ’s appeal is both to children and adults, fostering a lifelong connection.
  • Disney doesn’t solely rely on movies but focuses on a multi-faceted approach to entertainment.
  • The company’s strategy spans media networks, parks, consumer products, studio entertainment, and interactive media.
  • Disney aims to entertain, inspire, and inform through storytelling.
  • The brand ’s stories hold a special place in people’s hearts, creating lasting memories.

Read Next: Netflix Business Model , Disney Organizational Structure , Disney Competitors .

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Walt Disney: Business Model, SWOT Analysis, and Competitors 2023

Inside This Article

In this blog article, we will delve into the fascinating world of Walt Disney, exploring its business model, conducting a SWOT analysis, and examining its competitors as we look ahead to the year 2023. Walt Disney, renowned for its timeless entertainment and magical experiences, has captivated audiences worldwide. By understanding its business model, we can gain insights into the company's success. Additionally, conducting a SWOT analysis will shed light on its strengths, weaknesses, opportunities, and threats. Lastly, exploring its competitors will provide a comprehensive view of the industry landscape in the near future.

What You Will Learn:

  • Who owns Walt Disney and the significance of their ownership structure.
  • The mission statement of Walt Disney and how it guides the company's operations and decision-making.
  • How Walt Disney makes money through its diversified revenue streams and strategic business model.
  • An in-depth explanation of Walt Disney's Business Model Canvas and how it helps the company thrive in the entertainment industry.
  • The key competitors of Walt Disney and their impact on the company's market position.
  • A comprehensive SWOT analysis of Walt Disney, highlighting its strengths, weaknesses, opportunities, and threats in the current market landscape.

Who owns Walt Disney?

The walt disney company: a brief overview.

The Walt Disney Company, often referred to as Disney, is one of the world's largest and most influential entertainment conglomerates. Founded in 1923 by Walt Disney and Roy O. Disney, the company has grown exponentially over the years, encompassing various sectors such as film production, theme parks, television networks, and merchandise.

The Founders and Their Legacy

Walt Disney, the creative genius behind Disney's animated characters, brought to life iconic creations like Mickey Mouse, Donald Duck, and Snow White. His brother, Roy O. Disney, played a crucial role in managing the business side of the company. Together, they established the foundation for what would become a global entertainment powerhouse.

A Publicly Traded Company

As of today, The Walt Disney Company is a publicly traded company, listed on the New York Stock Exchange under the ticker symbol "DIS." This means that ownership of Disney is distributed among numerous shareholders who hold shares of the company's stock.

Major Shareholders

While Disney has a vast number of individual and institutional shareholders, some major stakeholders hold significant portions of the company's stock. One such example is The Vanguard Group, an investment management firm, which holds a substantial stake in Disney. Other major shareholders include BlackRock, State Street Corporation, and Berkshire Hathaway, among others.

The Disney Family Trust

Although the Disney family does not hold a majority stake in the company, they still maintain a presence in Disney's ownership structure. The Disney Family Trust, established by Walt Disney's descendants, holds a notable number of shares, ensuring the family's ongoing association with the company and its legacy.

The Influence of Bob Iger

Bob Iger, the former CEO of The Walt Disney Company, played a pivotal role in shaping the company's recent success. During his tenure, Iger led several strategic acquisitions, including Pixar Animation Studios, Marvel Entertainment, and Lucasfilm (the company behind Star Wars). These acquisitions added immensely to Disney's intellectual property portfolio and expanded its global reach.

The Future of Disney's Ownership

As with any publicly traded company, ownership of Disney can fluctuate due to stock market activity and changes in shareholder positions. However, the enduring legacy of the Disney family, coupled with the company's strategic acquisitions and continued success, ensure that Walt Disney's vision and influence remain an integral part of the company's identity.

What is the mission statement of Walt Disney?

The mission statement of walt disney: creating happiness and magic for all.

Walt Disney, the legendary entertainment company, has a well-defined mission statement that has guided its operations and growth over the years. The mission statement of Walt Disney is to "create happiness and magic for all." This simple yet powerful statement encapsulates the primary goal and purpose of the company.

At its core, the mission statement reflects Walt Disney's commitment to delivering exceptional and enchanting experiences to people of all ages. The company aims to bring joy, inspiration, and entertainment to its audience through various forms of storytelling, including movies, theme parks, television shows, and merchandise.

By emphasizing the concept of happiness, Walt Disney's mission statement highlights its dedication to creating positive and uplifting experiences for individuals worldwide. The company focuses on delivering content and experiences that evoke emotions such as joy, wonder, and nostalgia, allowing people to escape from their everyday lives and immerse themselves in magical worlds.

Furthermore, the mission statement's inclusion of the term "magic" underscores Disney's commitment to enchantment and imagination. Walt Disney believes in the power of storytelling and the ability to transport people to extraordinary realms where dreams come true. Whether it's through beloved animated characters like Mickey Mouse or immersive theme park attractions, the company aims to create magical moments that leave a lasting impact on its audience.

Importantly, the mission statement's use of the phrase "for all" highlights Disney's commitment to inclusivity and accessibility. The company strives to make its content and experiences available to a wide range of people, irrespective of age, background, or location. Whether it's through its diverse cast of characters or its efforts to expand into international markets, Walt Disney aims to touch the lives of individuals from all walks of life.

In conclusion, Walt Disney's mission statement of "creating happiness and magic for all" serves as a guiding principle for the company's operations and aspirations. By focusing on delivering exceptional experiences, fostering imagination, and promoting inclusivity, Disney continues to fulfill its mission and bring joy to millions of people around the world.

How does Walt Disney make money?

Box office revenue.

One of the primary ways Walt Disney makes money is through box office revenue. Disney owns several film studios, including Walt Disney Pictures, Pixar Animation Studios, Marvel Studios, and Lucasfilm. These studios produce and distribute movies that generate billions of dollars at the box office worldwide. From beloved animated classics to blockbuster superhero films, Disney's movies consistently attract large audiences and generate substantial ticket sales.

Theme Parks and Resorts

Disney's theme parks and resorts are another major source of revenue. With iconic locations such as Disneyland in California, Walt Disney World in Florida, and Disneyland Paris, Disney's parks attract millions of visitors each year. Ticket sales, accommodation bookings, merchandise sales, and food and beverage sales all contribute to the revenue generated by the theme parks and resorts. Additionally, Disney operates Disney Cruise Line, providing another avenue for revenue through vacation packages and onboard spending.

Merchandise and Licensing

Disney characters and franchises are extremely popular and have a significant presence in the consumer goods market. Through merchandise sales, Disney earns substantial revenue from toys, clothing, accessories, and other products featuring its beloved characters. Additionally, Disney licenses its intellectual property to other companies, allowing them to produce and sell products based on Disney's characters and franchises. This includes everything from clothing lines to video games, generating significant licensing revenue for the company.

Media Networks

Disney's media networks, including ABC, ESPN, and various Disney-owned television channels, play a crucial role in the company's revenue stream. Advertising revenue, affiliate fees, and content licensing contribute to the financial success of Disney's media networks. These networks broadcast a wide range of content, including sports events, news programs, and popular television shows, attracting large audiences and generating substantial revenue through advertisements and partnerships.

Streaming Services

In recent years, Disney has launched its own streaming services, namely Disney+ and Hulu (in which Disney has a controlling stake). These platforms offer subscribers access to a vast library of Disney-owned content, including movies, TV shows, and original productions. The subscription fees from these streaming services contribute to Disney's revenue, with the increasing popularity and growth of streaming further enhancing the company's financial success.

Consumer Products and Interactive Media

Disney's consumer products and interactive media division focuses on digital content, video games, e-books, and interactive experiences. By creating and distributing digital content and engaging interactive experiences, Disney generates revenue from consumers who are increasingly embracing digital forms of entertainment. Additionally, the division oversees Disney's online platforms, apps, and websites, which serve as additional revenue streams through advertising and subscription services.

Overall, Walt Disney generates revenue through a diverse range of sources, leveraging its iconic brands, characters, and franchises to capture the attention and wallets of millions of consumers worldwide.

Walt Disney Business Model Canvas Explained

Introduction to the business model canvas.

The Business Model Canvas is a strategic management tool that allows organizations to define, analyze, and design their business models. Developed by Alexander Osterwalder and Yves Pigneur, this visual framework provides a holistic view of a company's key components, helping to identify strengths, weaknesses, and areas for improvement.

In this blog post, we will explore the Walt Disney Company's business model using the Business Model Canvas. By examining the different elements of Disney's business model, we can gain insights into how the company has achieved its success and sustained its position as a global entertainment powerhouse.

Key Partnerships

One of the key strengths of Disney's business model lies in its strategic partnerships. Disney has established strong partnerships with various entities that have contributed significantly to its success. These partnerships include collaborations with other entertainment companies, such as Pixar, Marvel Studios, and Lucasfilm, which have expanded Disney's portfolio of intellectual properties and enhanced its ability to create captivating content.

Moreover, Disney has formed partnerships with distribution networks, both traditional and digital, to ensure wide reach and accessibility for its content. This includes agreements with cable and satellite providers, streaming platforms like Netflix and Hulu, and even theme park operators worldwide. These partnerships enable Disney to distribute its content through multiple channels, maximizing its revenue streams and ensuring a strong market presence.

Key Activities

Disney's key activities revolve around content creation, theme park operations, and merchandising. Content creation lies at the heart of Disney's business model, as the company continuously develops and produces high-quality movies, TV shows, and other media content. Through its various subsidiaries and partnerships, Disney is able to leverage its intellectual properties and iconic characters to create captivating stories that resonate with audiences of all ages.

Disney's theme park operations are another critical aspect of its business model. The company owns and operates multiple theme parks globally, including Disneyland Resort in California, Walt Disney World Resort in Florida, and Disneyland Paris. These theme parks offer immersive experiences for visitors, combining entertainment, storytelling, and customer service excellence. The revenue generated from theme park admissions, merchandise sales, and food and beverage offerings contributes significantly to Disney's overall financial performance.

Merchandising is yet another important activity for Disney. The company has built a strong presence in the consumer products industry, capitalizing on its extensive portfolio of characters and franchises. Through licensing agreements and retail partnerships, Disney merchandise can be found in stores worldwide, allowing fans to bring a piece of the Disney magic into their homes. This diversification of revenue streams helps Disney mitigate risks and maintain a stable financial position.

Key Resources

Disney's key resources can be categorized into intellectual property, human capital, and physical assets. Intellectual property is at the core of Disney's business model, with its vast collection of iconic characters, stories, and franchises serving as valuable intangible assets. These intellectual properties not only drive content creation but also form the basis for merchandise, theme park attractions, and other revenue-generating activities.

Disney's human capital is another crucial resource. The company employs a diverse and talented workforce across various disciplines, including animation, film production, theme park operations, marketing, and more. The expertise and creativity of its employees contribute to the continued success of Disney's content creation and operational activities.

In terms of physical assets, Disney owns and operates theme parks, production studios, and distribution facilities worldwide. These physical assets provide the necessary infrastructure for Disney to deliver its products and services effectively. The theme parks, in particular, are iconic symbols of the Disney brand, attracting millions of visitors each year and generating significant revenue for the company.

By examining the Walt Disney Company's business model using the Business Model Canvas, we can appreciate the strategic partnerships, key activities, and essential resources that have contributed to Disney's success. Disney's ability to create compelling content, operate immersive theme parks, and leverage its intellectual properties has allowed the company to establish a strong brand presence and generate substantial revenue streams. The Business Model Canvas provides a comprehensive framework for understanding the intricacies of Disney's business model and serves as a valuable tool for analyzing and improving any organization's strategic approach.

Which companies are the competitors of Walt Disney?

Introduction.

Walt Disney, a global entertainment and media conglomerate, has established itself as a powerhouse in the industry. However, it is not without competitors. Several companies strive to challenge Disney's dominance in various segments of the entertainment market. Let's explore some of the key competitors of Walt Disney.

1. Comcast Corporation (NBCUniversal)

Comcast Corporation, one of the largest media and entertainment companies, poses a significant competition to Walt Disney. Through its subsidiary, NBCUniversal, Comcast operates a diverse range of businesses, including broadcast networks (NBC), cable channels (USA Network, Bravo, E!, and more), theme parks (Universal Parks & Resorts), and film production (Universal Pictures). With its extensive media portfolio and successful franchises such as "Jurassic Park" and "Fast & Furious," NBCUniversal competes directly with Disney in areas like film production, theme parks, and television networks.

2. WarnerMedia (AT&T)

WarnerMedia, a subsidiary of telecommunications giant AT&T, presents formidable competition to Walt Disney. With properties like Warner Bros. Entertainment, HBO, and Turner Broadcasting System, WarnerMedia boasts an impressive array of assets. Warner Bros. Entertainment, in particular, competes head-on with Disney in the film production industry, as it owns iconic franchises like "Harry Potter," "DC Comics," and "The Lord of the Rings." Additionally, HBO's popular shows and streaming platform, HBO Max, challenge Disney's dominance in the streaming space.

Netflix, the world's leading streaming service, has emerged as a significant competitor to Walt Disney, particularly in the realm of digital entertainment. With millions of subscribers across the globe, Netflix offers a vast library of original and licensed content, ranging from TV shows to movies. As Disney has entered the streaming market with Disney+, it directly competes with Netflix for subscribers and viewership. Both companies invest heavily in creating exclusive content and expanding their user bases, making this rivalry intense and ever-evolving.

4. ViacomCBS

ViacomCBS, a conglomerate resulting from the merger of Viacom and CBS Corporation, represents another rival of Walt Disney. With a diverse portfolio of television networks (MTV, Nickelodeon, Comedy Central, and more), film production (Paramount Pictures), and streaming services (Paramount+), ViacomCBS competes with Disney in various aspects of the entertainment industry. Paramount Pictures, in particular, vies with Disney's film production arm, releasing popular franchises like "Transformers" and "Mission: Impossible."

5. Sony Corporation

Sony Corporation, a Japanese multinational conglomerate, also competes with Walt Disney in specific entertainment sectors. Sony Pictures Entertainment, the film production and distribution arm of Sony, produces major blockbuster franchises such as "Spider-Man," "Jumanji," and "James Bond." While not as extensive as Disney's overall media empire, Sony's film division remains a formidable competitor in terms of box office success and attracting audiences worldwide.

Walt Disney faces fierce competition from several prominent companies across various segments of the entertainment industry. Comcast Corporation (NBCUniversal), WarnerMedia (AT&T), Netflix, ViacomCBS, and Sony Corporation are just a few of the key competitors that challenge Disney's dominance. As the entertainment landscape continues to evolve, the rivalry between these companies intensifies, leading to innovative content offerings and an exciting race for consumers' attention.

Walt Disney SWOT Analysis

  • Strong brand reputation: Walt Disney has built a strong brand image and reputation over the years. It is widely recognized and associated with quality entertainment and family-friendly content.
  • Diversified business portfolio: The company operates in various segments, including media networks, theme parks, studio entertainment, and consumer products. This diversification helps Walt Disney mitigate risks and capitalize on different revenue streams.
  • Iconic characters and franchises: Walt Disney owns a vast library of beloved characters and franchises, such as Mickey Mouse, Marvel, Star Wars, and Pixar. These properties have a large fan base and provide the company with a steady flow of revenue through merchandise sales, movies, and theme park attractions.
  • Strong distribution network: Walt Disney has an extensive distribution network that spans across multiple platforms, including movies, television, streaming services, and merchandise. This allows the company to reach a wide audience and maximize its market reach.
  • Innovation and technological advancements: Walt Disney has consistently embraced innovation and adopted new technologies to enhance its offerings. For example, the company has invested in virtual reality experiences and developed its streaming platform, Disney+. These initiatives help Walt Disney stay relevant in an ever-changing media landscape.
  • Dependence on specific franchises: While Walt Disney's iconic franchises are a strength, the company also faces the risk of overreliance on them. If a particular franchise underperforms, it could have a significant impact on the company's revenue and profitability.
  • High operating costs: Operating theme parks, producing movies, and maintaining a vast distribution network require substantial financial resources. This exposes Walt Disney to cost pressures and limits its flexibility in allocating funds to other areas of the business.
  • Vulnerability to economic downturns: The entertainment industry is sensitive to economic cycles, and Walt Disney is not immune to this. During economic downturns, consumers may cut back on discretionary spending, impacting theme park attendance and merchandise sales.

Opportunities

  • Expanding into emerging markets: Walt Disney has the opportunity to tap into growing markets, particularly in Asia, such as China and India. The rising middle class and increasing disposable income in these regions present opportunities for the company to expand its theme parks, movies, and consumer products.
  • Streaming services growth: The launch of Disney+ has opened up new possibilities for the company to compete in the streaming industry. As more consumers shift towards digital content consumption, Walt Disney can leverage its vast library of content to attract subscribers and generate additional revenue.
  • Cross-promotion and synergies: With its diverse portfolio, Walt Disney can capitalize on cross-promotion and synergies between its various segments. For example, successful movies can drive merchandise sales, and popular characters can be incorporated into theme park attractions, creating a seamless and immersive experience for consumers.
  • Increasing competition: The entertainment industry is highly competitive, with numerous players vying for consumers' attention. Streaming services, in particular, have become crowded, with competitors like Netflix, Amazon Prime Video, and Hulu. This intense competition could impact Walt Disney's market share and profitability.
  • Changing consumer preferences: Consumer preferences and trends are constantly evolving, and Walt Disney needs to adapt to these changes to remain relevant. Failure to keep up with shifting preferences could lead to a decline in audience engagement and reduced demand for its products and services.
  • Regulatory and legal challenges: As a large multinational corporation, Walt Disney is subject to various regulatory and legal challenges. These include copyright and intellectual property disputes, antitrust regulations, labor laws, and content censorship. Compliance with these regulations can be costly and time-consuming.

Key Takeaways

  • The Walt Disney Company is owned by shareholders, with the largest shareholders being institutional investors like Vanguard Group and BlackRock.
  • The mission statement of Walt Disney is to "entertain, inform, and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds, and innovative technologies that make ours the world's premier entertainment company."
  • Walt Disney makes money through various sources, including its theme parks and resorts, media networks (such as ABC and ESPN), studio entertainment (producing and distributing films), consumer products, and direct-to-consumer streaming services.
  • The Walt Disney Business Model Canvas encompasses key elements such as customer segments (families, children, and entertainment enthusiasts), value proposition (high-quality entertainment experiences and merchandise), channels (theme parks, TV networks, and online platforms), customer relationships (loyalty programs and personalized experiences), and revenue streams (ticket sales, advertising, licensing, and subscriptions).
  • Some of the main competitors of Walt Disney include Comcast Corporation (NBCUniversal), WarnerMedia (owned by AT&T), and ViacomCBS Inc., as well as streaming services like Netflix and Amazon Prime Video.
  • In terms of a SWOT analysis, Walt Disney's strengths include its strong brand recognition, diversified business portfolio, and extensive intellectual property. However, it faces weaknesses such as dependence on specific franchises and potential risks related to piracy and content distribution. Opportunities for the company include expanding into emerging markets and the growing demand for streaming services, while threats include competition, changing consumer preferences, and economic downturns.

In conclusion, Walt Disney is a conglomerate entertainment company that has become a household name. While it was founded by Walt Disney and Roy O. Disney, it is now owned by shareholders who hold its publicly traded stock. The mission statement of Walt Disney is to entertain, inform, and inspire people around the globe through the power of storytelling and imagination.

Walt Disney's primary revenue streams come from various sources, including its theme parks and resorts, media networks, studio entertainment, and consumer products. The company's ability to diversify its operations has allowed it to maintain a strong financial position and continue expanding its reach.

By utilizing the Business Model Canvas, we can understand the key elements that contribute to Walt Disney's success. These include its value proposition of providing high-quality entertainment experiences, its key activities of creating and distributing content, its customer segments that range from families to individuals of all ages, and its strong relationships with partners and suppliers.

However, Walt Disney does face competition in the entertainment industry. Some of its notable competitors include Universal Studios, Warner Bros., and Comcast NBCUniversal. These companies also strive to capture the attention and loyalty of consumers, leading to a constant battle for market share and innovative offerings.

To assess the company's strengths and weaknesses, we conducted a SWOT analysis. Walt Disney's strengths lie in its strong brand recognition, extensive intellectual property portfolio, and global presence. However, it also faces weaknesses such as high operating costs and dependence on certain franchises. Opportunities for growth include expanding into new markets and leveraging technological advancements, while threats include changing consumer preferences and increasing competition.

Overall, Walt Disney's success can be attributed to its ability to create magical experiences and connect with audiences worldwide. By staying true to its mission and continuously adapting to evolving consumer demands, it remains a dominant force in the entertainment industry.

What is the SWOT analysis of Disney?

  • Strong brand recognition and reputation: Disney is one of the most recognizable and beloved brands globally.
  • Diversified business portfolio: Disney operates in various segments, including media networks, theme parks, film production, and merchandise, allowing for revenue stability.
  • Extensive intellectual property: The company owns a vast library of iconic characters, stories, and franchises, such as Mickey Mouse, Marvel, Star Wars, and Pixar, providing a competitive advantage.
  • Global presence: Disney has a strong international presence with theme parks, resorts, and media networks in multiple countries, allowing for global reach and revenue generation.
  • Innovation and technology: The company has embraced technological advancements, such as interactive experiences, digital streaming platforms, and virtual reality, to enhance customer engagement and satisfaction.

Weaknesses:

  • Dependence on specific markets: Disney's theme parks and resorts heavily rely on tourism, making it vulnerable to economic downturns, natural disasters, and geopolitical tensions.
  • High operational costs: Maintaining and expanding theme parks and resorts requires significant investments and ongoing expenses, impacting profitability.
  • Reliance on third-party distribution: Disney relies on third-party distributors for its media content, which might limit its control over pricing and distribution strategies.
  • Limited control over content consumption: The shift towards digital streaming platforms challenges Disney's traditional distribution channels, potentially impacting revenue streams.

Opportunities:

  • Expansion in emerging markets: Disney can further expand its presence in emerging markets, such as China and India, by opening theme parks, launching localized content, and partnerships.
  • Growth in digital streaming: The increasing popularity of streaming services presents an opportunity for Disney's Disney+ platform to capture a larger market share and compete with established players like Netflix.
  • Synergy among franchises: Cross-promotion and integration among Disney's various franchises can drive increased consumer engagement and revenue, as seen with the Marvel Cinematic Universe.
  • Expansion into new business segments: Disney can explore new industries, such as virtual reality, esports, or augmented reality, to diversify its revenue streams.
  • Intense competition: Disney faces competition from major media conglomerates, streaming platforms, and theme park operators, which may impact market share and profitability.
  • Changing consumer preferences: Evolving consumer preferences, such as a shift towards digital content consumption or experiences beyond traditional theme parks, may pose a threat to Disney's existing business models.
  • Piracy and illegal distribution: The unauthorized distribution of Disney's content through piracy or illegal streaming platforms can result in revenue loss and impact the company's intellectual property.
  • Economic downturns and travel restrictions: Economic recessions, political instability, or travel restrictions, as seen during the COVID-19 pandemic, can significantly impact Disney's theme park attendance and revenue.

What are the weaknesses of Disney in SWOT analysis?

Some potential weaknesses of Disney in a SWOT analysis include:

Dependence on franchises and intellectual property: Disney relies heavily on its successful franchises like Marvel, Star Wars, and Pixar. If these franchises fail to resonate with audiences or face declining popularity, it could adversely affect Disney's financial performance.

High operating costs: Disney operates numerous theme parks, resorts, and entertainment properties worldwide, which require significant investments and ongoing operational expenses. This high cost structure can pose a challenge, especially during periods of economic downturn or reduced consumer spending.

Vulnerability to external factors: Disney's business is susceptible to various external factors such as natural disasters, political instability, disease outbreaks, and changes in government regulations. These factors can disrupt operations, impact revenue, and lead to reputational damage.

Limited international footprint in some markets: Although Disney has a strong global presence, it may face limitations in certain markets where cultural differences, language barriers, or local competition pose challenges. Expanding into new international markets can be expensive and subject to regulatory hurdles.

Decline in traditional media consumption: With the rise of digital streaming platforms and changing consumer preferences, traditional media channels like cable television have experienced declining viewership. As a result, Disney's cable networks, such as ESPN, may face challenges in retaining subscribers and generating advertising revenue.

Employee relations and labor costs: Disney has faced criticism and legal controversies related to labor practices, particularly concerning low wages and poor working conditions for some of its employees. These issues can impact the company's reputation and employee morale.

It is important to note that weaknesses can vary over time, and Disney's management continuously works to address and mitigate these challenges.

What are the strengths and weaknesses of the Walt Disney Company?

Strong brand image and recognition: The Walt Disney Company is one of the most recognizable and beloved brands in the world. Its characters, parks, and movies have a large and loyal fan base.

Diversified business portfolio: Disney operates in various sectors including movies, theme parks, television, and merchandise. This diversification helps the company mitigate risks and generate revenue from multiple sources.

Innovative storytelling and creativity: Disney has a long history of creating compelling and innovative stories that resonate with audiences of all ages. This creativity has allowed the company to produce successful movies and TV shows.

Global reach and market presence: Disney has a strong global presence and operates in many countries. It has successfully expanded its brand and operations internationally, including opening theme parks in different parts of the world.

Strong financial performance: The company has consistently delivered strong financial results, driven by its diverse revenue streams and successful franchises.

Dependence on specific franchises: While Disney has a diversified business portfolio, it heavily relies on a few specific franchises for its success. This creates a risk if any of these franchises face decline or fail to resonate with audiences.

High production and marketing costs: Producing high-quality movies and running theme parks require significant investments. Disney's success relies on its ability to continue investing in these areas, which can be challenging.

Vulnerability to economic downturns: The entertainment industry is sensitive to economic cycles, and Disney is not immune to economic downturns. Consumer spending on movies, theme parks, and merchandise may decline during tough economic times.

Limited control over external factors: Disney's success can be influenced by factors beyond its control, such as changes in government regulations, piracy, and disruptions in the supply chain.

Criticism and controversies: As a large and influential company, Disney has faced criticism and controversies, including allegations of cultural appropriation and lack of diversity in its storytelling. These issues can negatively impact the company's reputation and brand image.

What are some of the strengths of Walt Disney?

Some of the strengths of Walt Disney include:

Creativity: Walt Disney was known for his unparalleled creativity and imagination. He was able to create captivating stories, memorable characters, and innovative theme park experiences that continue to resonate with audiences today.

Visionary Leadership: Disney had a clear vision for his company and was able to inspire and lead his team to achieve his goals. He was not afraid to take risks and push boundaries, which resulted in groundbreaking achievements and successes.

Strong Branding: Disney has built an iconic brand that is recognized and loved globally. The Disney brand represents family-friendly entertainment, magical experiences, and a commitment to storytelling.

Innovation: Disney was an innovator in the entertainment industry, constantly pushing the boundaries of technology and storytelling. From the creation of the first synchronized sound and full-color cartoons to the development of advanced animatronics and immersive theme park experiences, Disney's focus on innovation has set the company apart.

Strong Intellectual Property: Disney has a vast library of intellectual property, including beloved characters like Mickey Mouse, Cinderella, and Buzz Lightyear. These characters and stories have become timeless and continue to generate revenue through various mediums such as movies, merchandise, and theme park attractions.

Strong Financial Performance: Disney has consistently performed well financially, with a strong track record of revenue growth and profitability. The company's diverse revenue streams, including film, television, theme parks, and merchandise, contribute to its financial stability.

Customer Loyalty: Disney has a loyal fan base that spans generations. The company has built a strong emotional connection with its audience through its storytelling and immersive experiences, resulting in repeat visits and a dedicated following.

Global Reach: Disney has a global presence, with theme parks, entertainment channels, and merchandise available in multiple countries. This global reach allows the company to tap into various markets and expand its audience base.

Strong Talent Pool: Disney has attracted and nurtured a talented pool of artists, animators, and storytellers over the years. The company's commitment to fostering creativity and innovation has resulted in a team of skilled professionals who bring Disney's vision to life.

Commitment to Corporate Social Responsibility: Disney has a strong commitment to corporate social responsibility, with initiatives focused on environmental sustainability, diverse and inclusive storytelling, and community engagement. This commitment contributes to Disney's positive reputation and enhances its brand image.

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Business Chronicler

Disney Business Model Explained: How Does The Dream Factory Really Work? 

Bottom line up front , financial performance and background , the building blocks , walt disney, roy disney jr. and the save disney campaign , other shareholders and key players today , employee training , theme parks, content creation , market segmentation , storytelling, brand identity, and nostalgia , revenue streams, linear networks, parks, experiences, and products , direct to customer , content sales and licensing , main assets and resources , 21st century fox: disney’s white elephant , expansion into france and a lesson in cross culture management .

  • Consistently Growing Expenses - Can Disney Keep It In Check? 

Disney Has Competition 

Conclusion , question: how does disney make money , question: is disney successful , question: how does disney market to such a wide audience , question: is disney profitable .

Disney has established itself as an entertainment giant with a massive customer base. In fact, analysts and experts call it the dream factory, which isn’t far from the truth. The company was started successfully by Walt Disney and has managed to build on the business practices he established to turn Disney into a key player in today’s global entertainment industry. 

Today, Disney is in the business of building brands instead of just creating content for viewership, and it then capitalizes on these brands by building experiences around them. Disney theme parks and cruises, Disney merchandise, and Disney franchises are all cogs in a huge machine that is fascinating to study. 

Of course, all has not been great for the organization either – Disney expanded aggressively in the 2000s, and it has gotten to the point where anything more will leave it vulnerable to anti-trust lawsuits. 

While Disney is known mainly for its cartoons like Mickey Mouse and Goofy, and movies like Cinderella and Snow White, there’s more to the company than that. The Disney business model is diversified with involvement in the tourism sector, entertainment, network broadcasting, and much more.

Having a diversified portfolio also means that Disney has multiple revenue streams, but operating the organization hasn’t been without its own challenges for company executives. Disney’s rapid growth hasn’t been all good for them. Between ever-increasing operating expenses, some less-than-ideal acquisitions like Fox, and failed venture into the international market, there are a lot of issues that the company’s current business model faces. 

All in all, I believe that even though the company has been very successful, and despite Disney’s status as a household name and the impact it has had on American and global culture, its business model might not be the most profitable for too long.

All of Disney’s theme parks and operations took a huge hit during the Pandemic, and the company was thrown off balance enough to warrant its former CEO – who had just retired months before the global crisis began — Bob Iger to come back to help lead the company through this rocky time. 

The company has since recovered quickly, owing to things like the launch of Disney+, Disney’s own streaming service, and Disney’s parks being back in business. In the second fiscal quarter of 2022 , Disney’s earnings have grown 23% compared to last quarter, and its six-month earnings have grown 29%. 

  • Key Players: A lot of people have a hand in turning the company into what it is today. Walt Disney himself, Bob Iger, Bob Chapek, and many other stakeholders have shaped the company’s structure and its creative direction over the years. 
  • Expenses: Disney’s main expenses are the operation and maintenance of its theme parks and cruise line, its employees’ salaries, and movie and content production. Disney is known to spend hundreds of millions of dollars on some of its content, and on training its employees. The operation of its theme parks and cruise line isn’t cheap either, and eats up a big chunk of its total revenue. 
  • Customer Base: Disney caters to a vast audience. With time, it has managed to make something for everyone. From young people who love to watch its Marvel and Star Wars franchises to children who are Pixar fans, Disney has viewers and customers in multiple demographics. 
  • Revenue Streams: The company’s earnings are fairly diversified. Disney earns money through the streaming and distribution of its movies and content to cinemas, TV channels, and online streaming platforms. It also earns a lot of money from its theme parks, cruises, and resorts. The rest of Disney’s money comes from licensing and advertising deals it makes with other companies and vendors so they can use Disney’s brands and characters on their own products. 
  • Main Assets and Resources: Disney has two main assets – the intellectual property it owns, and its theme parks and resorts. 

Key Players and Influences 

Walt Disney’s creative vision and organizational practices are what shaped Disney. Even long after his death, the Disney family continued to build on his legacy and the company as a whole was very keen on staying on the same track Walt Disney and Rob Disney had envisioned for it. 

Disney was the one to set the principles of talent management, and the Disney family still owns a little less than 3% of the company today . 

Robert Iger – or Bob Iger, is known as Hollywood’s politest CEO. He is also the person responsible for growing Disney as much as it did, with Disney’s acquisitions of the Marvel franchise, Lucasfilms, Fox Studios, and many more happening under his leadership. 

When Roy E. Disney didn’t like Michael Eisner and asked for his retirement – this is what led to the recruitment of Bob Iger as CEO at Disney. He stayed there until early 2020 when he was replaced by Bob Chapek. 

The campaign started with conflicts between Roy Disney and then Disney CEO Michael D. Eisner. Eventually, Roy Disney demanded that Michael D. Eisner resign from the position in a scathing letter addressed to him and the members of Disney’s board of directors. 

“In conclusion, Michael, it is my sincere belief that it is you who should be leaving and not me. Accordingly, I once again call for your resignation or retirement. The Walt Disney Company deserves fresh, energetic leadership at this challenging time in its history just as it did in 1984 when I headed a restructuring which resulted in your recruitment to the Company.” 

Roy Disney started a formal campaign to have Eisner resign, with speeches made to stakeholders outlining his dissatisfaction with the way Disney was being run. He felt like the company was moving away from its vision of providing long-term value and producing content that mattered – going instead for the quick buck in the short term. Roy Disney wanted to save Disney’s spirit and what it stood for, which is why he called for a change in leadership. 

With Bob Iger at the helm – who replaced Michael Eisner as a result of this campaign – Disney was able to achieve this goal. A prime example of this success would be the reacquisition of the rights to Oswald the Lucky Rabbit (Disney’s first star) from NBC. 

Today, only under 3% of Disney is owned by the Disney family. The biggest individual shareholders of the company are Bob Iger who owns 0.06% of the company, Christine M. McCarthy, and Alan N. Braverman who both have 0.01% of Disney each. Apart from these figures, there’s the current CEO Bob Chapek, and creative leaders like John Lasseter. 

A significant chunk of The Walt Disney Co. is also owned by institutional investors, namely Blackrock Inc. which owns 6.3% of the company, Vanguard Group which owns 7.6%, and State Street Corp. which owns 4.1% of the company. There are also other small institutional investors, and they collectively hold over 63% to 65% of the company. 

Disney’s expenses have always been a concern for the company, with factors like the amount it invests in employees, and the operating expenses for its theme parks coming into play. In its latest quarterly report , Disney made some important announcements and disclosed that both its revenue and profit were up, but out of the $21 billion revenue the company earned, only $3.6 billion could be counted as profits. 

In comparison , other large companies like Apple take over 38% of their revenue as profit. In 2020, Apple’s revenue was $275 billion, out of which $105 billion was profits. On the other hand, Walmart put most of its $559 billion revenue towards operating expenses – only making $22 billion in profits versus its $559 billion revenue. 

Disney spends most of its money on its theme parks and content creation – it also has thousands of employees on its payroll. 

While Disney spends a lot on employee training and education – it has a $25 million budget for employee education and back-to-school programs – and training, there are also reports of Disney not being the happiest place to work at . While Disney keeps spending money on training and educating its employees, it also keeps losing talent to its competition. 

Disney also spends a lot on its theme parks. In recent years, it has spent more on the parks than it has on the acquisition of media giants like Lucasfilms, Marvel, and Pixar combined. This would have been a good thing, only, people aren’t as keen about Disney theme parks anymore. What was once sold as the American Dream and the happiest place to be is quickly losing its charm among gripes about the parks being too expensive coming from its customers, and issues with inflation faced by the company. 

Disney spends Billions of dollars on giant movie projects and hundreds of millions of dollars on the average ones. This expenditure is justified by the fact that the movies usually still make back what Disney invested in them as well as turn huge profits, but the expenses remain. 

While movies like Frozen are mega hits and cross the billion dollar mark in profits, others are less successful, like Treasure Planet and The Country Bears. 

Customer Base and Disney’s Marketing Strategy 

Disney is a brand that enjoys instant recognition almost all over the world, but that doesn’t stop it from staying ahead with smart marketing. Here are some ways Disney stays ahead of the competition and makes the most out of the content it produces: 

Marketing mantras like having a target audience and knowing your niche are all well and good, but things can get confusing when you look at Disney and think about what a wide customer base they have. Disney fans are adults, teenagers, and children across a wide range of demographics, so how come it can successfully market to all of them at the same time? 

The answer is pretty simple – while Disney does market to a wide range of demographics in its advertising, its individual ads and campaigns are all targeted toward a particular audience. For whatever aspect of its products it’s hoping to advertise, it picks a target audience and focuses on that. 

It won’t make a single generic ad and hope it resonates with both its adult audience and the kids. Take Disney Princess ads for example, and the ads for its animated content that’s meant for children. Disney will choose marketing channels that children (and their guardians) are more likely to come across, while it would use other forms of advertising for Marvel content that is meant for young adults. 

This practice of splitting up its audience and then using separate ad campaigns to appeal to each demographic is called Market Segmentation, and Disney is a pro at it. 

Along with Disney’s success at market segmentation, Disney has the power of storytelling, a strong brand identity, and nostalgia on its side. 

  • Storytelling: Disney’s movies and content usually use traditional storytelling methods and give them a modern twist to appeal to the modern masses. These stories and content move the consumer, as we can see with the meaningful messaging in Pixar movies, for example. Disney has managed to inspire its fans and its audience, which makes its content successful with the masses. 
  • Brand Identity: Disney enjoys a strong brand identity and a name that is recognizable almost all over the globe. When Disney comes up with new content, customers and fans expect the same kind of quality from it that they’re used to, and the likelihood that they will invest in it simply because it came from Disney is not low. This isn’t just a coincidence or a result of the company being around for a long time – it is actually deliberate and hard-earned on Disney’s part. Disney places a lot of focus on making sure its messaging displays a uniform brand. The parks take brand consistency so seriously that if you got an autograph from Princess Jasmine in Disneyland Paris and then another one from Hong Kong, they would both look the same! 
  • Nostalgia: Not all of Disney’s success comes from robust marketing – some of it is indeed a result of the fact that Disney owns a lot of American cultural icons, and that a whole generation of Americans grew up watching content from the company. Disney consistently uses this to its advantage in its content and advertising. 

Disney has multiple revenue streams, but here are the main ones: 

  • Linear networks 

Of all of these streams, the biggest money maker for Disney is the Linear Networks segment of the business, making over 35% of its revenue in the first quarter of 2022. This amounts to a total of $7.7B. 

This includes the ownership and operation of all of Disney’s national and international cable channels like ESPN, Disney, ABC, and National Geographic. 

Disney owns and operates parks all over the world, from multiple states in the US to cities like Hong Kong and Shanghai. The company also has a cruise line and vacation club, all of which are hugely popular with Disney’s audience. 

The company made $7.2B out of these parks in the first quarter of 2022, which amounts to 33% of Disney’s first quarter revenue and is a dramatic increase from what the parks made in the last two years. This, of course, is owed to the fact that the parks have just reopened after an extended closure since 2020 due to the coronavirus pandemic. 

The direct-to-customer segment of Disney’s revenue comes from the streaming services the company owns, including Disney+, Hotstar, Hulu, ESPN+, and Star+. 

Disney earned about $4.7B from these streaming service subscriptions, which amounts to 21% of the total revenue. 

Sometimes, Disney will sell its content to third parties to put on their own platforms, and sell licenses to its brands and content. This part of Disney’s business is responsible for making it about 11% of the total revenue, which counts up to be around $2.4B for the first quarter of 2022.

Disney owns an impressive portfolio of both tangible and intellectual property. From acquisitions like Marvel and Pixar under its name to broadcasting networks like ABC and National Geographic, here is everything under Disney’s belt: 

  • California Adventure
  • Magic Kingdom
  • Disney’s Hollywood Studios
  • Disney’s Animal Kingdom
  • Disneyland Paris
  • Walt Disney Studios Park
  • Hong Kong Disneyland
  • Shanghai Disneyland
  • Tokyo Disneyland
  • Tokyo Disney Sea 

These resorts are as follows: 

  • Disneyland Resort
  • Walt Disney World
  • Disneyland Paris Resort
  • Tokyo Disney Resort
  • Shanghai Disney Resort
  • Hong Kong Disney Resort

Disney also has resorts and a cruise line that don’t include parks: 

  • Disney’s Vero Beach Resort
  • Disney’s Hilton Head Island Resort
  • Disney’s Aulani Resort in Hawaii
  • Adventures By Disney 
  • Disney Cruise Line 
  • Media and Studios: Disney’s media and studios are where most of Disney’s content is made, which includes establishments primarily in North America.  
  • Consumer Products and Interactive Media: Not only does Disney have multiple video games based on its characters and stories, but it also has merchandise, products, and even Disney-themed food at its parks. All of these products come under the consumer products and interactive media division of Disney’s properties. 
  • Media and Cable Networks: Disney owns TV channels, news channels, and much more on the local and international market. Some examples include National Geographic, ABC, Disney Channel, and ESPN. 
  • Subsidiaries: Disney now owns major production houses like Lucasfilms, Pixar, Marvel Studios, and Disney Theatrical Productions. All of these acquisitions were major game changers in the world of entertainment, and have made Disney the entertainment giant it is today.

Is Disney Really That Successful? 

While Walt Disney Co. is the biggest entertainment company in the world today, it might soon become a lesson in how not all growth is good. Things like its acquisition of Fox after a bidding war with Comcast, and its failed efforts at expanding into international markets, there’s a lot that looms as a threat over Disney’s otherwise successful empire. 

21st Century Fox was acquired by Disney after a long bidding war with Comcast over its assets, and after getting regulatory approval for the deal from the Department of Justice. Disney had grown so much in size that if it acquired Fox’s news channel (Fox news) along with the broadcasting channels it already owns, it would have opened itself up to antitrust lawsuits and other regulatory complications. 

In the end, the deal was complicated, with some of Fox’s assets staying with the original owners, who would keep operating them under a different company name. What Disney did acquire, however, it intends to use in a lot of its future cinematic releases. 

The thing is though, that this extended bidding war with Comcast and then Fox’s own assets have only driven Disney’s profits down. The reason Fox was up for sale was that the owners didn’t wish to adapt the company to compete in the era of digital and online streaming. While the acquisition drove Disney’s 4th quarter profits down by about 45% when Disney first got it, Disney feels optimistic about the deal. 

“As I said a few times, we analyze the 21st Century Fox opportunity entirely through the lens of our future business,” CEO Bob Iger is recorded to have said . But no one can ignore how Disney shares tanked for a bit after the acquisition, mainly because of the huge costs it incurred on the acquisition and integration of its new Fox assets into Disney as a whole. 

As of today, Disney has made good use of the assets it got from Fox by putting the content it acquired on Disney+ and Hulu, as well as using the characters from the X men universe in its Marvel releases. But was the value Fox offered to Disney worth the price? Some might argue in the negative. 

When Disney first said it wanted to make a Disneyland in Europe, it had some ideas about Paris that translated into trouble. While some employees walked away because the training sessions for jobs felt like brainwashing, Disney realized that its assumption that visitors would stay at their hotels and resorts for 4-5 days at a time was wrong. Not only did European employees not appreciate the way Disneyland was run, but the customers were unhappy too. 

Disney’s policy of not serving alcohol came as a surprise to a culture where wine with lunch was the norm, and Disney was woefully unprepared for the Europeans who wanted to get American-style breakfasts. 

EuroDisney – which was later named Disneyland Paris – wasn’t a huge success at first, giving the company over $2 billion in losses by the end of 1994. Performance did eventually pick up, and while Disneyland Paris is a desirable and successful entertainment destination for many today, it was not easy for the American company to adapt to the tastes and habits of its new, European customer base. 

Consistently Growing Expenses – Can Disney Keep It In Check? 

Operating Disney even on a day-to-day basis isn’t easy, and it sure isn’t cheap. Disney’s profit margins are one of the lowest among most successful companies, and the only reason it’s successful is because of the sheer size of the company, even if that is also the biggest issue right now. 

Out of the $21 billion the company earned, only $3.6 billion was profits while the other went towards operating expenses. This profit isn’t the best when you put it against the revenue, and it might be an issue in the future if the trend of decreasing profit margins in the company continues. 

Expensive deals and acquisitions like Fox, Marvel, Lucasfilms, and Pixar aside, Disney invests a lot of time and energy into maintaining a stellar employer image. It has a $25 million annual budget for employee education, and it constantly trains and invests in its creative talent. 

While Disney is a widely successful company and the world’s biggest entertainment company, it is not immune to market competition and other threats. The whole reason Bob Iger acquired so many new subsidiaries for the company was to make sure that Disney stayed ahead of the competition by being able to offer shows and movies on its platforms that the public loves and enjoys. 

Still, the entertainment market is highly saturated, and here are some companies that Disney often finds itself contending with for a share in the market: 

  • Netflix : Not only did Netflix give other entertainment companies including Disney a run for their money, but it also changed the entertainment landscape forever by introducing its streaming platform and app. Now, it also intends to steal some of Disney’s share in the animation sector . 
  • Comcast: Comcast is diversified and has its fingers in a lot of the same pies as Disney does. Universal Television, CNBC, DreamWorks, and Telemundo are all owned and operated by this company, and it was also in a bidding war against Disney for 21st Century Fox. 
  • Sony: Sony is a great producer in the films and movie sector, with Spiderman being one of its most notable properties. 
  • Amazon Prime Video: Amazon Prime Video often gives Disney competition when it comes to online streaming. 
  • Universal Studios: Universal Studios is a park that might not have as much to offer as Disneyland does, but it has been a huge success and the main attraction for tourists when they don’t want to go to Disneyland. The park itself is owned by Comcast, and its success is largely owed to the popularity of the Harry Potter series. 

Disney manages to stay ahead of this competition with the help of its solid brand and marketing, as well as with the help of acquisitions like Hulu and Marvel. These acquisitions help the company retain its market share even among the vicious competition. 

Disney makes most of its money through two main sources – its content, and its theme parks and themed experiences. While the company faces severe competition from within the industry, it has managed to stay ahead because of constant innovation and growth. 

FAQs about the Disney Business Model

Answer: Disney makes money through its content and the brands it creates. When one of Disney’s brands gets significantly popular, they use it to enter into licensing deals, to generate ad revenue, as an attraction in their theme parks, and through official merch and related products. 

Answer: Walt Disney Co. is the biggest entertainment company in the world, with a profit of $3.6 billion last year, and a revenue of $21 billion. It is also a very well-known brand with a robust brand identity and customer base and has been a successful company so far. 

Answer: The company practices something called market segmentation, through which it manages to split its marketing successfully across multiple demographics. While its marketing strategy as a whole is almost all-encompassing, its individual ads and campaigns are targeted toward one demographic or customer base or the other. 

Answer: Disney makes billions of dollars in profit annually, having made $3.6 billion in 2021.

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Disney, Staggered by Pandemic, Sees a Streaming Boom

The company lost $4.7 billion in the latest quarter, but also reported that Disney+ has about 60.5 million subscribers after nine months of operation.

disney business model 2020

By Brooks Barnes

The Walt Disney Company reported doomsday financial results on Tuesday as a result of the coronavirus pandemic and a television-related write-down, with net quarterly losses totaling $4.72 billion.

But Disney’s newest and, as far as many investors are concerned, most important business — streaming — experienced blockbuster growth as people quarantined at home. Disney said it had more than 100 million subscribers worldwide across its Disney+ , Hulu and ESPN+ streaming services. Powered by the release of “Hamilton,” Disney+ has about 60.5 million by itself, hitting the low end of its initial five-year goal after only nine months in operation.

To further strengthen its streaming business, Disney said that it would bypass theaters in the United States, Canada and part of Europe and make “Mulan” — a $200 million film — available to Disney+ subscribers on a premium basis. Indefinite access will cost $30 on top of Disney+ membership and start on Sept. 4.

“Mulan” had been scheduled for release in theaters worldwide in March. Disney said it would still release the live-action movie in countries where theaters are open but Disney+ is not available. That includes China, where the film’s story takes place.

“The tremendous success of Disney+ in less than a year clearly establishes us as a major force in global direct-to-consumer space,” Bob Chapek , Disney’s chief executive, told analysts on a conference call. “We are looking at ‘Mulan’ as a one-off as opposed to a new windowing model.” Mr. Chapek added, however, that Disney was “excited” to discover how a major film might perform in online release.

Robert A. Iger, Disney’s executive chairman and former chief executive, did not participate in the call, his first such absence since naming Mr. Chapek chief in February.

Disney also announced that it would introduce a new general entertainment subscription streaming service overseas. It will be called Star, arrive next year and offer programming from Disney properties like ABC, FX, Freeform, Searchlight and 20th Century Studios, which Disney bought from Rupert Murdoch last year.

As such, Disney will not pursue an international rollout of Hulu, which is available only in the United States.

Revenue in the quarter that ended on June 27, the third in Disney’s fiscal year, added up to $11.78 billion, falling from $20.26 billion a year ago. In the most-recent quarter, Disney furloughed an estimated 100,000 employees, cut executive pay by up to 50 percent and took out a $5 billion line of credit to bolster its liquidity, on top of $8.25 billion secured in March. The company also suspended its summer dividend and slashed $700 million in expansion spending at its domestic theme parks.

Per-share losses totaled $2.61 — a stark departure from the spectacular growth the company delivered from 2006, when it bought Pixar, to last year, when it swallowed the majority of Mr. Murdoch’s entertainment empire. In the same period last year, Disney had a profit of 79 cents per share.

Excluding one-time items, Disney squeaked out per share profit for the most recent quarter of eight cents, better than analysts were expecting. The items included nearly $5 billion of write-downs, in large part related to Disney’s traditional international television business. Disney has closed down more than 20 overseas cable channels so far this year.

Increasingly cost-conscious consumers are canceling their cable and satellite service in larger numbers, resulting in lower subscriber fees and advertising sales for companies like Disney, which owns the FX, Freeform, National Geographic, Disney Channel and Disney Junior cable networks. It is not just overseas: Richard Greenfield, a founder of the LightShed partners research firm, estimates that Americans will be cutting the cord at an 8 percent rate by the end of the year, compared with a 6 percent rate in the spring.

Despite the impact of the pandemic, Disney’s share price has been remarkably buoyant, with investors overlooking near-term losses and focusing on comeback efforts — most notably the return of some sporting events and the reopening of a retrofitted Walt Disney World to a limited number of visitors. The early success of Disney’s streaming division has also helped Disney shares, which climbed 5 percent in after-hours trading on Tuesday, to about $123.

Hulu has been on a roll because of new programming, including the FX-supplied series “Mrs. America,” which received eight Emmy nominations. Disney+ created a cultural thunderclap in early July, when it released a live capture of the original “Hamilton” stage production.

But building streaming services is tremendously expensive. Losses at Disney’s streaming division grew to $706 million from $562 million in the quarter.

Disney Media Networks, a division that includes ESPN, was helped by the pandemic, at least from a fiscal standpoint. It had operating profit of about $3.2 billion, a 48 percent increase, because ESPN was able to defer substantial rights payments to the N.B.A. and Major League Baseball. Disney’s movie studio held its own; operating profit fell 16 percent, to $668 million, in part because theaters were closed and the company did not have to spend hundreds of millions of dollars to advertise the arrival of new films.

But it was a brutal period for Disney’s theme park division, where operating profit plunged $3.7 billion, resulting in a loss of about $2 billion. Christine M. McCarthy, Disney’s chief financial officer, told analysts that Shanghai Disneyland, which reopened in early May, had started to bounce back. But the company’s Florida mega-resort, Walt Disney World, which reopened in mid-July, has performed worse than the company had anticipated.

“We expect that demand will grow when the Covid situation in Florida improves,” Ms. McCarthy said on the conference call. Florida reported roughly 5,500 new coronavirus infections on Tuesday. That is down from more than 9,000 a day last week but is still among the highest infection rates in the nation.

Disney’s theme parks have long been watched as a bellwether for the broader economy. It is unclear whether the masses — reeling from widespread pay cuts and job losses — will be able to afford Disney vacations in the months and years ahead. So far, Disney has not reduced its ticket prices.

NBCUniversal, which operates two major theme parks in Orlando, has also indicated that demand is lighter than anticipated. Universal has put into place multiple rounds of layoffs since its Florida parks reopened in early June, and the company in recent days announced a startling promotion for Florida residents: buy one two-park adult ticket ($164) and get unlimited visits through the end of the year. NBCUniversal said last week that revenue at its theme park unit shrank to $87 million in the most-recent quarter from $1.46 billion.

Brooks Barnes is a media and entertainment reporter, covering all things Hollywood. He joined The Times in 2007 as a business reporter focused primarily on the Walt Disney Company. He previously worked for The Wall Street Journal. More about Brooks Barnes

disney business model 2020

Disney's business model: a scalable dream factory

Disney recently broke a record with ‘Frozen’, one of the highest grossing movies of all time. But Disney’s business goes beyond producing movies and experiences. It’s about building and sustaining brands. Watch as we uncover why this well-oiled dream machine is a great case of scalable business.

Disney has made generations of kids and adults dream of imaginary worlds. One of its recent movies, Frozen, has generated $1.27 billion at the global box office, and brought more than $1 billion in merchandise sales. We visualize Disney's business model below, and explain the central role of its brands. 

Tools and techniques used

  • Business Model Canvas
  • Story-telling  one sticky note at a time

Critical elements ‍

  • Disney builds brands around its characters and stories. Cinemas and entertainment platforms pay distribution fees to broadcast Disney movies to their audience.
  • Once a movie becomes a hit, Disney leverages its brands and offers licensing rights that allow manufacturers to use Disney characters on their products.  
  • You can relive the magic of Disney movies at themed parks. Everything from the shows that people can watch to the souvenirs they buy are based on the Disney brands.
  • Disney's business model is scalable: Its brands fuel many value propositions and generate diverse revenue streams.
  • Disney’s business is not just about making movies, but about creating and sustaining brands.

Tell us how you can apply the lessons drawn from Disney's business model in your own company.

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The Walt Disney Company (DIS): Business Model Canvas

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Key Partnerships

  • Key Activities

Key Resources

Value propositions, customer relationships, customer segments, cost structure, revenue streams, introduction.

The world of entertainment is rapidly evolving, with new technologies and emerging trends constantly shaping the industry. According to a recent report by Statista, the global media and entertainment market is expected to reach a staggering $2.6 trillion by 2023, with digital media and streaming services driving much of this growth.

Amidst this competitive landscape, The Walt Disney Company (DIS) has emerged as a leading player, with a diversified portfolio of content, franchises, and media platforms. From blockbuster movies to beloved theme parks, Disney has cemented its position as a household name, with a loyal customer base and a reputation for innovation and creativity.

In this blog post, we will delve into the business model canvas for The Walt Disney Company, analyzing their key activities, resources, and customer segments. We will also highlight their emphasis on corporate social responsibility and sustainability, and discuss how they are navigating the challenges and opportunities of the ever-evolving entertainment industry.

  • Overview of The Walt Disney Company
  • Industry growth and trends
  • Business model canvas analysis
  • Corporate social responsibility initiatives

Key Activities:

The Walt Disney Company is a multinational mass media and entertainment conglomerate that engages in a range of activities to create and distribute its products and services. The key activities of The Walt Disney Company are:

  • Media networks: The company operates several media networks, including ABC, ESPN, and Disney Channel. The key activity of this segment is to create and distribute content for television and digital platforms.
  • Parks and resorts: The Parks and Resorts segment of The Walt Disney Company is responsible for the operation and management of theme parks, resorts, and cruise lines. Key activities in this segment include attraction design and development, entertainment programming, and hospitality services.
  • Studio entertainment: The Studio Entertainment segment of The Walt Disney Company is responsible for the production and distribution of motion pictures, music, and live stage plays. Key activities in this segment include film production and distribution, music production and distribution, and theatrical show production.
  • Consumer products and interactive media: This segment of The Walt Disney Company is responsible for the development and distribution of licensed merchandise and interactive entertainment. Key activities in this segment include product design and development, licensing, and digital game development.
  • Corporate and other: This segment of The Walt Disney Company includes the company's corporate headquarters and other support functions. Key activities in this segment include finance, legal, human resources, and IT services.

By engaging in these key activities, The Walt Disney Company is able to create and distribute high-quality entertainment content to consumers around the world, making it a leader in the media and entertainment industry.

The Walt Disney Company (DIS) is a media and entertainment conglomerate that operates a diverse range of businesses, including theme parks, movies, television networks, and consumer products. As such, the company relies on a wide range of key resources to support its operations, including:

  • Intellectual property: Disney is known for its iconic characters and stories, such as Mickey Mouse, Cinderella, and Star Wars. The company's vast library of intellectual property is a key resource that enables it to create and license content for various media and consumer products.
  • Talent: Disney employs a diverse range of talented professionals, including writers, producers, animators, actors, and theme park designers. The company's ability to attract and retain top talent is critical to its success, as it enables Disney to create high-quality content and experiences.
  • Theme parks and resorts: Disney operates several theme parks and resorts around the world, including Disneyland, Disney World, and Shanghai Disney Resort. These assets are key resources that generate significant revenue and help to promote Disney's brand.
  • Production facilities: Disney owns and operates several production facilities, including sound stages, animation studios, and post-production facilities. These resources enable the company to produce its own content in-house and maintain complete creative control over its properties.
  • Distribution channels: Disney has established relationships with various distribution channels, including movie theaters, cable and satellite networks, and online streaming platforms. These channels enable Disney to reach large audiences and generate revenue through various licensing and distribution deals.
  • Consumer products: Disney's vast array of consumer products, including toys, apparel, and home goods, are key resources that enable the company to extend its brand beyond its core media and entertainment businesses.

Overall, Disney's key resources enable the company to create and distribute high-quality content and experiences that resonate with audiences around the world. These resources help to drive the company's growth and support its position as a leader in the media and entertainment industry.

  • Entertainment for All Ages: The Walt Disney Company provides high-quality entertainment that appeals to audiences of all ages. From animated movies to theme parks, Disney offers something for everyone.
  • Brand Recognition: The Disney brand is one of the most recognizable in the world. Consumers trust and identify with Disney, which helps to drive sales and customer loyalty.
  • Family-Friendly Environment: Disney creates a family-friendly environment that is safe and welcoming for all visitors. This is a key selling point for parents who want to create lasting memories with their children.
  • Creative Storytelling: Disney is known for its compelling and creative storytelling, which keeps audiences engaged and coming back for more. This is evident in the company's movies, TV shows, and theme park experiences.
  • High-Quality Products: From toys to clothing to home goods, Disney products are known for their high quality and attention to detail. This allows the company to command premium pricing and provides a strong competitive advantage.
  • Variety of Offerings: Disney offers a wide range of products and services, including movies, TV shows, theme parks, merchandise, and more. This variety helps to appeal to a broad customer base and provides multiple revenue streams for the company.
  • Innovation: Disney is constantly innovating and introducing new experiences to its customers. From new rides at its theme parks to new technologies used in its movies, Disney keeps its offerings fresh and relevant.

Overall, the value propositions of The Walt Disney Company center around high-quality entertainment, a strong brand and reputation, a family-friendly environment, and a wide variety of offerings that cater to customers of all ages and interests. By consistently delivering on these value propositions, Disney has become a beloved and trusted brand that generates significant revenue and customer loyalty.

The Walt Disney Company works tirelessly to create a diversified range of products and services that cater to the various needs and wants of its customers. The company's customer relationships strategy is focused on providing an exceptional overall experience that helps to build long-term and loyal relationships with its customers.

The company recognizes that customer relationships are an essential component of its business strategy and invests heavily in customer engagement across its various segments. From theme parks to movies, Disney provides a range of engaging experiences that bring customers into its world and keep them coming back for more.

  • Personalization: Disney uses data analytics to gain insights into customer behavior and preferences, enabling it to provide personalized experiences. Customers are treated with personalized attention at theme parks through customized messages or with members-only benefits with their loyalty memberships.
  • Brand Loyalty Programs: The Walt Disney Company offers an array of loyalty programs, such as Disney Plus, Disney Rewards, and Disney Visa that incentivize customers to engage with its products and services. By rewarding customer loyalty, there is an increase in customer retention for the business.
  • Excellent Customer Service: Disney is known for its high level of customer service, which goes beyond the traditional needs of customers. Employees are trained to go the extra mile to ensure customers are satisfied.
  • Community Building: Disney works hard to foster a sense of community among its customers, establishing fan clubs, forums, and other online communities where customers can engage with each other and share their experiences.

Overall, The Walt Disney Company develops and maintains strong customer relationships through personalized experiences, loyalty programs, top-notch customer service, and community building. By doing so, it has been able to create and maintain a loyal customer base that continues to support and engage with its products and services.

  • Broadcasting : Disney's owned and operated broadcast television network, ABC, reaches millions of viewers in the United States. Along with ABC, Disney also owns several cable channels such as ESPN, Disney Channel, and Freeform.
  • Streaming : Disney+ is the company's own streaming service that was launched in 2019. It streams original content, as well as movies and TV shows from Disney's vast library. The streaming platform is available globally and can be accessed through various devices, including smartphones, tablets, gaming consoles, and smart TVs.
  • Film Production and Distribution : Disney produces and distributes films through its subsidiaries, including Walt Disney Pictures, Pixar, Marvel Studios, and Lucasfilm. The films are distributed through cinemas globally and later sold as DVDs/Blu-rays or available for download on digital platforms such as iTunes and Amazon Prime Video.
  • Theme Parks and Resorts : Disney's theme parks and resorts are located worldwide, and they attract millions of visitors each year. The company's entertainment offerings include rides, shows, parades, meet-and-greets with Disney characters, and resorts. These offerings are marketed through the company's website, travel agencies, and partnerships with airlines and hotels.
  • Consumer Products : Disney licenses its intellectual property to companies that manufacture and distribute consumer products like clothing, toys, books, and video games. These products are sold through various retailers, including department stores, theme park stores, and the company's own online store.
  • Publishing : Disney publishes and distributes books, magazines, and comics globally through its various publishing subsidiaries. The content is also available in digital formats like e-books and audiobooks.

The Walt Disney Company has a diversified cost structure that includes both fixed and variable costs.

Fixed Costs

  • Production Costs: Disney incurs fixed costs for film and television production. These costs include salaries of actors, writers, directors, producers, and other crew members.
  • Operational Costs: Disney maintains theme parks, resorts, and retail stores with fixed operational costs such as rent, utilities, salaries, and maintenance.
  • Marketing Costs: Disney incurs fixed costs for advertising and promotion of its products and services.
  • Technology Costs: Disney invests in information technology, research, and development to enhance its products and services, resulting in fixed costs.

Variable Costs

  • Raw Material Costs: Disney incurs variable costs for raw material such as film, paper, and merchandise.
  • Production Costs: Disney also incurs variable production costs such as special effects, animation, and music royalties.
  • Sales and Distribution Costs: Costs incurred during the sales process, such as commissions or shipping, are considered variable.

To reduce costs, Disney has implemented efficient resource utilization, such as shared services across business units and outsourcing non-core operations. In addition, Disney has entered into partnerships and collaborations to reduce costs and risks of production and distribution.

Overall, Disney’s cost structure allows for efficient production and distribution of diverse products and services. With effective cost management, Disney can continue to innovate while delivering value to its customers.

The Walt Disney Company generates revenue from various sources. Here are the most significant revenue streams:

  • Media Networks: This segment includes cable and broadcast TV networks, radio and television stations, and content distribution. The revenue is earned through advertising, fees charged to cable and satellite operators, and affiliate fees.
  • Parks and Resorts: This segment includes theme parks, resorts, and cruise lines. The revenue is generated from ticket sales, hotel reservations, food and beverage sales, merchandise sales, and other guest services.
  • Studio Entertainment: This segment includes the production and distribution of movies, music, and stage plays. The revenue is earned through box office sales, DVD and Blu-ray sales, TV licensing, and digital downloads.
  • Consumer Products and Interactive Media: This segment includes licensed merchandise, books, magazines, video games, and mobile and social games. The revenue is generated from product sales, licensing fees, and advertising.

In addition to these primary revenue streams, The Walt Disney Company also generates income from other sources, such as live entertainment events, TV and radio stations, and acquisitions.

Overall, The Walt Disney Company has a diversified revenue stream and leverages its brand image to maximize its earnings from various sources.

In conclusion, The Walt Disney Company has a robust business model that has kept it operating and expanding over the years. Its key partners and suppliers have played a crucial role in enabling it to produce high-quality content, products, and services that resonate with its customers. The company's revenue streams from its diversified portfolio include media networks, parks and resorts, and studio entertainment, among others. By leveraging its strong brand, Disney has managed to create a loyal customer base that further strengthens its brand equity. The company's key activities revolve around content creation, distribution, and broadcasting, which generate significant value for its stakeholders. Additionally, the company's cost structure is aligned with its revenue streams, allowing it to maximize its profits while creating value for its customers. Overall, The Walt Disney Company's business model is sustainable, and its constant innovation and adaptation to customer needs will ensure its continued success in the future.

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Disney’s Business Model

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Who are walt disney's main competitors.

disney business model 2020

The Walt Disney Company ( DIS ) built itself a diverse empire since the 1920s, creating a wide range of lucrative products in a number of marketplaces. As the largest mass media conglomerate in the world, Disney is best known for its film and TV productions and theme parks. Its television arm controls the ABC television network, with eight owned-and-operated broadcasting stations and over 240 affiliates, as well as a number of cable networks, including Freeform, Disney Channel, and ESPN.

Walt Disney Pictures, Disney Animation, and Pixar produce films for Walt Disney Studios, and Disney also owns Marvel Entertainment and Lucasfilm, which are huge cash cows for the company—notably, in the film and merchandise markets. The company also has a presence in the travel industry, with the Disney Cruise lines. And the company expanded its presence of theme parks beyond the U.S.-based Walt Disney World and Disneyland to include others around the world.

In this article, we dissect the company and highlight its business model, business units, and more importantly, its main rivals.

Key Takeaways

  • Disney is a media and entertainment powerhouse that has a well-diversified business plan.
  • The company is well-known for its animated classics but also deals in film and television production, travel and tourism, streaming services, and merchandising.
  • The company reports revenue for two main units: Parks,   Experiences and Products and Media & Entertainment Distribution.
  • Because it has its hands in so many corners of the media industry, it also has many competitors.
  • Disney has been resilient, taking out the competition when necessary.

Walt Disney has historically been associated with animated classics like Cinderella, Snow White, and Bambi and, most notably, characters like Mickey and Minnie Mouse, Donald Duck, and Goofy. But its reach doesn't just end there. As noted above, Disney is a well-diversified company that deals in television and film production, travel and tourism , as well as theme parks.

Financial results were released for 2021 in November 2021. The company reported annual revenue of $$67.14 billion compared to $65.39 billion from 2020. That represents a 3% increase, thanks to subscriber growth for its streaming services.

In 2018, the company went through a strategic reorganization , creating four different business segments. These businesses were later reorganized to form two major units and four content groups. More details on these are listed below.

Parks, Experiences and Products

This segment is made up of a number of global theme parks, water parks, and resorts in the United States, Europe, and Asia. Disney's cruise line operations, which were established in 1998, are also part of this unit. This segment derives the majority of its revenue theme and water park passes as well as related amenities. Merchandise, resort stays, and licensing of the company's intellectual property (IP) are also major revenue drivers.

The Parks,   Experiences and Products segment reported total revenue of about $16.55 billion for the 2021 fiscal year. That was a 3% drop from the previous year when it earned roughly $17.04 billion. Disney attributed the decline to the ongoing challenges from the COVID-19 pandemic.

Media and Entertainment Distribution

Disney combined all of its media and entertainment brands under the Media & Entertainment Distribution banner. The unit houses Disney's international businesses and a variety of direct-to-consumer streaming services, including Disney+ and Hulu , in which the company owns a majority position. As such, it melds advertising, media distribution, and technology into one.

In 2020, the company announced it this unit would be split into different content groups, including:

  • Studios: This content group is made up of Walt Disney Studios, Walt Disney Animation, Pixar, Marvel Studios, Lucasfilm, 20th Century Studios, and Searchlight Pictures. Together, these studios create what the company calls "theatrical and episodic content" for Disney's streaming platforms.
  • General Entertainment: This content group is responsible for creating long-form content for the company's streaming platforms and includes properties, such as 20th Television, ABC Signature, and Touchstone Television. It also houses ABC News, the family of Disney Channels, Freeform, FX, and National Geographic.
  • Sports: This unit holds sports news and content, including live programming through ESPN, ESPN+, ABC, and other cable channels.

In 2021, Disney's Media & Entertainment Distribution unit earned revenue of about $50.87 billion. This was a jump of 5% from 2020 when it recorded $48.35 billion in revenue. The increase was the result of higher advertising revenue for live sports,

Bob Chapek assumed the role of chief executive officer (CEO) at the Walt Disney Corporation, taking the reins from Bob Iger in February 2020, who headed the company for 15 years.

Disney's Competitors

As mentioned earlier, Disney is a fairly well-diversified company. Its reach extends beyond entertainment, including travel and tourism, theme parks, and consumer products among others. So if you want a peek at some of the main competition, it's probably a good idea to look at them based on the business unit. We've noted some of the largest ones below.

Film and Television

As noted above, Disney is a key player in the film and television business, producing films and televisions shows. Its owned-and-operated stations in some of the major U.S. metropolitan centers produce local news and shows, as well. The following are some of its key competitors in this sphere:

  • Comcast ( CMCSA ): Comcast is another diversified company that has its hand in many different pots. Its film and television studio unit include major names like Universal, DreamWorks, and Universal Television. The company also owns NBCUniversal, which includes a series of owned and operated television stations under the NBC banner as well as CNBC, MSNBC, and Telemundo. The studios unit reported revenue of about $9.5 billion for 2021 while the media unit earned roughly $22.8 billion.
  • Sony: Sony's motion picture group is comprised of a number of properties, including Sony Pictures, Columbia Pictures, Screen Gems, and TriStar Pictures. The company's Sony Pictures Television is a key producer and distributor for television with joint ventures (JVs) across the world. The company reports full-year results in April or May each year. Net profits for the third quarter of 2021 came in at about $1.3 billion thanks, in part, to Spiderman.

Streaming Services

Disney launched its streaming service in 2019, bringing together all of its original Disney content, including animated films and TV series, as well as other offerings from Marvel, Pixar, National Geographic, Star, and Star Wars. The company continues to produce and distribute original content on the platform.

The service is offered in more than 50 different countries with plans to launch in other markets. Subscribers can choose a monthly or annual membership, which is billed automatically to a credit card.

  • Netflix ( NFLX ): The streaming giant's history goes back to 1997 when its creators started a DVD-by-mail rental business. The company completed its initial public offering (IPO) in 2002 at $1 per share. With the fall in DVD demand, Netflix shifted its focus to streaming in 2007 and now streams television shows and movies around the world with more than 200 million members. It also produces original content that is available through its online and digital platforms. Netflix reported revenue of $30 billion in 2021.
  • Amazon Prime Video ( AMZN ): The e-commerce giant began streaming TV and film content to subscribers of its Prime membership in 2006. Like Netflix and Disney, Amazon also produces original content that is distributed directly through Prime Video. Members can also rent or buy content—charges go directly on the payment card associated with their Prime membership. Amazon boasts more than 200 million Prime members worldwide. Amazon's revenue for 2021 was $469.8 billion, which includes Prime.

Theme Parks

Disney owns and operates four major theme parks, including the two very popular Magic Kingdom Park and Epcot, as well as two water and sports-related parks in the United States. This is in addition to the other global parks it runs, including those in Europe and Asia. With 12 global theme parks around the world, Disney is a leader in the theme park business. But that doesn't mean it doesn't face any competition.

Challenging Disney's theme parks are major rivals:

  • Six Flags Entertainment ( SIX ): The largest theme park company and the largest water park operator in North America owns and operates 27 different theme parks and water parks across North America. In November 2019, Six Flags announced plans to open a new park in the Middle East with Six Flags Qiddiya, which will be located in Riyadh, Saudi Arabia. In 2021, the company earned about $1.5 million in revenue.
  • Cedar Fair ( FUN ): With 17 theme parks across Canada and the United States, Cedar Fair earned $1.34 billion in 2021. Cedar Fair also has two facilities for sports enthusiasts along with 11 resorts.
  • Universal Studios: Although it doesn't have nearly as many parks and attractions as the others listed, Universal still packs a huge punch, thanks to the popularity of the Harry Potter books and movies. These themed parks have helped boost Universal's attendance numbers at its five locations in the U.S. and Asia. Owned by Comcast, it earned $5 billion in revenue in 2021.

Disney's first cruise ship set sail in 1998. Its family-friendly cruise vacations helped "high margins and double digit returns on invested capital." The company expanded its fleet to include a total of five cruise line ships that sail to a number of destinations, including the Caribbean, Alaska, Hawaii, and Europe. The following are some of the company's stiffest competition within the cruise line industry.

  • Royal Caribbean ( RCL ): Established in 1969, Royal Caribbean offers some of the most immersive experiences on its fleet, including ice skating, rock climbing, and surfing. The company sails to more than 300 destinations on 26 different vessels. Total revenue for RCL came in at $1.53 billion for the 2021 fiscal year.
  • Carnival ( CCL ): Carnival Corporation owns and operates a number of global cruise line brands, including Carnival, Princess Cruises, and Holland America Line. It boasts a fleet of 87 ships that dock in more than 700 worldwide destinations. The company plans to add as many as 16 new vessels to its fleet by 2025. The company reported total revenue of $1.91 billion during 2021.
  • Norwegian ( NCLH ): Norwegian was founded in 1966. It sails to more than 450 destinations, offering what the company calls "the freestyle experience." Rather than binding travelers to a set schedule, the company allows its passengers to dine and do activities on their own time. In 2021, the company earned revenue of $0.6 billion.

Disney's profits often fluctuate due, in part, to seasonality as well as the timing of releases. But it retains a massive presence in several industries and one that most people identify with when they think of animated films and theme parks.

Disney's studio entertainment businesses are constantly innovating, which is evident in its profits often show this. Disney produces a range of consumer products with involvement in licensing, publishing, and retail and thus competes with other vendors in these areas. However, according to Market Realist, Disney believes it is the largest worldwide licensor of character-based merchandise.

Disney made headlines when it announced it negotiated a deal to acquire certain assets from 21st Century Fox in March 2019, particularly its film studio and the streaming service Hulu. The plan was to rival Netflix. The $71.3 billion deal was completed on March 20, 2019, making Disney the largest media powerhouse on the planet.

The COVID-19 pandemic hit Disney and its competitors' theme parks and resorts, cutting into attendance numbers and, therefore, revenue. But the company opened the gates to its theme parks for the entire 4th quarter in 2021, which was not the case for all Disney locations in the fourth quarter of 2020. As noted above, Disney reported revenue of $16.55 billion for its Parks, Experiences, and Product segment for 2021.

How Does Disney Compete With Competitors?

Disney is a powerhouse in media, entertainment, travel, and tourism, so it comes as no surprise why its rivals do whatever they can to try to get an edge on the market. One of the main ways that the company stays on top of its competition is through its brand identity. Disney has built a very strong and reputable base that is visible through its theme parks as well as its film and television offerings. For instance, it has successfully transferred its brand over to the cruise line industry, targeting families with young children by advertising Disney cruises. Furthermore, acquisitions, such as Hulu's streaming service, also helps chisel away at its rivals' market share.

How Is Disney Different From Its Competitors?

Disney has taken careful steps to create a very strong brand identity, which is what sets it apart from its competition. Let's face it, when most people think of princesses, they think of Disney. The company has also been able to innovate and diversify and use that brand identity to create a formula for success. This all leads to a fiercely loyal customer and fan base.

Who Is Disney’s Biggest Competitor?

Naming Disney's biggest rivals depends on the business unit. If you're looking at film and television, its rivals include Universal (which is owned by Comcast), Sony, Time Warner, and ViacomCBS. Netflix and Amazon are Disney's main competitors in the streaming service space. In the theme park space, Six Flags, Cedar Fair, and Universal work to take away market share from Disney. Travel and tourism companies, such as Royal Caribbean, Carnival, and Norwegian, are among its main competitors.

Are Disney and Universal Rivals?

Disney and Universal are major rivals overall. Both are major conglomerates with a global presence. But they also compete against one another in several business segments, including film and television production and theme parks and entertainment.

Most of us automatically think of Mickey Mouse or some of the animated classics when we hear the name Disney. But there's more to the company than just cartoons and fairy tales. In fact, Disney is a well-diversified powerhouse that has its hand in many different business units. This includes theme parks, travel, merchandising, advertising, on top of film and television production and distribution. Some of the company's rivals are also taking a cue from the company and expanding their horizons, hoping that their diversified business plans will help them eat away at Disney's market share.

The Walt Disney Company. " Fiscal Year 2020 Annual Financial Report ," Pages 5-6.

The Walt Disney Company. " About the Walt Disney Company ."

The Walt Disney Company. " THE WALT DISNEY COMPANY REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS FOR FISCAL 2021 ."

The Walt Disney Company. " The Walt Disney Company Announces Strategic Reorganization ."

The Walt Disney Company. " The Walt Disney Company Announces Strategic Reorganization Of Its Media And Entertainment Businesses ."

The Walt Disney Company. " Form 10-K for the fiscal year ended October 2, 2021 ," Pages 13 and 14.

The Walt Disney Company. " BOB CHAPEK NAMED CHIEF EXECUTIVE OFFICER OF THE WALT DISNEY COMPANY ."

Comcast. " Brands ."

Comcast. " Comcast Reports 4th Quarter and Full Year 2021 Results ."

Sony Pictures. " DIVISIONS ."

Yahoo! Entertainment. " Sony Pictures Profits Tops $1.3 Billion in Q3 2021 ."

Disney+. " Getting started with Disney+ ."

Disney+. " Where is Disney+ available? "

Netflix. " Stories move us. They make us feel more emotion, see new perspectives, and bring us closer to each other ."

Netflix Investors. " January 20, 2022 ."

Amazon Prime. " What is Prime Video? "

Amazon. " Amazon.com Announces Fourth Quarter Results ."

Six Flags. " Find your park ."

Six Flags Qiddiya. " NEWS ."

Six Flags. " Six Flags Announces Fourth Quarter and Full Year 2021 Performance ."

Cedar Fair. " About Us ."

Cedar Fair. " CEDAR FAIR REPORTS 2021 FOURTH-QUARTER AND FULL-YEAR RESULTS ."

Cedar Fair. " World-Class Rides, Slides and So Much More ."

Universal. " Where Will You Woah? "

The Walt Disney Company. " Disney Announces Expansion Of Successful Cruise Business ."

Disney Cruise Line. " Disney Cruise Line Fleet ."

Disney Cruise Line. " Disney Cruise Line Destinations ."

Royal Caribbean International. " OUR BRAND ."

Royal Caribbean International. " ROYAL DESTINATIONS ."

Royal Caribbean International. " DISCOVER THE BEST CRUISE SHIPS ."

Royal Caribbean Group. " ROYAL CARIBBEAN GROUP REPORTS ON 2021 RESULTS, PROVIDES BUSINESS UPDATE ."

Carnival Corporation & PLC. " Corporate Information ."

Carnival Corporation & PLC. " CARNIVAL CORPORATION & PLC PROVIDES FOURTH QUARTER 2021 BUSINESS UPDATE ," Page 9.

Norwegian Cruise Line. " ABOUT US ."

Norwegian Cruise Line. " Experience Freestyle Cruising ."

Norwegian Cruise Line Holdings Ltd. " Norwegian Cruise Line Holdings Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Business Update ."

Market Realist. " Must-Know Guide to the Walt Disney Company's Competitors ."

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The Walt Disney Company. " The Walt Disney Company Reports Fourth Quarter and Full Year Earnings for Fiscal 2021 ," Page 7-8.

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Digital Transformation Stories: Disney

Disney+ launched Nov 2019 by the animation giant is one of the latest examples of digitally transforming a business to embrace emerging tech and create memorable customer experiences. Studying their case can serve as an inspiration to many companies.

The digital transformation of an organization is its reinvention through the infinite and increasing possibilities technology offers. However, the key to this process is not technology or digitalisation itself. When we talk about digital transformation, the key lies in transformation or reinvention.

It is a matter of rethinking the way we ad value to the final user, starting with optimizing the operational processes with the use of analytics and artificial intelligence in order to create memorable experiences for those users and consistencies through all the touch points. It is a process that accelerated especially from the popularization of the smartphone in 2007 and that now is impacting all business sectors.

Let's just think about what is the alternative to digital transformation for an organization. What do we stick to if we don't reinvent ourselves? What if we kept betting on the same thing that has worked for the past 5, 10, 20 years?

The great risk of not joining this wave of change is that the new digital-native entrants generate a disruption in your own sector that dramatically reduces our market share. Porter already told us in 1979 that the threat of new entrants to an industry was a major factor. Today it is more so than ever, since it is the new digital-native entrants that are generating the fastest acceleration ever seen in all sectors . This is the case of Amazon in retail, Apple in mobile phones, Uber in the taxi, AirBNB in ​​hotels, and what may be the next biggest disruption, Tesla, in this case in the automotive sector.

But we were talking about Disney. This animation giant has recently entered the streaming business competing with Netflix. How is this movement understood? What need does this historic company have to enter this new business? First we must understand Disney's business model.

How does Disney generate value? Seeing Disney as an almost perfect money-making machine is far less romantic than the organization's classic vision of a "dream factory." Without denying the latter, the definition is very true to reality, in my opinion. The generation of value in this case goes through the creation of brands and especially by a masterful exploitation of them :

  • Disney builds brands around their characters and stories. Cinemas and entertainment platforms pay to stream the movies.
  • The next step is to offer licensing rights that allow manufacturers to use Disney characters in consumer products.
  • Creation of experiences in theme parks. In them, all the attractions and products you can buy are based on Disney brands.
  • Gain greater presence through media control: Disney owns ABC television network and the cable company ESPN
  • Direct access to fans through their own stores: the Disney Stores, where the brand's products are sold.

So Disney's business is not so much about making movies, but about creating and exploiting brands. It is a practically perfect marketing machine. Why has Disney bought the brands Pixar, Marvel, Star Wars,...? Because there is no organization that is as good as Disney at exploiting and ultimately increasing the value of a brand . It is a marketing machine perfectly designed to create value around a story. As an example, we have the following diagram from the Disney Archives, dated 1957. Let's look at how Walt Disney designed and planned how each of the pieces of the Disney marketing machine fit together. One could almost say that Walt Disney was a true precursor to the Business Model Canvas!

Disney digital transformation

Contrary to common belief, most of Disney's sales don't come from movies. For years, the company's unit generating the most revenue has been Media Networks, and specifically ESPN subscriptions.

disney digital transformation

The problem is that the Media Networks unit has been recording revenue declines for years, due in large part to a lower ESPN audience. If ESPN had 100M subscribers in 2011, six years later went down to 87M households subscribed . Additionally, ESPN's average audience fell 7% and 11% yoy in 2015 and 2016, respectively, according to Forbes. In turn, this decline in audience is impacting ESPN's advertising revenue.

The cause of this setback can be likely found in the consumer shift toward new alternatives for streamed content, stepping away from expensive TV subscriptions with no personalized options.  We clearly see the effect of new digital-native entrants in a consolidated industry like entertainment, and in a company with almost 100+ years of history like Disney. They now own their own streaming platform, competing with rivals like Netflix, Amazon Prime, and arguably Hulu (Disney shares ownership with Comcast/NBC) . 

households with ESPN

Now that we have understood Disney's business model and how it is being threatened by new digital entrants, the movement of Disney is better understood, that is, the creation of a streaming platform that can compete directly with Netflix .

Disney + has had instant success. I think it may be an example of the type of digital transformation that many traditional brands can do . The use of its immense brand power has made it possible to quickly adapt to the digital landscape of the 21st century, dragging an entire legion of fans towards a type of platform they have already become accustomed to. The company has quickly adapted to new consumer habits and is thus able to compete with industry disruptors. More than resist under schemes of the s. XX, has adapted in record time.

The steps Disney can take from now on would be to advance customization as it continues with the digital transformation. Now that they own not only digital content but also a modern platform, they are able to access user data. We can expect Disney to look for new ways to increase the value of its brands through the use of data to make personalized recommendations for each viewer.

Disney + instantly launched to compete at the same level with the disruptors of its own market. It is a sample of how a company can adapt to the new times. Traditional brands can see Disney as an example in digital transformation. Following their footsteps is the best way to remain relevant and continue to grow in the age of digitization, which has only just begun .

disney business model 2020

Martí Fàbrega

Martí is a Digital Transformation Consultant and Senior Business Development Manager at SEIDOR Opentrends. His aim is to transform technology into business value for his clients, putting the greatest possible focus on innovation.

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Disney Business Model – How Does Disney Make Money?

Whether you’re 6 years old or 60 years old, Disney must be the happiest spot for you. Don’t you agree? Yes!!! Disney is filled with entertainment and excitement. People can discover all the things under one roof such as movies, events, theme parks, characters, shopping, videos, music and whatnot. Kids and teens are having lots and lots of fun at Disney. They’re spending time watching their favourite Disney movie and shopping for their favourite character tees.

“Walt Disney” was a popular American motion movie and television producer and showman. Walt Disney is recognised as a pioneer of animated and cartoon movies. It includes Mickey Mouse, Snow White, etc. Walt Disney is the creator of the exciting and amazing amusement parks Disneyland, Disney World and a lot more.

Page Contents

What is Disney?

“ The Walt Disney Company ” is often known as “Disney”. It is a leading American diversified company, headquarters is located in California. Originally, Walt Disney was founded on Oct 16th, 1923 by two brothers “Walt” and “Roy O” . All it started with the Mickey Mouse character and starred in many Disney films. This was the first character represented by Disney. The company has extended its wings by introducing other animated films in 1934. Snow White, World War II and Seven Dwarfs are animated. From them to now, Disney is ruling the entertainment work and making good profits. It’s no surprise that Disney is the largest and leading media company in the world. The Disney net profit is $130 billion in 2020.

Wandering how Disney is earning billions of dollars? Yes!!! Let’s have a look.

How does Disney Make Money?

Disney’s recent earnings are making the investors happy. It is generating more and more profits since the beginning. Disney Plus subscribers are charged $7 per month or $70 per year. However, Disney+ has over 9 million subscribers on Aug 3, 2020. Currently, Disney+ has more than 300 million active users. 

Disney Business Model

The Walt Disney Company has earned over $130 billion in 2020. The company operates through multiple business segments. The important business segments are parks, media networks, movies , experiences and products. Let’s discuss them

Media Networks

“Disney Media Networks” is the primary subsidiary of Disney Co. The media and entertainment network consists of several television networks such as National Geographic, ESPN and more. It’s no surprise that Media Network is the primary source of income for Disney. As per the analysis, the Media Network business segment has earned $6.6 billion in Q3 2020 .

Media Network generates profits through various sources such as affiliate fees, advertisement, licensing and more. This could be a constant and consistent business segment that has several competitors in the market. Disney Media is subject to its strict regulations.

Parks and Resorts

Family vacations at Disney parks and resorts are fun. Currently, Disney has more than 10 theme parks around the world. It includes the Disneyland Resort, Tokyo Disney Resort, Disneyland Paris, and Hong Kong Disneyland.

Disney parks and resorts business segment is making a good income to Disney. The profits are generated through entrance tickets, food, beverages, hotel booking, night-stays and more. The profit for this business segment is not predictable because this may be influenced by several factors like exchange rate, travel condition and a lot more. Due to the pandemic situation, Disney just earned $983 million in Q2 2020. It means 7% of Disney revenue.

Is there anybody who says NO to movies? Of Course nobody. Irrespective of the age everyone enjoys watching movies and gets relaxed. For a few people, watching movies can be a stress buster. Coming to Disney, the company earned a good income through Studio Entertainment.

Studio Entertainment’s business segment is engaged in the motion picture production and distribution via “The Walt Disney Picture ”, “Marvel”, “Touchstone”, “Pixar”, “Twentieth Century Fox”, “UVC banner” and other popular companies. Disney is making good revenue by production and distributing live entertainment, movies, music, etc. The revenue is generated through licensing the pictures to movie theatres, Blu-ray, play tickets and other services. Disney has broken down the world record for selling the movie tickets. Over 40% of the ticket sales in the United States are through cinemas.

Disney Studio Entertainment has earned $1.7 billion in Q3 2020. This segment is considered as 13% of Disney revenue.

Direct-to-consumer and Products

The ultimate mission of “The Walt Disney Company’s Direct to Consumer & International” business segment is to allow customers across the globe with entertainment and excellent products. This business segment includes local and international television networks like Disney, National Geographic, Star, Fox, ESPN and more. Disney has introduced direct-to-consumer streaming services – Disney+, Hotstar, ESPN+ and Hulu . Disney is making good income through various channels such as advertisement, affiliate fees, subscription charges and more.

The Disney licenses their trade names, visual properties and characters to e-commerce and publishers across the globe. On the other hand, the company is running English language centres in China on popular children’s magazines, e-book, etc. Disney has earned income by selling its merchandise on retail and wholesale stores. Disney has earned $40 billion on Q3 2020. It means 30% of the total Disney revenue. 

Disney’s Recent Developments

Hope you got a clear understanding of how does Disney make money. Now let’s discuss the recent developments introduced by Disney.

The company announced that Disney has earned good subscribers on Disney+ . In their press release, the company has indicated that Disney+ has more than 57.5 million subscribers as of Q3 2020 . Also, Disney has mentioned the other income source is through theme parks, resorts, movies and more after re-opened.

Wrapping Up

Disney company is a diversified media and global entertainment organization that operates various products such as theme parks, movies, resorts, broadcasting and more. On the other hand, Disney is conducting live entertainment events and broadcast through its effective digital-content streaming services. The company has generated over $130 million in revenue as of Q3 2020. Disney has an amazing business model. Simply put, the company has earned money through media networks, studio-entertainments, parks, resorts, direct-to-consumer and products. The revenue graph is increasing every year as Disney is offering excellent services such as entertainment, products and a lot more to customers.

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The Walt Disney Company Announces Strategic Restructuring, Restoring Accountability to Creative Businesses

The Walt Disney Company today announced details of its strategic restructuring that will refocus the organization on creativity, empower creative leaders and ensure they are accountable for all aspects of their businesses globally, and put the company’s streaming business on a path to sustained growth and profitability. Effective immediately, the company will be organized into three core, collaborative business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products. The leaders of each business segment will have full operational control and financial responsibility for creative development, marketing, technology, sales, and distribution, and will be accountable for driving business efficiencies globally.

“For nearly 100 years, storytelling and creativity have fueled The Walt Disney Company, with virtually every interaction we have with our consumers emanating from something creative,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “I am committed to positioning this company for a new era of growth. Our strategic restructuring will return creativity to the center of the company, increase accountability, improve results, and ensure the quality of our content and experiences.”

Disney Entertainment will be co-chaired by Alan Bergman and Dana Walden, who will be responsible for the company’s full portfolio of entertainment media and content businesses globally, including streaming.

ESPN will include ESPN networks and ESPN+ and will be led by Jimmy Pitaro. Pitaro will also be responsible for the management and supervision of the company’s full portfolio of sports content, products, and experiences across all of Disney’s platforms worldwide, including its international sports channels.

The streaming business remains a top priority for the company. Disney’s unparalleled collection of renowned and trusted franchises and brands, combined with the reach of the streaming portfolio (consisting of Disney+, ESPN+, Hulu, Star+, and Hotstar) creates rich and direct connections between the consumer and the company’s stories and characters, powering growth across the entire company.

“Every day, I am reminded of what incredible talent we have leading the many facets of this company,” Iger said. “Thanks to my management team and our exceptional business leaders, who have acted quickly and strategically on the important changes we are undertaking today, I am as encouraged as ever by what the future holds for The Walt Disney Company.”

Bergman and Walden will oversee the company’s global entertainment streaming businesses and manage all content decisions for those services, including Disney+ and Hulu.

Bergman will also have primary oversight of the following businesses and content brands: Disney Live Action, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Lucasfilm, 20th Century Studios, and Searchlight Pictures, as well as Disney Music Group and Disney Theatrical Group.

Walden will also have primary oversight of the following businesses and content brands: ABC Entertainment, ABC News, ABC Owned Televisions Stations, Disney Branded Television, Disney Television Studios, Freeform, FX, Hulu Originals, National Geographic Content, and Onyx Collective.

Pitaro will continue to oversee eight linear networks, including ESPN and ESPN2; sports content across all Disney domestic and, going forward, international platforms; ESPN+; ESPN Audio; ESPN Digital; ESPN Social; ESPN Fantasy; and a variety of owned sports events.

Effective immediately, several shared-service organizations across the company will support both Disney Entertainment and ESPN, facilitating company-wide efficiencies and creating a more cost-effective, coordinated, and streamlined approach to operations. These include Product and Technology, led by Aaron LaBerge; Advertising Sales, led by Rita Ferro; and Platform Distribution, led by Justin Connolly—excluding Theatrical Distribution and Music, which will be overseen by Bergman.

Outside of North America, the company’s media, entertainment, and sports content and operations will continue to be managed regionally by Luke Kang, President Asia Pacific; Jan Koeppen, President EMEA; Diego Lerner, President LATAM; and K Madhavan, President India. These leaders will report to Bergman, Walden, and Pitaro as part of their global responsibilities. As a result of the changes, Rebecca Campbell, Chairman, International Content and Operations, has decided to leave the company. An esteemed leader and longtime industry veteran, Campbell will stay on through June to help with the transition.

Disney Parks, Experiences and Products—encompassing the company’s award-winning theme parks, cruise line, resort destinations, and Adventures by Disney and National Geographic Expeditions, as well as Disney’s global consumer products, games, and publishing businesses—will continue under the leadership of Chairman Josh D’Amaro.

The organizational changes will be implemented immediately, and the company will begin reporting financial results under the new business structure by the end of the fiscal year.

Forward-Looking Statements

Certain statements in this email may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future structure, growth, profitability, positioning, results, creativity, quality, expenses, targets and other statements that are not historical in nature. These statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made. Management does not undertake any obligation to update these statements.

Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, new or expanded business lines or cessation of certain operations), our execution of our business plans (including the content we create and IP we invest in, our pricing decisions, our cost structure and our management and other personnel decisions) or other business decisions, as well as from developments beyond the Company’s control, including:

  • further deterioration in domestic and global economic conditions;
  • deterioration in or pressures from competitive conditions, including competition to create or acquire content and competition for talent;
  • consumer preferences and acceptance of our content, offerings, pricing model and price increases and the market for advertising sales on our DTC services and linear networks;
  • health concerns and their impact on our businesses and productions;
  • international, regulatory, legal, political, or military developments;
  • technological developments;
  • labor markets and activities;
  • adverse weather conditions or natural disasters; and
  • availability of content.

Each such risk includes the current and future impacts of, and may be amplified by, COVID-19 and related mitigation efforts.

Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):

  • our operations, business plans or profitability;
  • demand for our products and services;
  • the performance of the Company’s content;
  • our ability to create or obtain desirable content at or under the value we assign the content;
  • the advertising market for programming;
  • income tax expense; and
  • performance of some or all Company businesses either directly or through their impact on those who distribute our products.

Additional factors are set forth in the Company’s Annual Report on Form 10-K for the year ended October 1, 2022, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” quarterly reports on Form 10-Q, including under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and subsequent filings with the Securities and Exchange Commission.

The terms “Company,” “we,” and “our” are used above to refer collectively to the parent company and the subsidiaries through which our various businesses are actually conducted.

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Disney shares notch best day in more than three years after earnings bonanza

thumbnail

  • Walt Disney shares climbed more than 11% Thursday after a jam-packed earnings report.
  • CEO Bob Iger said the company would take its biggest step yet into gaming with a $1.5 billion stake in Epic Games, the maker of blockbuster Fortnite.
  • The company also said it would launch an ESPN streaming service in 2025; stream an exclusive version of musician Taylor Swift's Eras Tour movie on Disney+; and release a sequel to hit "Moana" this year.

In this article

Disney CEO Bob Iger: Disney entering into a strategic partnership with Epic Games

Disney shares spiked more than 11% Thursday, headed for the stock's best day since December 2020, after the company's fiscal first-quarter earnings beat estimates and it announced a slew of major deals and upcoming events.

In its most eye-catching news, CEO Bob Iger said the company would take its biggest step yet into gaming with a $1.5 billion stake in Epic Games, the maker of blockbuster Fortnite.

Disney said the partnership will see it work together with Epic to create new games using its intellectual property, including Disney, Pixar, Marvel, Star Wars and Avatar.

The company also said it would launch   an ESPN streaming service in 2025; stream an exclusive version of musician Taylor Swift's Eras Tour movie on Disney+; and release a sequel to hit "Moana" this year.

Disney's earnings per share for the first quarter came in at $1.22 adjusted, versus a forecast of 99 cents, despite revenue missing estimates and remaining roughly flat year on year. The company also announced a dividend of 45 cents a share, payable in July, which is 50% higher than its January payout.

Disney lost customers on streaming platform Disney+, but revenue was higher due to a hike in subscription costs. The company also updated investors on its plan to cut costs by at least $7.5 billion by the end of fiscal 2024, and forecast earnings per share for the year of around $4.60.

The results show stable revenue and effective cost management, according to Ben Barringer, technology analyst at investment manager Quilter Cheviot. The Epic Games partnership could prove fruitful but is likely to be a "slow burn," he said in a note.

"Disney anticipates modest revenue growth while maintaining a focus on cost discipline to ensure returns for shareholders. This strategy will garner support from its activist shareholders, despite ongoing challenges in the Parks business and a continued decline in linear television," he added.

Disney and Iger have been under pressure from activist investor Nelson Peltz to improve results. Peltz's investment firm told CNBC in a statement Wednesday, "We saw this movie last year, and we didn't like the ending."

What Disney's $1.5 billion stake in 'Fortnite' maker Epic Games means for both firms

— CNBC's Sarah Whitten and Alex Sherman contributed to this story.

comscore

COMMENTS

  1. Disney Business Model

    A brief history of Disney. Walt Disney made a cartoon in Kansas City about a little girl in a cartoon world called Alice's Wonderland. He arrived in California in the summer of 1923 and contracted a distributor named M.J. Winkler to distribute the "Alice Comedies" on October 16, 1923, and that date became the start of the Disney Company.. The company had Walt Disney and his brother Roy ...

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    In a memo recently released to company employees, Bob Chapek, CEO of The Walt Disney Company, outlined three strategic pillars that will guide the company in 2022 and beyond.

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    The Walt Disney Company This past year was a challenging one for all of us. The ... hard to meet our 2020 target to reduce net greenhouse gas emissions by 50% relative to total 2012 baseline levels, and ... towards a DTC-first business model, our CSR disclosure strategy evolved as well to better align with our current

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  17. The Walt Disney Company (DIS): Business Model Canvas

    Conclusion In conclusion, The Walt Disney Company has a robust business model that has kept it operating and expanding over the years. Its key partners and suppliers have played a crucial role in enabling it to produce high-quality content, products, and services that resonate with its customers. The company's revenue streams from its ...

  18. Who Are Walt Disney's Main Competitors?

    Disney's Business Model . ... which was not the case for all Disney locations in the fourth quarter of 2020. As noted above, Disney reported revenue of $16.55 billion for its Parks, Experiences ...

  19. Disney's Digital Transformation Story

    Digital Transformation Stories: Disney. DIGITAL TRANSFORMATION. July 13 2020. Disney+ launched Nov 2019 by the animation giant is one of the latest examples of digitally transforming a business to embrace emerging tech and create memorable customer experiences. Studying their case can serve as an inspiration to many companies.

  20. Disney Business Model

    The Disney net profit is $130 billion in 2020. Wandering how Disney is earning billions of dollars? Yes!!! Let's have a look.

  21. PDF Disney business model research

    According to Zhong Yiming (2016), Disney's business model consists of three main aspects: first, carefully conceived themes and simulated scenarios; second, attention to customer experience and enhanced interactions; and third, the creation of realistic scenarios to fully satisfy the experience [5].

  22. PDF FOR IMMEDIATE RELEASE November 12, 2020 FOURTH QUARTER AND FULL YEAR

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