Founded on 16th October 1923 by Walter and Roy O. Disney, in Burbank, California, Disney is the largest media and entertainment company in the world. The company has 195,000 employees onboard, operates in 45 countries and has an annual revenue of $55 billion. The company’s objective is to maximise its earnings and cash flow and allocate the capital towards growth initiatives to maximise long-term shareholder value.
Disney is the most recognisable brand in the world whether it comes to adults or children, it’s nostalgia for some while entertainment for others.
The company has identified that if it must sustain itself in the entertainment industry, it needs to constantly upgrade its operations and products. The strategy that the company emphasizes the most is its product development, the company has a history of reinventing itself and solving the pieces of innovation before any other company sees it. In the early stages, the company was known for its soundless one-reelers, then in 1928 the world was introduced to the timeless classic ‘Steamboat Willie’, it was the first animated show with an integrated sound recording.
The success of the show inspired the company to produce more content revolving around the idea. It was also the time when the company wanted to spread its leg in the full-length movie industry, as a result of this idea the company had to bear huge costs as they went 400% over budget and required more than 300 animators, artists, and assistants.
The company was lashed for its overspending by the investors, but the criticism didn’t last long. In 1937, the company released its first feature film, ‘Snow White and the Seven Dwarfs’, the movie became an instant hit and became the-then highest-grossing film of all time. Disney has survived a series of highs and lows since its founding, from the decline in the ’70s and ’80s to a robust comeback in the ’90s. Disney identified creativity as the key element for success in the entertainment industry.
Technology has been booming since the mid-20th century causing every industry is changing rapidly. This has been seen as an opportunity by some, while a total threat for others. Disney also had to take this opportunity before its competitors but how? A rather recent example would be the emergence of OTT platforms – the company launched the streaming giant Disney+, which is now streamed almost everywhere around the globe.
Innovation in the media and the entertainment industry has experienced exponential growth over the last decade. Disney CEO Robert Allen Iger
quoted ‘Innovate or die, there’s no innovation if you operate out of fear of the new or untested’. The major challenge for Disney was how it would create and come up with continual updates and innovations that could effectively compete with and even surpass other streaming giants like Netflix and Amazon Prime? The solution that they arrived at was if you cannot create then acquire.
The building blocks of Disney+ include Pixar, Marvel, Lucasfilm/ Star Wars, 21st Century Fox and National Geographic. These acquisitions were a reply to all the critics who underestimated the company for limited expansion. Now, Disney is not only the leader in animation and graphic content but also in content which is seen by all ages of people.
The company is highly focused on producing ‘quality’ content rather than making ‘quantity’ content. Instead of making 100s of content, they will produce 10 pieces of content but would ensure those 10 are of the highest quality.
As per the latest quarter, the company had generated a total revenue of 29 billion US dollars with theme parks, experiences and products segment an increase of 12 billion dollars from before. The company’s major source of revenue came from the media and entertainment industry which contributed to 40 per cent of the total revenue, parks and resorts were the second largest source of revenue for the company (the magic kingdom of the bay lake, Florida ranked first), the third was studio entertainment or Disney’s film business (which included blockbusters like Black Panther: Wakanda Forever, Doctor Strange in the Multiverse of Madness and Thor: Love and Thunder in 2022).
The acquiring of Marvel was one of the best moves and a great strategy for the company, as the majority of the revenues generated from the film’s business came from this subsidiary.
The company has also planned to expand in the business of real estate, the premises around Disney land could cultivate steady revenue streams for the company as the company rents out the surplus available land.
Disney’s strategy in expansionary and operational development is truly remarkable, the company has taken full advantage of the opportunities that were presented to it.
As Walt Disney had remarked, “If you can dream it, you can do it!”
Written by Pratham Khemka
Edited by Akanksha Choudhary