BU481 Lecture Notes - Lecture 18: Hulu, 18 Months, Travel Agency
BU481
Disney Case
Pre-Lecture Notes
• By end of 2000 revenue 1.65B => 25B & net earnings 0.1B => 1.2B (27% return to shareholders)
• He had a growth target of 20% (ROE from 20% to 10% in 1999 due to heavy investment)
o Profits in 2000 rebounded from a 28% decline in 1999
• Ran company as a flat nonhierarchical org – no titles
• $$ in full-length feature films (Snow White – highest grossing)
• Goal of 2 feature films/year + several shorts
• Made it through the war – even made films for it
• Walt Disney Music Company
• Buea Vista Distriutio to eliiate distriutio fees sae 1/3 of a fil’s gross reeues
• Aoided paig eoritat salaries deelopig the studio’s o pool of talet
• Disney parks a major risk – exploited corporate sponsorship
o Also licensed food and merchandising concessions
• Philosophy to create universal timeless family entertainment
• Importance on family life – oriented to fostering an experience that families could enjoy
together
o Aimed for whole family not just kids
• Absolute control over cartoon characters unlike actors
• Grossed $139M from Disney world and Epcot w 11M visitors in the 1st year
• In-house travel company
• Japan Disney – 10% gate receipts, 5% other sales, and ongoing consulting fees
• Investor ($365M)
• New CEO Eisner – return on stockholder equity aim exceeding 20%
o Build Disney brand while preserving corporate values (quality, creativity,
entrepreneurship, and teamwork)
• DisneyU – 3 day training
• aagig reatiit = ost distit orporate skill
• Shift to movies and TV
• Animation every 12-18 months rather than 4-5 years
• Invested $30M in computer animated production system that digitized the animation process
(no need for animators to draw each frame by hand)
• Promotional tie-ins with other brands
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