Disney case study
From a 1981 internal memo at Disney: “We have no obligation to make history. We
have no obligation to make art. We have no obligation to make a statement. To
make money is our only objective.” - Michael Eisner, Disney CEO (1984-2005). So if
its money Disney are after, need they fear - Disney is the largest media
conglomerate in the world in terms of revenue, in fact last year was a new revenue
record for the company who made an astonishing 42.278 billion. Disney was
founded on October 16, 1923 and now has over 150 million employees with Bob Iger
as the President of the company.
The Walt Disney Company operates as five primary units and segments:
1. The Walt Disney Studios, which includes the company's film, recording label,
and theatrical divisions
2. Parks and Resorts, featuring the company's theme parks, cruise line, and other
3. Disney Consumer Products, which produces toys, clothing, and other
merchandising based upon Disney-owned properties
4. Media Networks, which includes the company's television properties
5. Disney Interactive, which includes Disney's Internet, mobile, social media,
virtual worlds, and computer games operations.
Synergy (from the Greek syn-ergos, meaning working together) is the term used to
describe a situation where different entities cooperate advantageously for a final
outcome. Simply defined, it means that the whole is greater than the sum of its parts.
It’s the ‘strategy of synchronising and actively forging connections between directly
related areas of entertainment’.
Symbiosis is when different companies work together to promote a range of related
products e.g. Walt Disney pioneered symbiosis marketing techniques in the 1930s
by granting dozens of firms the right to use his Mickey Mouse character in products
and ads, and continued to market Disney media through licensing arrangements.
These products can help advertise the film itself and thus help to increase the film's
sales. For example, the Spider-Man films had toys of ‘webshooters’ and figures of
the characters made, CD soundtracks, video games, DVD’s and other
merchandising. Disney, more than any media giant is the master at figuring out “new
synergistic ways to acquire, slice, dice and merchandise content.” Its 1994 animated
film The Lion King generated over $1 billion in profit. It led to a highly profitable
Broadway show, a TV series and all sorts of media spin-offs. It also led to 186 items
of merchandising. Wall Street analysts estimate animated films in the hands of
media conglomerates on average generate four times more profit than their domestic
In business, horizontal integration is a strategy where a company creates or
acquires production units for outputs which are alike - either complementary or
competitive i.e. a company acquires competitors in the same industry doing the
same stage of production. For example, Disney's acquisitions of Marvel comics for
$4.2bn in 2009 and Lucasfilm (2012), the company behind the Star Wars films, for
$4.05bn (£2.5bn), from its chairman and founder George Lucas. In return, Disney
should again increase their market share. It’s still early days but so far the
investment seems to be gradually paying off like “Marvel’s The Avengers” was the
top-grossing film last year, with $1.5 billion in worldwide ticket sales, according to
Box Office Mojo (an industry researcher). Whilst “Iron Man 3” leads this year with
$1.2 billion in worldwide box office.
On the other hand, you have Pixar studios, bought by Disney for $7.4bn (£4.1bn) in
2006; The Disney-Pixar relationship between 1991 and 2006 illustrates the move
from outsourcing (the contracting out of a business process to a third-
party) to vertical integration (The merger with or acquisition of a company that
performs a different role in the same industry). Disney outsourced the production of
3D animated films to Pixar in 1991 because there was a lot of uncertainty around the
potential of 3D animation. At the time it was not clear whether 3D animated films
would be successful or at least as successful as 2D animated films. In addition, 2D
animation capabilities were far more likely than 3D animation capabilities to generate
a competitive advantage.
By 2006, vertical integration had become necessary for Disney because Pixar was
taking advantage of Disney’s dependence to constantly renegotiate the contract.
For instance, after the success of Toy Story (1995), Steve Jobs, who was chief
executive of Pixar at the time, threatened to end the relationship with Disney unless
the contract terms were adjusted in Pixar’s favour. Michael Eisner, chairman and
chief executive of Disney, eventually agreed to renegotiate the contract in favour of
Pixar in exchange for an extended duration. Moreover, the uncertainty surrounding
3D animation had disappeared and this film technique had become essential to the
competitive advantage of the animation film industry.
One of the main reasons Disney are so successful is because they use cross-media
convergence. For example, High School Musical the most successful
film that Disney Channel Original Movie (DCOM) ever produced, with a television
sequel High School Musical 2 and 3. It is the first Disney Channel Original Movie to
have a theatrical sequel. The film's soundtrack was the best-selling album in the
United States for 2006. In addition, there was a high school musical ice tour, book
series, video game, reality series. In fact the High School Musical: Encore
Edition DVD created a sales record when 1.2 million copies were sold in its first six
days, making it the fastest-selling television film of all time
Part of the reason Disney is so successful is because it knows how to appeal to a
wide age ranged audiences even when making ‘kids films’. For example, with Toy
Story 3 Pixar and Disney set out to target people in their twenties, who would have
seen the original Toy Story when they were younger), thereby giving their audience a
sense of loyalty in the brand so hopefully then they will encourage their children to
Disney use social media but not too much success for such a large company. It has
numerous different Twitter accounts (e.g. @Disney, @DisneyParks,
@DisneyPictures etc.), however it only has 3.4m people following @Disney on
Twitter while its Facebook account has 45m likes. However, it’s most enthusiastic
fans are of an age (under 13) in which they aren’t able to interact online which might
explain why its social media presence isn’t as impressive despite their efforts as their
YouTube account has only 88,000 subscribers.
Disney Vault adds to the company’s exclusive appeal - the "Disney Vault" is the term
used by Walt Disney Studios Home Entertainment for its policy of putting home
video releases of Walt Disney Animation Studios’ animated features on moratorium.
Each Disney film is available for purchase for a limited time, after which it is put "in
the vault" and not made available in stores for several years until it is once again
released. Therefore, Disney put added pressure on parents to buy DVD releases
within a given time. A side effect of the moratorium process is the fact that videos
and DVDs of Disney films placed on moratorium become collectibles, sold in stores
and at auction websites such as eBay for sums in excess of their original suggested
retail price. The practice also has made the Disney films a prime target for digital
Disney's earliest films were often marked in the past as racist and sexist stereotypes
so have they really moved on from the older classics like Peter Pan to newer films
like The Little Mermaid? Disney has moved away from some sexist and racist
tendencies, but preserved more than many think. There are a lot of examples to
choose from in the Disney vault.
The 1941 classic, Dumbo (which I grew up loving), has a particularly racist
foundation. The film is excessively light in its handling of southern racism. The crows
are extremely stereotypically black characters. Never mind that the lead crow's name
is Jim Crow (the Jim Crow laws were state and local laws in the United States
enacted between 1876 and 1965. They mandated de jure racial segregation in all
public facilities in Southern states of the former Confederacy, with, starting in 1890, a
"separate but equal" status for African Americans). However, the song "When I See
an Elephant Fly," contains heavy-use of southern black vernacular, including: "I'd be
done see'n about everything / when I see an elephant fly!"
The fact that the crows are the colour black and speak in a stereotypical manner
could only have reinforced stereotypes. In addition, with the "Song of
the Roustabouts," Disney features faceless black circus workers working while
singing, "We slave until we’re almost dead / We’re happy-hearted roustabout" and
"Keep on working / Stop that shirking / Pull that rope, you hairy ape."
A more recent example of one of Disney’s movies is 'The Princess and the Frog'
(2011) the film was a huge step towards inclusiveness and intersectionality in Disney
films by having a black princess named Tiana. However, there are still issues within
the film that many argue do more harm than good for much of the viewing public.
The most obvious of these issues is the fact that, despite Tiana being "obvious
phenotypically" black — meaning that her skin tone and other features have been
drawn to be "identifiably" black — her suitor, and later husband, Prince Naveen is
not. In fact, for half the movie, you don't even know where his home country,
Maldonia, is, nor can you place his accent. Some viewers believe that Disney would
not have made Naveen "identifiably" black because that would put a black male in a
position of power in their films.
For nine decades, not one of Disney's hit animations has had a woman sitting in the
director's chair – until now. When Frozen, its latest cartoon feature film, opens in the
UK later this month, it will make Disney history as Jennifer Lee, a screenwriter,
shares a directing credit with the animator Chris Buck. In addition to this, Frozen is
directed by The Simpsons' Lauren MacMullan, who will make company history by
being the first woman ever to have a solo directing credit on any feature-length
Disney cartoon. This is evidence that Disney is taking steps forward in the right
direction in regards to gender balance in the workplace.
Robert A. Iger is Chairman and Chief Executive Officer of The Walt Disney
Company. As Chairman and CEO, Mr. Iger focuses on three fundamental aspects:
generating the best creative content possible; fostering innovation and utilizing the
latest technology; and expanding into new markets around the world. Mr. Iger with
the acquisition of Pixar (2006), Marvel (2009), and Lucasfilm (2012), three of the
entertainment industry's greatest storytellers he has built on Disney's rich history of
unforgettable storytelling. Mr. Iger has embraced new technology by making Disney
an industry leader at the forefront of offering its creative content across new and