The recent five-year anniversary of David Bowie’s death reminded me of the breadth of his creativity and his ability to drive change by constantly re-inventing himself; it ensured his fan base remained not only engaged but grew as new audiences found something to attract them. It might be a bit of a stretch, but I can see a similarity between Bowie and Walt Disney, the creator of Mickey Mouse and founder of the Disney empire.
Bowie started out as a youngster with an acoustic guitar singing the nonsense song with his first solo release being ‘The Laughing Gnome’ and his career moved on through various alter egos including Major Tom, Ziggy Stardust, The Thin White Duke and various musical eras onto his final reflective masterpieces – ‘The Next Day’ and ‘Blackstar.’
Today, Disney is orchestrating a corporate restructuring that will change, not only its own content composition, but will be a significant feature in how the worldwide media sector transforms. Disney has driven change to ensure that as one sector of its business comes under fire as a result of the effects of the pandemic, other sectors respond - or are created – so that as a Group, it remains exceptionally successful.
The new Disney Digital Transformation Plan announced last month is focussed on its streaming channel Disney+ that was launched in March 2020. At launch, Disney forecast 60m – 90m subscribers by 2024; in a Covid environment they have exceeded this target and within eight months have 195m subscribers. Their new target for 2024 is north of 300m. They will hope to hit this target due to a phenomenal content budget. They spent about £2.6bn on productions in 2020 and aim to drive this up to $8bn by 2024. Alongside this spend by other Disney companies including ESPN and Hulu, they will be spending in the region of $14bn per annum on content – close to Netflix’s $17bn.
So what are they going to spend this money on? Well, the list is endless and reflects the depths of the brands owned by Disney – 10 Star Wars Series, 10 Marvel-branded productions plus 15 new original series and 15 feature films.
The news has been music to the ears of the Stock Market. Following the content budget announcement, Disney’s share value leapt by $38bn; their total capitalisation is now over $300bn.
Disney has come a long way since its formation in 1923 when the brothers Walt and Roy formed the company. Back then it produced short animation films, but in 1937 they released their first full length animation film, ‘Snow White and the Seven Dwarfs’. Other equally well-made, commercially successful animated films, followed, notably ‘Fantasia’, ‘Pinocchio’, ‘Dumbo’, ‘Bambi’, ‘Peter Pan’, ‘The Lady & the Tramp’, ‘Sleeping Beauty’, ‘One Hundred and One Dalmatians’ and ‘Jungle Book’. From the 1950s, live dramas and comedies geared to the family audience followed, firstly ‘Treasure Island’ in 1950 while the high point came in 1964 with the release of ‘Mary Poppins’; a multiple Oscar-winner.
Their Touchdown Picture division produced a whole batch of successful films from the 1980s catering for a wider audience, ‘Down and Out in Beverly Hills’, ‘Good Morning Vietnam’, ‘Dead Poets Society’, ‘Pretty Woman’ and ‘Sister Act’. Mainly led by their CEO Michael Eisner at the time they embarked on an acquisition trail that mopped up the Star Wars, Muppets and Marvel franchises, Pixar, National Geographic and the ABC broadcasting channel.
Alongside this, they have built and run 14 theme parks worldwide including Florida, California, Shanghai, Hong Kong and Paris, but in this area, Covid has had a devastating effect. They have had to suspend pay to 100,000 employees and pay off about 20,000. The losses for 2020 are well over $1bn.
Companies adverse to diversifying from their core business should take note of Disney’s ability to always look forward at changing markets and trends; as a result the punitive costs of Covid have been partly offset by the creation and growth of Disney+.
Perhaps the legendary sage of Omaha, Warren Buffet summed up change best when he said: ‘In a chronically leaking boat, energy devoted to changing vessel is more productive than energy devoted to patching leaks.’