Walt Disney Success Story 3z246u

Presented by: Jishant Sapra

The Education of Walt Disney • Born in Chicago in 1901 • Enrolled in Kansas City Art Institute at age 14 • “Iwerks-Disney Commercial Artists” formed with friend in 1920, company went bankrupt in 1923 • Moved to Hollywood founded Disney Brothers Cartoon Studio • Developed series, Oswald the Lucky Rabbit, with brother Roy but did not obtain copyright for Oswald • Universal Pictures retained copyright which resulted in a loss revenue and his staff

Early History • Walt Disney produces Steamboat Willie on his own

• 1928 Mickey Mouse is born • Company is reincorporated as Walt Disney Productions in 1929 • 1932 Disney received Academy Award for creation of Mickey Mouse

• 1935 Mickey Mouse is filmed in color • Disney launched spin-offs from Mickey Mouse that include: Donald Duck, Goofy and Pluto

Other Key Dates •

1937: Snow White and the Seven Dwarfs, Disney's first full-length animated film, debuts.

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1940: Pinocchio and Fantasia released.

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1955: The Mickey Mouse Club debuts; Disneyland opens in Anaheim, California.

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1966: Walt Disney dies of lung cancer.

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1971: Walt Disney World opens near Orlando, Florida; Roy O. Disney dies.

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1982: EPCOT Center opens on the grounds of Walt Disney World

Disney’s Growing Entertainment Empire •

1989: Disney-MGM Studios Theme Park opens near Orlando

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1992: Euro Disney (later named Disneyland Paris) opens.

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1996: Disney acquires television station Capital Cities/ABC for $19 billion; Radio Disney debuts.

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1998: Animal Kingdom opens in Walt Disney World, Florida.

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1999: Disney Cruise Line begins operations with the Disney Magic

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2001: Disney's California Adventure opens next to Disneyland; Disney acquires Fox Family Worldwide for $5.3 billion.

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2003: Roy E. Disney--son of Roy O. Disney, last of the founding family and Stanley Gold quit the Disney board and starts Save Disney.com in an attempt to oust CEO Michael Eisner.

Current Structure and Corporate Strategy • Mission Statement: The Walt Disney Company's objective is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products.

The Walt Disney Corporate Structure • CEO ROBERT A. IGER – PRESIDENT AND CEO OF DISNEY, INC.-2005 succeeded Michael Eisner Business Units: • Studio Entertainment • Consumer Products • Parks and Resorts • Media Networks • Internet Entertainment

Source: The Walt Disney Company Annual Report

Corporate Responsibility Robert A. Iger: “While there's always room for improvement, we seek to be a good corporate citizen and hope to be as ired for the way we do business as for the quality of the family entertainment we create.” Focus Area

Objective

Children & Family

We strive to the well-being of children and families.

Content & Products

We seek to create content and products responsibly.

Environment

We work to embed good environmental stewardship in the Company’s decision-making process from start to finish.

Community

We aim to be a positive and productive member of the Communities in which we live and work.

Workplaces

We strive to foster safe, inclusive and respectful workplaces Wherever we do business and wherever our products are made.

DISNEY Topics: Miramax Films  ACQUISITION IN 1993 FOR $80 MILLION  CURRENTLY IN NEGOTIATIONS SELLING AT BETWEEN $625- 700 MILLION  AWARD WINNING FILM LIBRARY INCLUDES – NO COUNTRY FOR OLD MEN & PULP-FICTION

DISNEY Topics: MARVEL

GROSS BOX OFFICE SHARE

PROJECTED GROSS BOX OFFICE SHARE

DISNEY, 13% MGM, 8%

MGM, 8% GE, 9%

GE, 10% NEWS CORP, 13%

SONY, 17%

SONY, 18%

VIACOM, 16%

DISNEY, 17%

TIME WARNER, 22%

VIACOM, 15%

NEWS CORP, 12%

TIME WARNER, 22%

DISNEY Topics: Social Network Website TWITTER • ON-LINE MARKETING- 100 MILLION S • HOLLYWOOD AD SPENDING CUT BY 8% 2009

• “ANY WAY TO GET THE WORD OUT IN AN ERA OF STRETCHED BUDGETS” • NEW MARKETING CHIEF

SWOT Analysis Strengths • Diversification of their products and services-produces balance revenue streams: Revenues FY 2009

(in Millions)

% of Revenue

Media Networks

$16,209

45%

Park and Resorts Studio Entertainment Consumer Products

$10,667

30%

$6,136

17%

$2,425

7%

Interactive Media Total

$712 $36,149

2%

• Well known characters • Widespread cable networks • Strong brand name-ranked 9th in top 100 brand names

SWOT Analysis Weaknesses • Weak performance of studio entertainment – Produced failures such as Fantasia 2000, 102 Dalmatians and Treasure Plant

• Overdependence on the North American markets – 75% of revenue is derived from North America market – Little presence in emerging Asian Markets; ed for only 6.7% of company's revenues

SWOT Analysis Opportunities • Acquisitions to strengthen their position in the market – Jetix Europe-has programming geared toward kids 6-14, broadcasts in 58 countries – Club Penguin-adds to online assets

• Improving presence in emerging Indian and Asian markets • Agreement with DreamWorks to distribute six films a year • Positive market outlook for the global media

SWOT Analysis Threats • Intense competition in each business line: – Media- CBS and Fox Broadcasting – Parks and Resorts-Xanterra Parks and Resorts • Piracy in the entertainment industry • Regulatory risks- must comply with FCC regulations, which can hinder future cash flow • "Lagging Economy“ • New technology compromises ability to protect intellectual property

Academy Awards •

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Walt Disney holds the record for both the most Academy Award nominations (59) and the number of Oscars awarded (22). He also earned four honorary Oscars. His last competitive Academy Award was posthumous. 1932: Best Short Subject, Cartoons: Flowers and Trees (1932) 1932: Honorary Award for creation of Mickey Mouse. 1934: Best Short Subject, Cartoons: Three Little Pigs (1933) 1935: Best Short Subject, Cartoons: The Tortoise and the Hare (1934) 1936: Best Short Subject, Cartoons: Three Orphan Kittens (1935) 1937: Best Short Subject, Cartoons: The Country Cousin (1936) 1938: Best Short Subject, Cartoons: The Old Mill (1937) 1939: Best Short Subject, Cartoons: Ferdinand the Bull (1938) 1939: Honorary Award for Snow White and the Seven Dwarfs (1937) The citation read, "For Snow White and the Seven Dwarfs, recognized as a significant screen innovation which has charmed millions and pioneered a great new entertainment field." (The award, unique in the history of the Oscars, is one large statuette and seven miniature statuettes.) 1940: Best Short Subject, Cartoons: Ugly Duckling (1939)

Financial Analysis: Stock Price • Traded on the NYSE under the ticker DIS • Current stock price: 37.65 • Industry leader in market capitalization: 72.85B • Beta of 1.21 indicates stock is less volatile than competitors

Walt Disney (DIS) News Corporation (NSWA) Time Warner Inc. (TWX) Industry Market Capitalization Beta

71.45B 1.21

40.43B 1.58

38.05B 1.31

2.87B

Financial Analysis: Income Profit Ratios • Highest net income • In good position with a ROA of 5.29% • Despite recession still a profitable company

Walt Disney (DIS)

News Corporation Time Warner (NSWA) Inc. (TWX)

Net Income

3.31B

-3.37B

2.03B

Return on Assets

5.29%

4.74%

3.54%

Revenue

36.29B

30.93B

25.78B

Conclusion •

As the company grew, Disney diversified production beyond cartoons and animated movies. Treasure Island, released in 1950, was the studio’s first live-action film, and the company formed Buena Vista Distribution a few years later. With its own in-house distribution company, Disney could continue to churn out movies while significantly saving on distribution costs. Live-action hits such as Swiss Family Robinson in 1960 and Mary Poppins in 1964 followed. Disney's TV debut came around the same time as Treasure Island, with the special One Hour in Wonderland. The popular Mickey Mouse Club debuted as a TV series in 1955.

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But it was another TV program that began in 1954, called Disneyland, that showed Walt Disney had even bigger plans for the company. A few years earlier, Disney established WED Enterprises as a separate company and began drawing up plans for Disneyland, a giant theme park. Because the park was technically part of a separate corporation, Disney was able to develop it in secret, worrying about how shareholders would react. Disneyland opened in 1955 as a theme park unlike any other the world had seen.

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Disney employed a unique strategy to make the theme park quickly successful. He solicited several corporate sponsorships to subsidize costs, and outsourced food and merchandise within the park. Once Disneyland was earning revenue, the company repurchased those rights and kept the revenue internally. Plans for a second park, which ultimately became Walt Disney World, began with the acquisition of land in Florida in the 1960s. This second park would contain Disney's vision of what the future urban community would look like; he called it the "Experimental Prototype Community of Tomorrow", now commonly known as Epcot Center.