The Walt Disney Studios

Transcription

1 The Walt Disney Studios For more than 85 years, The Walt Disney Studios has been the foundation on which The Walt Disney Company was built. After the success of the world s first full length feature animated film in 1937, Snow White and the Seven Dwarfs, Disney purchased land in Burbank, California where the company is currently headquartered. Today, the Studio brings quality movies, music and stage plays to consumers throughout the world. Company Background The Walt Disney Company is one of the most well know names in the world. The company, commonly stylized as Disney, is a multinational corporation that specializes in mass media. The startup of the company is marked on October 16, 1923, when Walt Disney signed a contract with M. J. Winkler to produce a series of Alice Comedies under the name The Disney Brothers Studio (Studio Services, 2013). After the demise of the Alice comedies, Disney developed an allcartoon series starring his first original character, Oswald the Lucky Rabbit, which was distributed by Winkler Pictures through Universal Pictures. In 1928, to recover from the loss of Oswald the Lucky Rabbit, Disney came up with idea of a mouse character named Mortimer while on a train headed to California drawing up a few simple drawings. The mouse was later renamed Mickey Mouse and starred in several Disney produced films. Disney's first sound film Steamboat Willie, a cartoon starring Mickey, was released on November 18, 1928 through Pat Powers' distribution company (Studio Services, 2013). The popularity of the Mickey Mouse series allowed Disney to plan for his first feature-length animation. Deciding to push the boundaries of animation even further, Disney began production of his first feature-length animated film in Taking three years to complete, Snow White and the Seven Dwarfs, premiered at the Carthay Circle Theatre in December 1937 and became highest-grossing film of that time by With the profits from the film, Disney financed the construction of a new 51-acre studio complex in Burbank, California. The new Walt Disney Studios, in which the company is headquartered to this day, was completed and open for business by the end of 1939 and made its first public offering in April the following year (Studio Services, 2013). As the organization grew to become The Walt Disney Company, encompassing various studios, theme parks, networks, and retail outlets along the way, The Walt Disney Studios continues to make the feature films that it has been known for creating over the decades. Products With its well-diversified amount of subsidiary studios, the company is considered the largest media conglomerate in the world. Feature films are released under the following banners: Walt Disney Studios Motion Pictures, Walt Disney Animation Studios, Pixar Animation Studios, DisneyNature, Marvel Studios, Touchstone Pictures, and Lucasfilm. Walt Disney Studios Divisions Founded in 1923, Walt Disney Animation Studios released one of the world s first full animated feature film in Over 70 years later, Walt Disney Animation Studios continues to honor its heritage through traditional and computer animated films that combine breathtaking artistry, masterful storytelling and groundbreaking technology (Walt Disney Studios, 2013). Its

2 popularity has sparked multiple opportunities including the establishment of the Disney retail stores and the creation of the Disney Princess franchise. Walt Disney Studios Motion Pictures made its first live action film, Treasure Island in Disney s collaborations with renowned artists and filmmakers has produced some of the most successful live-action family films in history, including Disney s Alice in Wonderland and the Pirates of the Caribbean films. The first film released under the Touchstone was Splash Since then, The Walt Disney Studios has released over 200 films from Touchstone Pictures, including Pretty Woman, Sister Act, Father of the Bride, and The Proposal (Walt Disney Studios, 2013). In 2009, a film distribution agreement was finalized with DreamWorks Studios, whose films including The Help and War Horse were since released via Touchstone. DisneyNature was launched on Earth Day 2008 with the mission of bringing the world s top nature filmmakers together to share a wide variety of wildlife stories on the big screen in order to engage, inspire, and entertain theatrical audiences everywhere. The division has produced four of the top five highest overall grossing feature-length nature films to date, with Chimpanzee garnering a record-breaking opening weekend for the genre. Conservation has been a key pillar of the label, and DisneyNature films empower the audience to help make a difference. Disney Subsidiaries Pixar Animation Studios, founded by Ed Catmull and Steve Jobs in 1986, is a film studio, currently owned by Walt Disney Studios. After much dispute between Pixar CEO Steve Jobs and Disney Studios CEO Michael Eisner, Disney, through an all stock buy deal, agreed to purchase Pixar in 2006 (Walt Disney Studios, 2013). Pixar itself is a world-renowned technical, creative, and production capabilities in the art of computer animation. Creator of some of the most successful and beloved animated films of all time, including the Toy Story and Finding Nemo, Pixar s 12 films have grossed over $7 billion dollars at the worldwide box office. Marvel Studios, a division of Marvel Entertainment, produces movies based on the world's most prominent and iconic comic book empire. Amongst the many animated, television, feature film and music releases, the studio has been involved in three Marvel-character film franchises that have each exceeded one billion dollars in North American revenue. Marvel Studios creates blockbuster film franchises which to date include Iron Man, The Incredible Hulk, Thor, Captain America: The First Avenger, and Marvel s The Avengers. Lucasfilm, is an American film and television production company that was founded by film maker George Lucas in The Walt Disney Company bought Lucasfilm for over $4 billion in 2012 (Walt Disney Studious, 2013). The studio is best known for its films, such as the Star Wars and Indiana Jones franchises, as well as its leadership in developing special effects, sound and computer animation for film. While Disney has expanded exponentially from its start as a small animation company, it is not invincible. The financial crisis in 2008 hit every industry, including film. At its beginning, the film industry seemed to be flourishing, movies becoming a refuge for a population burdened by

3 financial difficulties. Sales surged, but eventually, rising costs for studios and film production were causing the same layoffs and pay cuts that were seen in other industries. These costs were not as severe as other industries, and while some film producers, such as Miramax, felt the strain financially, Disney was able to prevail, and come out with several top ranking movies in the world (Ranges, 2008). Marketing Strategy The Walt Disney Company current situation on marketing takes into consideration the following characteristics: sell more to existing customers, expand their market place, continuous promotion, tracking business, and always improve or add to existing products. An important aspect of the company s marketing is that they know their seasons very well, and adapt marketing to it; always heavily investing in slow times, in order to have profit all year round. Moreover, Disney never stops; it embraces the change by always modifying, expanding, and creating new ways of brings the magic to customers, making their experience never be the same, and making them want to experience it again. Competitors of Disney are News Corporation, Viacom, NBCUniversal and Times Warner (Mattera, 2013). They compete with Disney in all the five branches. However, Disney uses marketing more focused in the family, which calls for the parents, the ones that often has the power of purchase decision; while the others call customers individually. Hence, Disney has a marketing advantage while appealing for not only children but also for the parents. But, as kids grow, establish their tastes, and have their decisions taken into consideration by the parents while purchasing, Disney might lose market for being associated to younger children and family; while its competitors gain advantage for that reason. Disney has been recently implementing its ideas through various channels. Not only television, but internet as well, have been the main means of advertising. Disney is taking actions to digitalized their content and to offer online interaction that develops customer loyalty, as children have more access to the network with the new technology (Heffes, 2002). As part of its marketing strategy, Disney believes in innovation to stay ahead of the competition and build business. With rapid advances in technology, the traditional media watching techniques have evolved. According to "emarketer," by 2011, 86 percent of Internet users in the U.S. will be downloading video content (Garnett, 2008). Disney's strategy is to connect with kids directly via storytelling utilizing multiple technologies. As Disney continued to grow and create more and more films, its audience evolved as well. Under all of the Studio s different banners, the films that are being produced are designed to reach a wider and wider audience. While the company continues to acquire top studios and production companies, it has paid a hefty sum for its additions. After Disney purchased Pixar in 2006, the films have grossed nearly $4 billion, not quite yet breaking even the purchase price of $7.4 billion. Profit has been made on the purchase for the company, however, through merchandise sales and park attractions, but for the Studio division, the films have not grossed their purchase price as of date (Mattera, 2013). With he success of the movies that have been released under Disney s ownership and the Studio s positive release schedule for the future, the financial benefits of the acquisition seem to be outweighing the costs. This seems to be the trend for th Studio s wholly-owned subsidiaries. After acquiring Marvel, the studio produced the 3rd

4 highest grossing film the world (Garnett, 2008). It s attempting to do it again with its recent purchase of Lucasfilm and announcement of a new Star Wars film. While the Studio s expansion has proved to be positive for the company, is it possible that its growth could be negative for the company s image? Disney executives don t believe so (Best & Lowney, 2009). Many of the divisions owned by the Studio are not marketed as Disney films. For instance, the only way one could tell a Touchstone film was produced by Walt Disney Studios is by the small Disney logo at the very end of the credits roll. But with the increased frequency of acquisitions, three in the last eight years alone, the company could be spreading itself too thin. Distribution Strategy Walt Disney Studios works with many suppliers to create and produce films worldwide. Through a strict selection process, Disney ensures that it works with companies that a quality and share the same corporate values as the organization. The distribution of Disney films is contracted inwardly. Through channels of the Walt Disney Company, the films are able to reach consumers all around the globe. Strategic Sourcing and Procurement The Company's Strategic Sourcing and Procurement organization works with all our Business Units and their suppliers across the globe to establish the best value for The Walt Disney Company. Strategic Sourcing provides opportunities for suppliers to partner with the Company to provide goods and services (Walt Disney Company, 2010). This partnering approach is designed to create a mutually beneficial relationship between the company s suppliers and Disney. Disney Sourcing Professionals seek out and contract with companies of all sizes and capabilities, from local and regional suppliers to those with a global reach. Disney continues to invest in technology to bring efficiencies to the procurement and accounts payable processes (James, 2013). It works with its suppliers to create electronic catalogs to maximize use of preferred suppliers products and services, enable electronic purchase order and invoice transactions, receive electronic payment, and utilize electronic bidding to reduce cycle time and increase consistency. The company has high standards for both its Sourcing Professionals and the suppliers it does business with. It utilizes a competitive process designed to obtain the optimum in quality, service and value. Sourcing Professionals who purchase products and services for the company are obligated to keep the company's interests first and buy without prejudice, seeking to obtain the maximum value for dollars spent. Criteria referenced when selecting suppliers includes, pricing, quality, on-time delivery, excellent communication, integrity, environmental protection, and technical competency (Walt Disney Company, 2010). The company believes that including diverse suppliers in its sourcing process provides it with the opportunity to develop the most innovative, highest quality, and most cost-effective business solutions. Through its exclusive selection procedure, Disney is dedicated to identifying and engaging suppliers that share its commitment to quality, service, cost and sustainability. Each division of the Studios has its own team for distribution. Based on the film s target audience, theatrical and d DVD are scheduled. Each title then distributes the rights to the theaters

5 and eventually the home movie retailers such as Wal-Mart, Target, and their own Disney stores, finally allow the films to be consumed by the public (Ranges, 2007). While the multiple branches of the Studios distributed films under their individual banners, the consumption of the films in digital and media can be handled by a separate division of the Walt Disney Company. Disney Media Distribution Disney Media Distribution (DMD) is responsible for the international distribution of The Walt Disney Company's branded and non-branded content to all platforms. The division distributes more than 30,000 hours of programming to over 1,300 platform partners across 240 territories worldwide with a content portfolio including Disney s feature films. Disney Media Distribution also oversees channel expansion and distribution worldwide for Disney-branded channels, such as Disney Channel, Disney XD and Disney Junior (Walt Disney Company, 2010). As technology changes the media landscape, impacting consumer behavior and traditional models, Disney Media Distribution continues to leverage opportunities through innovative partnerships with international broadcasters and platforms to extend its content, brand and reach (James, 2013). DMD develops innovative windowing strategies that enhance viewers' choice and experience in watching their favorite content. DMD has negotiated multi-year deals with video-on-demand, broadband, download services and mobile carriers to create multiple and convenient viewing opportunities and new revenue streams (Walt Disney Company, 2010). DMD continues to leverage the value of The Walt Disney Company's creative excellence to develop opportunities through innovative distribution, strategic windowing and the support of collaborative marketing synergies to create exceptional client and consumer options while optimizing revenue streams. Recommendations Despite the positive outlook the executives have, there has been a decline in the responses to classic Disney film. The new technologies that allow for bigger and better animations draw audiences to Pixar and Motion Picture films, but this technology has also led to an increase in legal issues regarding online distribution. Because of this, Disney attempts to keep with a changing, tech-driven market, but by purchasing more diverse subsidiaries, are they losing sight of the company s roots of creating family friendly films? And will this neglect tarnish the company s lighthearted and child-centric image? Or is the light image the cause of young people losing interest? In order to confront different changes in the environment, there are several options Disney Studios could follow. To combat the conflicting images of the multiple studios and films, Disney Studios could attempt to be more connected between the studios for their promotion. As of now, the Disney logo is seen at the end of the credits of all Disney distributed films. But the iconic Disney World castle film intro is exclusive to the Disney Animation Studios films. By integrating this blatant Disney signature, film watchers will be able to distinguished Disney owned films without question. This alone would create a more singular image for the Studio. This will help to unify the Disney Studio divisions, blending together films not previously marketed as Disney. While this may help preserve Disney s image from becoming more scattered, it also might deter new customers from enjoying Disney films. The current general image of Disney is children and family, and movies such as Armageddon and The Help which are distributed under Touchstone, are not

6 considered child friendly. This could, in turn, help change the Disney image from kid stuff to reputable films for all types of audiences. On the opposite end of the spectrum, Disney Studios could simply continue on the track they are currently on. The studio can continue to expand their studio collection, enabling their target market to grow. Instead of fighting the scattered nature of Disney s audience, embrace it (Reynolds, 2010). By not associating certain movie collections with others, the company can entertain multiple audiences without the Disney stigma bearing over a film s release. This separation would allow Disney to reach even broader audiences, growing its profits further. Currently, media has surrounded Disney s purchases, making it difficult to keep acquisitions out of the public eye. With the idea of growing secularly, Disney could not reveal their studio purchases or creations and instead market them as completely separate entities. By doing this, Disney will be able to preserve its family styled film products and simultaneously create pieces completely out of their target audience range. A completely different course would be not to appeal to a wider range geographically or demographically, but technologically. Disney Studios current distribution ends with contracts to play in theaters and eventually in retail outlets that sell movies. These films are available in several formats can be purchased in store and online. While Disney follows the technological changes of the times, it could change up its distribution strategy by investing in the innovation of the new technology. For instance, instead of premiering in a theater, the Studios could develop a method to successfully have a major online movie release. At a significantly lower price than a typical physical movie theater, an offering of an online premier can attract a larger market hare of the young, tech-savvy generation. A key audience for Disney is children and families. As children become more and more integrated into technology, appealing to them will take a more developed strategy for online distribution. If Disney Studios focuses more intently with staying ahead of this young generation, it can preserve the Disney name in its pure form and still turn significant profit. Finally, to create more cohesion among the divisions without actually forcing them to be under the same banner, Disney Studios could work more closely with its sister division: Disney Media Distribution. Currently, DMD is the main source of distribution for Disney networks and television and has only recently been allowed to distribute films. The range of networks under Disney media is diverse, but its distribution is managed singularly by the group. With hits such as Desperate Housewives, it is clear that DMD has proved to be a Disney assets (Reynolds, 2010). This success was mirrored in the films DMD distributed for the Disney Studios such as Toy Story 3 which grossed over 1 billion world wide. By collaborating with DMD, the channels used for distributing Disney movies will become more streamlined instead of the way it is currently broken up. While each new film release may not scream Disney, the company can have a tighter control on what is deemed Disney appropriate and be able to fairly market to its audience. Conclusion Since its creation, The Walt Disney Studios has been the foundation on which The Walt Disney Company was built. Though the Studio brings quality movies, music and stage plays to consumers throughout the world, its severe upstream and downstream integration may prove to

7 be controversial with the oncoming acquisitions of more and more studios. Trying to blend the cultures of the different studios has already started causing conflict around the studio s and Disney s image. By recognizing this potential conflict and managing it, Disney Studios can become more prosperous than ever before. References Best, J., & Lowney, K. S. (2009). The disadvantage of a good reputation: Disney as a Target for Social Problems Claims. Sociological Quarterly, 50(3), Garnett, T. (2008). Employees at Walt Disney Studios. Strategic Communication Management, 12(4), 6. Heffes, E. M. (2002). Reinvigorating Mickey and friends via new technology. Financial Executive, 18(3), James, J. (2013). The heart makes the mouse: Disney's approach to brand loyalty. Journal Of Brand Strategy, 2(1), Mattera, P. (2013). Walt Disney: corporate rap sheet. Corporate Research Project. Ranges T. (2013). To capture the force, be patient. Negotiation, 16(6), 1-4. Reynolds K. (2010). From beast to beauty: The culture makeover at Walt Disney. Strategic Direction, 23(9), 5-8. Studio Services. (2013). It all started with a mouse: a company overview. Retrieved from

8 Walt Disney Company. (2010). Our Business: Suppliers and Distribution. Retrieved from Disney Studios. Walt Disney Studios: About. Retrieved from