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Walt Future

In: Film and Music

Submitted By djsinflames
Words 7416
Pages 30
FUTURE STRATEGIES

Disney’s theme park strategy underscores the importance of vertical integration for the company as a means to exert total control not only over the individual segments of the media value chain, but also over the individual value chains of its business units. For example, by owning all elements of the theme park value chain, starting with travel agencies, over food and merchandising, to the accommodation of the parks’ visitors, Disney made sure that all possible revenue streams were channeled into the group without intermediary-related losses.
Despite its precarious financial situation, Disney further extended its vertical reach by investing in the development of a new cable venture, The Disney Channel, launched in 1983, which allowed the exploitation of Disney content on the additional distribution platform cable television. Disney also decided to vertically integrate into syndication in order to exploit further revenues by licensing the individual film rights of Disney’s by now extensive television content library to independent television stations.
The merger presented substantial benefits for both sides: Miramax gained guaranteed access to Disney’s national and international distribution network, and Disney could increase its content product diversity by securing content of the type that it lacked in its Disney, Touchstone and Hollywood Pictures output (Lyons, 2003). Through the Miramax acquisition Disney increased movie output from 18 films per year in 1988 to 68 new films in 1994.
Summary of Disney’s Corporate Strategy
Disney’s core competencies involve drawing upon new and classic entertainment brands through its film studios and content library, and exploiting them through ancillary assets. Animated films are an ideal product for the global media market. There are no royalties to pay stars, large cross-selling and cross-promotional

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