This Formula Works – Disney (DIS) CEO

The Walt Disney Company (DIS) Chairman and Chief Executive Officer Bob Iger spoke with FOX Business Network (FBN) about the disappointing results of The Lone Ranger, the success of the Disney Channel brand, and the upcoming Infinity launch. Regarding the Lone Ranger box office flop, Iger said their tent pole film strategy is “a wise bet for this company” and that “from time to time, we have disappointing results, The Lone Ranger is certainly one of those, but we aren’t going to alter our strategy.” He went on to discuss Disney Channel’s non-traditional advertising model, saying “every once in a while we’ve kicked around the notion of selling more ads, or putting more ads on, but it never feels quite right to us,” despite it being a possible multiple million dollar revenue opportunity. Regarding the upcoming Disney Infinity gaming launch, Iger shared that the company has had its share of “fits and starts in this business and we think we are due for a hit. And we believe Infinity is that hit.”

On Disney’s tent pole business strategy and the $190 million loss of the Lone Ranger:

“We have a choice. It’s our decision to make tent pole films. We don’t necessarily have to, but we think it’s for the most part a wise bet for this company. First of all you’ve got an incredibly crowded marketplace, very very competitive not only for motion pictures but for people’s entertainment time, for people’s entertainment spend. And there are so many messages that the public is being bombarded that we actually feel that when you take a high quality branded film, you invest a lot in it, both the creative entities that make the film and the marketing of it, and what goes onto the screen, that it’s got a better shot for the most part of rising above the den and attracting an audience is significant. And yes, these tent pole films as you mention do have for this company added value in that when they succeed we can leverage that success across so many businesses. Our theme park is one great example, but certainly our consumer products business and television and games and publishing and so on. So, we don’t second guess out tent pole strategy at all. From time to time, we have disappointing results, The Lone Ranger is certainly one of those but we aren’t going to alter our strategy.”

On the success of the Disney Channel:

“You are right to point out that the Disney channel is an incredibly important launch pad. We have over than 100 of Disney Channels around the world and not only do they create a lot of great original programming, not just here in the US for export around the world, but we create a lot of original programming in markets around the world. but we also create things like Teen Beach Movie which is in a way akin to what we did with the great High School Musical franchise that was created a few ago. These are made for television movies essentially, but they kind of transcend that form, that art form because they become not only so popular, but quickly a part of a culture. And we’re pretty excited about the results from Teen Beach Movie, our second highest rated Disney Channel film of all time.”

On Disney Jr. and the Sophia the First franchise:

“Yes, Sophia the First is part of what we call Disney Jr. which is just blazing. It’s taken off. We’ve launched it as its own channel in multiple markets, including here in the US. And it’s been unbelievably successful.”

On whether there is a formula for every character:

“Well it’s a different formula for each character in many ways, but what you have to start out with is a great character and you got to put that character in great stories. Unless you have that, you can’t do the kind of things that you’ve cited that we’ve done with Sophia the First and so many other franchises. But when we tell a great story like Sophia the First and create a great character, or a world that people just love to be in, then the success can be enormous globally across so many platforms. It’s a very interesting world today for content creators and for intellectual property because technology is offering us, not only new ways to create things but so many new ways to reach people and so many new ways for people to reach us. And explore and enjoy this great intellectual property. It’s one of the most exciting times I think that’s ever existed in media and I am only sorry that I am not 40 years younger to enjoy it a little bit more.”

On possible revenue lost due to Disney Channel’s non-traditional advertising model:

“I’ve never seen an estimate. The Disney Channel formula works not only for us but our audience and for our distributors. We get paid a subscription fee that takes into account the fact that we don’t sell adds, so it’s a slight premium. And it obviously is something that parents like yourself have enjoyed because it doesn’t have all those commercial interruptions. We think that formula works. Every once in a while we’ve kicked around the notion of selling more ads, or putting more ads on but it never feels quite right to us because if it ain’t broke, you know, don’t try to fix it. And this certainly isn’t broken…There is an exclusive sponsor in a way to the Disney Channel in the US and that’s Disney, and we like that position.”

On the new Disney Infinity platform:

“It’s a very complicated business not only a lot of competition but technology is changing behavior right before our eyes. We’ve seen in the last five years just a stunning migration from the console space to the mobile space where the mobile games platform of today really have become the primary games platform. It doesn’t mean the console can’t be popular and successful from a bottom line, but it’s definitely a different world. And we’ve had our, call it, fits and starts in this business and we think we are due for a hit. And we believe Infinity is that hit. This is a game that will be across platforms, meaning all the big consoles from the Wii to the Xbox and PlayStation and on mobile and iOS. It’s going to launch on August 18th pretty much across the board, it may take a few days to get on the iOS platform after that. And we really believe in this mostly because we think it’s great game play for the consumer. First of all it creates really interesting worlds, but it’s the first time you’ll be able to take Disney characters and mash them up, so to speak, or put them together…And it’s designed because that’s how kids play.”

On reviving Mickey Mouse:

“Mickey Mouse was created as everybody knows by Walt Disney and was debuted in 1928 which is incredible when you think that 85 years ago this character was created and today that character is the #1 character in the world. Which is just incredible. And we aim to continue to keep Mickey front and center and as popular and as beloved as when Walt when he created him as Steamboat Willie in 1928. What we’ve done is we’ve gone to some of our great animation artists, this case in Disney Television, and we gave them a crack at portraying Mickey in new ways, slightly different artistically and some new worlds. And telling stories that are short form, because today short form is really short. And we’re putting them out, we’re making 20 originals I believe, and we’re putting them out both online and on the Disney Channel and they have already become incredibly popular.”

Courtesy of Fox Business Network

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