Disney's Dilemma: The Mouse That Became Mundane
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Chapter 1: The Core Issue
Disney's challenges are surprisingly straightforward: they've lost their spark. While management may frequently change, the underlying issue lies in the company's foundational beliefs.
Children today show little interest in comic books. When asked about characters, they might say, "What's that mouse doing? I saw him in my grandpa's old magazines." You may think, "Who cares about magazines? I never read them, but I love Disney."
Comic books are just the beginning. Fans who once read Iron Man comics experienced a thrill seeing him on-screen, especially when multiple beloved superheroes came together. The staggering success of Avengers films, grossing nearly $3 billion, isn't solely due to high-quality visual effects or directing; it's about the groundwork laid by authors and artists long ago. Each contributor nurtured that initial interest until it dwindled.
PS — 96% of my focus is on my newsletter, which boasts 750k views and 12k readers. If you'd like to join my network, here’s a link! It seems Mickey is ready to retire. The character is aging, and Disney's influence on Gen Z has diminished. This isn't entirely their fault; the technological revolution outpaced their strategies.
Today's youth, who once read comics, now create TikTok videos. Disney recognized that insufficient groundwork had been laid for future growth and began adjusting their business model.
Section 1.1: Revenue Streams
Consider this: how does Disney generate revenue? Is it through Disney Plus? The amusement parks? Understanding this is crucial for forecasting the company's future.
A significant portion of their income comes from "Parks, Experiences, and Products." This model isn't easily scalable, as serving millions simultaneously poses challenges. In contrast, Disney Plus has the potential to reach a broader audience.
Currently, much of their income relies on seeds that weren’t planted. For instance, a dedicated Star Wars fan like myself would relish interactions with Star Wars-themed attractions. Yet, those lacking that loyalty may not feel the same draw.
Take, for example, the release of The Force Awakens in 2015, a decade after the last Star Wars film. I saw it twice: first, with devoted fans who erupted in cheers as the iconic opening music played, creating an electrifying atmosphere. In stark contrast, my later viewing with casual friends was subdued; they simply munched popcorn and critiqued the film afterward.
Times have shifted, Walt. So, what exactly happened to Disney? Recently, their CIO, Diane Jurgens, departed. The pandemic severely impacted the company’s performance, prompting the board to call back former CEO Bob Iger, who had led the company for 15 years.
Section 1.2: A Football Club Analogy
This situation reminds me of football clubs: after one poor season, they often replace their coach, hoping for a quick return to form. Iger is undoubtedly an astute executive, but if Disney's issues are deeply rooted in their product offerings, even his expertise may not suffice.
Disney Plus is a scalable platform, yet its content still doesn't match competitors like Netflix or Apple TV+, unless you're a die-hard Disney fan. Sometimes, it's essential to take a step back.
Ultimately, a company must be profitable. Hence, the question of whether Disney is generating revenue is paramount. The truth is that while Disney is experiencing revenue growth, it may not meet Wall Street's lofty predictions.
Nevertheless, they are troubled by their stock price, which has hit a nine-year low. After researching analysts' forecasts, I found many predicting an uptick in Disney's stock, which I believe is feasible—if they adopt a bold strategy.
Chapter 2: The Path Forward
Kids have outgrown Disney's influence, and adults are aging out of their loyalty. Personally, I lack the time to watch every Marvel film, so my financial support is limited.
Iger now faces a compelling challenge in the business landscape. He must either cultivate new interests or reconsider the entire approach to recapture magic. Mickey Mouse has done it before; I hope to see it again.
Let's turn this into an engaging discussion. What are your thoughts on Disney? Is it nearing its end, or is this just a temporary hurdle? Share your opinions in the comments, and let's chat—let's do it for the mouse!
I'm Al, a business consultant based in Zurich, Switzerland. I’m dedicated to delivering value to you, the reader. Connect with me on various social media platforms if you're interested in my insights.
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