Walt Disney Company (DIS)

History and Background

Founded in 1923 by Walt and Roy Disney, The Walt Disney Company (Disney) started as a small animation studio and evolved into a global entertainment giant through innovation in film, theme parks, television, and streaming.

Core Business Areas

• Disney Entertainment: Focuses on film and television production, streaming services (Disney+, Hulu, ESPN+), and content distribution. Includes studios like Walt Disney Pictures, Pixar, Marvel Studios, Lucasfilm, 20th Century Studios, Searchlight Pictures.
• ESPN: Operates ESPN and ESPN2 which are leading global sports entertainment enterprises featuring multiple brands.
• Disney Parks, Experiences and Products: Encompasses theme parks and resorts (Walt Disney World, Disneyland, Disneyland Paris, etc.), cruise lines, and consumer products (toys, apparel, publishing).

Leadership and Structure

Robert Iger serves as the Chief Executive Officer. The company operates under a hierarchical structure with various executives overseeing different business segments, reporting to the CEO and the Board of Directors.

Key Offerings

• Disney+: Subscription video streaming service offering films and television programs. Competitors include Netflix (NFLX), Amazon Prime Video (AMZN), and Apple TV+ (AAPL). Revenue estimated at $9 billion for fiscal year 2023. Number of subscribers: approx 150 million.
• Theme Parks: Operates theme parks and resorts globally, generating substantial revenue through ticket sales, merchandise, and lodging. Competitors include Universal Studios (Comcast CMCSA) and Six Flags (SIX). Parks, Experiences and Products revenue was $32.25 billion in fiscal year 2023.
• ESPN: A leading provider of sports programming; revenue is generated through advertising, affiliate fees, and subscriptions. Competitors include Fox Sports (FOXA), CBS Sports (Paramount Global PARAA). ESPN revenue was estimated to be around $16.6 billion for fiscal year 2023.

Industry Overview

The entertainment industry is characterized by intense competition, rapid technological advancements (especially in streaming), and shifting consumer preferences. Consolidation and globalization are key trends.

Positioning

Disney holds a strong position in the industry due to its valuable intellectual property, brand recognition, and diversified business model. Disneyu2019s streaming services compete in a crowded market.

Total Addressable Market (TAM)

The global entertainment and media market is expected to reach over $2.5 trillion by 2026. Disney is positioned well in areas such as streaming, theme parks and content creation.

Key Competitors

• NFLX
• CMCSA
• PARA

Competitive Landscape

Disney possesses a distinct advantage through its vast collection of intellectual property, enabling it to offer exclusive and highly sought-after content. However, Netflix has more streaming subscribers and Comcast controls the NBC network and Universal Studios. Paramount controls the Paramount Network and Paramount Pictures.

21st Century Fox

• Year: 2019
• Acquisition Price (USD millions): 71300
• Strategic Rationale: Acquisition of 21st Century Fox brought valuable film and television assets, expanding Disney's content library and streaming capabilities.

Historical Growth: Disney experienced steady growth driven by box office hits, theme park expansion, and the launch of Disney+. Growth was impacted by the Covid-19 pandemic.

Future Projections: Analysts predict moderate growth in the near term, driven by streaming subscriber growth and theme park recovery. Long-term growth will depend on Disneyu2019s ability to create compelling content and navigate the evolving media landscape.

Recent Initiatives: Cost cutting measures announced by CEO Iger. Restructuring of its operating segments to reduce overhead and drive efficiencies. Significant investments in original content.

The Walt Disney Company is a strong brand and is still a household name. However, in recent times the company has been dealing with streaming profitability challenges and is still facing headwinds. Their theme parks are doing well but rely on a strong economy. The company needs to effectively manage costs and innovate in the streaming and content creation spaces to maintain its competitive edge in the entertainment industry.

Data Sources:

• Company Filings (10-K, 10-Q)
• Analyst Reports
• Industry Publications

Disclaimers:

This analysis is for informational purposes only and should not be considered investment advice. Market data is as of November 2023 and is subject to change.