xxvii) Disney

An example of a company reinventing themselves is the Disney Empire during the tenure of the Disney brothers (Walt and Roy). They repeatedly used creativity and/or the latest technology to reinvent themselves. Many times when re-inventing themselves, they would put all their wealth at risk.

This empire was started by Walt Disney (story-teller, illustrator, creator & entrepreneur) and his brother Roy (manager, administrator, accountant & business manager). Despite their first company (Newman Laugh-O- Grams) going bankrupt, they restarted as Disney Brothers Studios. They had limited success with cartoons like Alice's Wonderland and Oswald the Rabbit. Their first real success in cartoons with the character Mickey Mouse (1928) in Steamboat Willie. They used synchronised sound to create the first post-produced sound cartoon. Later on other characters like Donald Duck, Goofy, Scrooge, Minnie, etc were introduced and gained popularity.

They continued to reinvent themselves by

- using technical developments like multi-playing cameras which allowed drawings on a piece of glass to be set various distances from the camera, creating an illusion of depth. The glass could be moved to create the impression of a camera passing through the scene . These new cameras and other technology that produced synchronised sound, full-colour three-strip Technicolour resulted in feature-length cartoons like Silly Symphony (1937), Snow White and the Seven Dwarfs (1937), Pinocchio (1940), Fantasia (1940), Dumbo (1941) and Bambi (1942). Snow White became the most successful motion picture (1938) and won an Honorary Academy Award. Using other technical developments produced the first full-length feature (Lady and the Tramp) in Cinemascope (1955); the first animated film (Sleeping Beauty) in Technirama 70 mm film (1959); first animated feature film (101 Dalmatians) using Xerox cels (1961).

- merchandising including colouring books and comics

- floated on the stock market (1940) as a way to attract finance rather than borrowing from banks

- they used technology to develop animated, live-action films including Cinderella (1950) and Mary Poppins (1964)

- Disney expanded into amusement parks by opening Disneyland (1955)

- started in television including programs like Walt Disney's Disneyland (1954) and the Mickey Mouse Club (1955). For television they produced a 5-part miniseries (Davy Crockett) which was very popular; worked with NASA on a program entitled "Man in Space" (1955)

- with the miniseries' theme song (the ballad of Davy Crockett) selling 10 million copies, they formed their own record production and distribution firm (Disneyland Records).

- they were also involved in planning the American National Exhibition in Moscow (1959); designed the opening, closing and medals ceremonies at the Winter Olympics (1960); Designed 4 exhibits at New York's World's Fair (1964), ie

"...for PepsiCo, who planned a tribute to UNICEF, Disney developed Its Small World, a boat ride with audio-animatronioc dolls depicting children of the world; Great Moments with Mr Lincoln containing an animatronic Abraham Lincoln giving excerpts from his speeches; Carousel of Progress promoting the importance of electricity; Ford's Magic Skyway portraying the progress of mankind. Elements of all 4 exhibits - principally concepts and technology - were reinstalled in Disneyland..."

Wikipedia 2019

- in 1965, they developed another theme park, Disney World. Its theme was around a new type of city (Experimental Prototype Community Of Tomorrow - EPCOT). In 2014, the Disney theme parks around the world had around 134 m visitors

- since Walt Disney's death in late 1966, the studios has continued to produce live-action films prolifically and abandoned animation until the late 1980s when they re-entered the field by producing The Little Mermaid. On the other hand, the organisation has been able to recreate the creativity levelof the early years when Walt Disney was alive.

The Changing Environment

Disney has dominated the entertainment industry for around a century. Starting in 1937 with Snow White and the 7 dwarfs (its first successful feature film and a family blockbuster). Then in 1954 they entered into TV with Disneyland, a series hosted by Walt Disney himself

"...Of the dozen films that were the largest worldwide box-office successes since 2010, Disney released eight..."

Derek Thompson 2018

Yet in more recent times, its traditional strengths are turning into weaknesses as it is threatened by technology, ie

i) cable TV (once its main money earner, has a declining membership, ie

"...since 2010, viewership of traditional TV has fallen 51% amongst Americans aged 12 to 24..."

Nielsen as quoted by Derek Thompson 2018)

ii) films (attendance at movie cinemas peaked in the 1940s and has declined ever since)

Streaming is the future. People are watching more videos on their smart phones, laptops and Internet connected TVs. Streamers like Netflix are threatening Disney's dominance.

To handle this changing situation, Disney has modified its business model from blockbusters as part of theatre-release to a proprietary streaming platform. Part of this involves

 i) acquired most of the assets of 20th Century Fox. As a result Disney
"...would own as much as 40% of the US movie and television industries..."
Derek Thompson 2018

 ii) started Disneyflix in 2019 to compete with Netflix

 iii) focuses on subscription model rather than ticket buyers; the lifetime value of subscriptions which are renewed automatically until actively cancelled was more profitable than the revenue from one-time ticket buyers to the cinemas

iv) creates original exclusive content

v) collects valuable personal data on its client base (this can be used to customise and personalise its services like videos, merchandise, theme parks, etc)

NB Disney is prepared to cannibalise its successful involvement in cable TV, movie theatres, etc to maximise benefits from new technology.

Rob Iger (CEO) has led Disney through these bold moves, and has acquired

- classics (realising the public's bottomless appetite for nostalgia and refurbished classics)

- successful organisations like Pixar, Marvel, Lucasfilms, etc (improves their revenue through expanded TV and film franchises)

"...Disneyflix won't just be Netflix with Star Wars movies - it would be Amazon with Star War pillowcases and Groupon for rides on Star Wars rollercoasters and Kayak for Star Wars suites at Disney hotels..."

Derek Thompson 2018

This is how Disney hopes to maintain its century-dominance of the entertainment industry.

 

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