Disney is almost certainly the world's most widely known and best-trusted entertainment brand. After years of ailing performance following the death of its founder, it found a whole new lease of life in the 1980s by reinventing the concept of the animated family movie. The huge popular success of 'The Little Mermaid', 'The Lion King' and others encouraged the group to spread its wings into other areas; a key development was the takeover of TV and radio group Capital Cities/ABC to create one of the world's biggest media conglomerates. But by the end of the 1990s a good deal of the shine had come off the company's prestige as the house of mouse was rocked by management rows and lacklustre performance at both its core movies division and the ABC Television Network. Years of rumbling discontent culminated in a rift in the group's board, followed by an unexpected (but unsuccessful) takeover bid from cable giant Comcast. Peace was finally restored in 2005 when divisive CEO Michael Eisner agreed to step down in favour of his deputy Bob Iger. Performance continued to be mercurial for a few years, buffeted by recessionary forces, declines in DVD sales, and several under-performing movie releases. In fact, the group's most consistently profitable subsidiary for several years was not its high-profile movies, parks or ABC divisions but top-rated cable sports network ESPN. Disney really got into its stride again with the takeover of Marvel and the astonishing success of the various movies inspired by its diverse collection of superheroes. In an even more startling move, it announced at the end of 2017 a deal to acquire most of entertainment rival 21st Century Fox for what was finally a price tag of $71.3bn in stock and debt. The group reported another year of record revenues for the year to Sept 2019. Group revenues hit new highs of $69.6bn, though net income sliped back to $11.6bn. Since becoming CEO in 2005, Bob Iger led the aggressive expansion of Disney's entertainment portfolio through acquisitions of not just Marvel and 20th Century Fox but also Pixar animation and 'Star Wars' owner Lucasfilm. As a result, he became unquestionably the most powerful figure in the global entertainment industry. After years of postponing his departure, Iger finally moved towards the exit in 2020 with the elevation of Bob Chapek to group CEO. He remains executive chairman. However, 2020 also saw the group's fortunes hammered by the impact of the Covid pandemic on two of its biggest businesses, parks and movies. A silver lining was the pandemic-inspired surge in subscriptions to newly launched streaming service Disney+. Take-up has been exceptionally strong, with subscribers topping 116m in its first 20 months. As of July 2021, Disney+ was available in 61 countries, with more markets set to open every month. Yet this wasn't enough to prevent a dent in revenues, which fell back to $65.4bn for the year to Sept 2020, and a net loss for the year of $2.8bn.
Capsule checked 13th January 2021
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Historical profile information for Walt Disney
Marketer Moves 19th Jul 2021: Disney's EVP of corporate communications to depart early next year. See Marketer Moves (members only).
Adbrands Daily Update 10th Mar 2021: Disney+ topped 100m subscribers in February, announced the company, an extraordinary achievement in just 16 months. That's already almost half the total served by global rival Netflix, and Disney says it remains on-course to hits its target of 260m subscribers by 2024. At the same time, Disney merged its under-performing ESPN+ service into general entertainment streamer Hulu. ESPN+ will still operate as an optional paid-for service, but on the Hulu platform.
Adbrands Daily Update 13th Nov 2020: Disney+ was a much-needed ray of sunshine in an otherwise weak set of 4Q financials for Walt Disney, which has had two of its biggest businesses - parks and movies - hammered by the Covid pandemic. "The real bright spot has been our direct-to-consumer (DTC) business, which is key to the future of our company," said CEO Bob Chapek this week, "and on this anniversary of the launch of Disney+ we're pleased to report that, as of the end of the fourth quarter, the service had more than 73m paid subscribers – far surpassing our expectations in just its first year." A near-quarter decline in the final quarter to Sept reduced full year revenues by 6% to $65.4bn, and the group reported a full year loss of $2.8bn. However, performance in what is now the DTC & International division soared. Full year revenues of almost $17bn made it the group's second biggest business behind media networks, even if it was still operating at a loss as a result of start-up costs. Yet media networks - ABC, ESPN and other cable channels - remained the engine of the group in this troubled year, accounting for 43% of revenues and more than three-quarters of operating profits.
Adbrands Daily Update 13th Oct 2020: Disney announced a new operational structure that looks set to move streaming services to the heart of its entertainment offering. Its existing content operations are realigned as three separate units: Studios, under Alan Horn and Alan Bergman; Sports, under James Pitaro; and General Entertainment, under Peter Rice. These units will focus purely on content creation, irrespective of media channels. A separate new division of Media & Entertainment Distribution will oversee all commercial operations, including ad sales and channel distribution. It is in effect this division, to be headed by Kareem Daniel, that will decide where any particular film or entertainment series will be placed. It will also oversee the group's Disney+, Hulu, ESPN+ and other streaming services. "Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it," commented new CEO Bob Chapek. "Our creative teams will concentrate on what they do best - making world-class, franchise-based content - while our newly centralised global distribution team will focus on delivering and monetising that content in the most optimal way across all platforms." Disney's main remaining division of Parks, Experiences & Products will continue to operate separately.
Adbrands Daily Update 26th Feb 2020: Bob Iger stepped down as CEO of Walt Disney with immediate effect, but will remain executive chairman. Instead, the group named Bob Chapek, previously head of its biggest division Parks & Products, as CEO. The suddenness of the announcement was a surprise, even within Disney, but the group is long overdue to name a successor to Iger. The long-serving CEO has postponed his departure on no fewer than four occasions, most recently last year, citing the complications of bedding down the Fox assets and launching Disney+. Yet the elevation of Chapek - a 27-year Disney veteran - still leaves plenty of room for Iger. "The company has gotten larger and more complex," he told analysts this week. "I should be spending as much time as possible on the creative side of our businesses." His new contract runs until Dec 2021. In his 14 years as CEO, Iger has wholly transformed the group, not least through the acquisitions of Pixar, Marvel, Lucasfilm and Fox. However, in that time, several previous contenders for the top job have departed, fearing they would never get a chance to become CEO. Chapek has long been seen as another such contender. The abrupt nature of this appointment, without any forewarning, might suggest that there were fears within the board that he too might be tempted away elsewhere.
Adbrands Daily Update 14th Nov 2019: A day after the official launch of its Disney+ streaming service, Walt Disney said it had already signed up in excess of 10m subscribers. On the face of it, that's an exceptionally strong start, but Disney had been running discounted promotional offers for three months ahead of the launch, and has agreed a partnership with Verizon to offer the telecoms group's customers their first year free of charge. As many as 17m Verizon customers are eligible for that deal; neither group has said how many have already signed up. Disney has itself said it aims to sign up between 60m and 90m subscriber worldwide by 2024. Disney's share price touched record highs of just under $150 on the back of its recent strong financial performance and the Disney+ launch.
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