Strategic management

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R E V I S E D : F E B R UA R Y 2 7, 2 0 2 0

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Professors Frank T. Rothaermel Noorein Inamdar, and David R. King prepared this case from public sources. This case is not intended to be used for any kind of endorsement, source of data, or depiction of efcient or inefcient management. All opinions expressed, and all errors and omissions, are entirely the authors. © by Rothaermel, Inamdar, and King 2020.

F R A N K T. RO T H A E R M E L

N O O R E I N I N A M DA R

DAV I D R . K I N G

The Walt Disney Company

It’s kind of fun to do the impossible.

– Walt Disney

Februar y 25, 2020, 4:15 am. Bob Chapek’s alar m goes of f and 10 minutes later he is r iding on his Peloton bicycle, while watching a new 3D computer- animated video with vir tual realit y headsets. After a quick shower, Bob Chapek summons his white Tesla Model X with dark tinted windows from the garage to let the car dr ive him on his 30-minute commute to Disney’s Burbank, CA , of f ice. W hile rela xing dur ing the car r ide, his thoughts tur n to the big announcement later this after noon, w ith him being named Disney’s new CEO, ef fective immediately. Employees, investors, and all of the other Disey stakeholders will have a lot of questions about his future vision for Disney. . .

With $60 billion in annual revenues in 2019, T he Walt Disney Company is one of the world’s larg- est media companies. A s a diversif ied media company, Disney is active in a wide ar ray of business activities, from movies to amusement parks as well as cable and broadcast television networks (A BC, ESPN, and others), cr uises, retailing, and streaming.1

T he New CEO will need to implement multiple strategic initiatives that were put in place by Bob Iger, his larger- than-life predecessor at Disney, who spent almost 50 years w ith the company, and thereof 15 years as CEO. Disney closed its $71.3 billion acquisition of 21st Centur y Fox’s enter- tainment assets, or its largest acquisition ever, in March 2019.2 A s par t of the Fox and other deals, Disney gained controlling ownership of Hulu, a streaming ser vice.3 Disney is also rolling out its own new streaming ser vice called Disney+ in November 2019, thus moving into the direct- to-consumer space. In September 2019, Apple announced is new streaming ser vices, Apple T V+. On the day of the Apple announcement, Iger resigned from Apple’s board of directors due to a conf lict of inter- ests.4 Iger also announced that Disney will pull most of its movies from Netf lix by 2020.5

Another challenge is managing the growing por tfolio in Disney’s Studio Enter tainment divi- sion, as it operates more than seven movie studios, including Walt Disney Pictures, Walt Disney Animation, Pixar, Mar vel, Lucasf ilm, 21st Centur y Fox , Fox , and Blue Sk y. A s a result, Disney has outlined plans for roughly a dozen movies each year through 2022.6

Dur ing Iger’s tenure as CEO, Disney has per for med well in ter ms of stock pr ice appreciation and f inancials (Exhibit 1 and Exhibit 2). Yet, Iger has delayed his retirement from Disney f ive times. Each time he has leveraged delaying retirement into higher pay, which in 2018 was $65 million;7

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The Walt Disney Company

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mak ing Iger one of the highest paid CEOs in cor porate Amer ica. W hat sur pr ised many, including Disney employees is that Iger’s announcement to indeed step down as CEO happened with no pr ior notice, and was made ef fective immediately. T he new CEO, Bob Chapek, has big shoes to f ill.

Strategic Leadership

T he phenomenal success of Disney is par tly attr ibuted to the leadership of three distinguished individuals : Walt Disney, Michael Eisner, and Rober t Iger. T he saga of all three leaders is ak in to Disney’s epic movies featur ing unsur mountable challenges, adventure, and f leeting victor ies. Each leader is recogni zed for providing a strong vision and strategic direction that enabled the company to adapt to unprecedented changes in the media and enter tainment industr y and grow into the colos - sus company it is today.

WALT DISNEY Walt Disney, the entrepreneur, animator, and f ilm producer, is viewed by many as the “icon of

Amer ican ingenuit y”8 who had the cor porate vision, values, and perseverance that led to the com- pany’s success as a media and enter tainment provider. In 1923, Walt moved to Los Angeles to work as a f ilm director and was unable to f ind a job. T hus, he joined forces with his brother Roy, and they founded Disney Brothers Car toon Studios. T he new entrant produced Alice in Wonderland and a ser ies of Alice comedies that lost popular it y by 1927. Walt worked with his old fr iend Ubbe Iwerks to create a new character Mor timer Mouse, later renamed Mickey Mouse, which revolutioni zed the car toon industr y. In 1928, Mickey made his screen debut in Steamboat Willie.9

In 1937, another major tur ning point for the Disney Company came with the release of the world’s f irst full-leng th animated car toon in Technicolor called Snow W hite and the Seven Dwarfs. T his f ilm made $8 million (~$150 million in today’s inf lation- adjusted dollars), and it won eight Oscars. Over the course of Walt’s life, the company continued to produce successful full-leng th animated f ilms such as : Pinocchio (1940), Fantasia (1940), Dumbo (1941), Bambi (1942), Cinderella (1950), Alice in Wonderland (1951), Peter Pan (1953), Sleeping Beaut y (1959), 101 Dalmatians (1961), and Mar y Poppins (1964).

A s the head of the company, Walt was an inf luential leader with a strong work ethic and loft y values. He ran the company as a f lat, nonhierarchical mer itocracy. He held employees to high profes - sional standards emphasi zing creativit y, qualit y, teamwork, communication, and cooperation. Even when facing f inancial pressure, Walt refused to compromise on qualit y and worked to constantly reinvent his company.10

One such reinvention was his idea of building an enter tainment theme park, a testament to his commitment to having fun, and what appeared to his investors and his brother Roy as a cockamamie “project that would not br ing in revenue.”11 Walt forged ahead and purchased 160 acres of land in Anaheim, Califor nia and $17 million dollars later, opened Disneyland on Sunday July 17, 1955. Walt designed and built Disneyland under W ED enter pr ises independent from Disney Productions, to allow his “imagineer” employees to design the park free from the demands of a publicly traded company. Disneyland was built according to Walt’s exacting standards with technically advanced attractions for the entire family. Disneyland was well received by the public and quick ly became an Amer ican landmark. More impor tantly, Disneyland’s success resulted in f inancial stabilit y for the

12company.

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The Walt Disney Company

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By 1957, the company was diversif ied and “Walt Disney himself produced the strategic vision that enables Disney to sustain its competitive advantage and grow th up to this day.”13 His vision is embodied in Exhibit 3 demonstrating how each of the dif ferent businesses were leveraged to create synergies. T he map shows how Disney’s dif ferent business lines, T V, music, studio, merchandise licensing, publications, comic str ips, magazines, ar t cor ner shops, and Disneyland create synergies by leveraging intellectual proper t y (IP) across complementar y business segments. T he map provided “a conceptual f ilter that can be repeatedly used to select, and assemble complementar y bundles of assets, activities and resources to navigate the sur rounding ter rain over an extended per iod.” 14 T he image appears to be a prelude to the model of building successful franchises for which the company attr ibutes its success and long- ter m viabilit y.

In 1965, Walt purchased over 27,000 acres of land in Orlando, F lor ida to create another Disney park that would be “an exper imental protot ype communit y of tomor row, or EPCOT, planned as a liv- ing showcase for the creativit y of Amer ican industr y.”15 However, in 1966, Walt Disney died of lung cancer and was succeed by his brother Roy as the CEO of the company. Roy reali zed his brother’s dream, and opened Disney World in Orlando in 1971. Disney World became the top selling park in the world, with 11 million visitors and revenues of $139 million in its f irst year of operation (~$900 million in today’s inf lation- adjusted dollars).

MICHAEL EISNER In 1984, Michael Eisner was appointed CEO of Disney. He continued Walt Disney’s emphasis on

creativit y, branding, and synergies achieved strong results for the company dur ing his 20-year tenure as CEO (1984–2005). T he media conglomerate’s revenues increased from less than $2 billion to more than $25 billion,16 and its market value from $1.8 billion to a high of $80 billion.17

Eisner star ted his career in 1964 work ing for NBC as a Federal Communications Commission logging clerk, and then worked for CBS where he placed commercials dur ing shows. Eisner moved to A BC in 1966 and fast- tracked to an executive position developing pr ime - time shows, moving A BC from third-place ratings to the f irst-place position. In 1976, a str uggling Paramount Pictures hired Eisner as president and CEO. A gain, Eisner took the f ilm studio from last place to the top and devel- oped “a reputation as a creative genius, an idea man.”18

Eisner believed creativit y was the result of creative conf lict out of which the best ideas would emerge. He also focused on streng thening the Disney brand through synergies across business units. In 1987, he established a centrali zed cor porate marketing function to oversee cor porate -wide mar- keting and branding activities.

Eisner star ted by revitali zing Disney’s television programming and animated f ilms. In T V, Disney produced popular new shows and movies for the Disney channel, A BC, NBC, and created syndica- tion operations to sell Disney programming to independent T V stations.19 In the f ilm studio busi- ness, Eisner raised Disney’s share at the box of f ice from 4 percent in 1984 to 19 percent by 1988, with the release of many prof itable movies, mak ing Disney the Hollywood market leader.20 He also invested $30 million in computer- animated production systems (CAPS) technolog y that digiti zed the animation process reducing the time for producing animated f ilms. Soon thereafter, Disney released successful movies such as Roger Rabbit (1988), The Little Mermaid (1989), Beaut y and the Beast (1991), and Aladdin (1992).

In the 1990s, however, Disney’s animation studio also released a number of movies that f lopped at the box of f ice, including Hercules, Lilo & Stitch, and Brother Bear. Disney’s biggest successes dur- ing this time came from its alliance w ith Pixar, a computer- animation movie studio, producing mov-

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The Walt Disney Company

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ies such as Toy Stor y and The Incredibles. Yet, Steve Jobs disdained Michael Eisner, and Jobs ended the Pixar-Disney alliance in 2004.

In parks and resor ts, Eisner expanded and improved Disney theme parks to increase prof itabilit y, grow th, and synergies with other business lines. He opened new attractions such as Captain EO (1986) and Disney MGM Film Studio (1989). In 1992, Disney also opened a new theme park out- side of Par is, France—Euro Disney. Disney had 49 percent ownership stake and received 10 percent from ticket sales and 5 percent from merchandise sales. In 1999, Disney for med a par tnership with Hong Kong’s gover nment to build a theme park that was opened in 2005. Disney held a 43 percent ownership stake and the Hong Kong gover nment held the remaining 57 percent, which could later be increased to 73 percent by conver ting subordinate shares.21

In consumer products, Eisner’s strateg y of “retail as enter tainment” doubled the average rate of retail sales per square foot in 1992. A myr iad of businesses compr ised this area such as Disney stores, Disney Press and Hyper ion Books, Hollywood Records, and catalog marketing. Disney also entered the home -video industr y by establishing Buena Vista Home Video where Aladdin, in 1993, became the best- selling video of all time with over 30 million copies sold.22

In 1995, Disney spent $19 billion to acquire CapCities A BC, mak ing it the second biggest acqui- sition in U.S. histor y. A BC included T V networks and stations, radio networks and stations, cable including spor ts channel ESPN, in addition to newspapers and other per iodicals. T he deal made Disney the biggest media enter tainment company in the United States and provided world-wide dis - tr ibution outlets.23

However, by the late 1990s, Disney f inancials deter iorated, and this was par tly attr ibuted to Eisner’s heav y-handed management st yle, and strategic imperatives of creativ it y, branding, and syn- erg y. T he increasingly combative culture led to politick ing and high tur nover of executives. T he intense focus on branding also caused displeasure among Disney fans who felt that branding is what you do when you lack or iginal, high-qualit y content.24 In this vein, Eisner’s push for synergies through cross - selling appeared excessive, robbing Disney of its magic.25

By 2005, a conf luence of events led to Eisner’s depar ture. First, a shareholder revolt to remove Eisner was led by Roy Disney, the same person who initially requested Eisner to join the company. Second, Pixar had ended its relationship with Eisner in a public manner that was not f latter ing for Disney. T hird, Comcast made a sur pr ise $66 billion hostile bid to take over Disney.26

ROBERT IGER Rober t Iger was appointed T he Walt Disney Company’s CEO in 2005, after previously having

ser ved as Chief Operating Of f icer. A s CEO, Iger established a new vision and strategic direction for Disney ; he ar ticulated three pillars of strateg y that he felt were aligned with Walt Disney’s or iginal intent, that is invest in: 1) creative content, 2) technolog y innovation, and 3) inter national expan- sion.27 Taken together, Iger envisioned a Disney that uses advanced technolog y to produce creative content with global reach.

To implement his strategic pillars, Iger proceeded to make some major changes in the company beginning with reconciliation with board members who had led the shareholder revolt against his predecessor, and to end other conf licts. Next, Iger worked to change the perception within Disney of technolog y as a threat, to v iewing it as an oppor tunit y.28

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The Walt Disney Company

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Iger also decentrali zed decision mak ing by empower ing individual business, while reducing the role of Disney’s central strategic planning.29 Instead of micromanaging, he took a hands -of f approach and was ef fective in delegating. T his change in str ucture restored the eroded tr ust among upper management and made each business unit accountable to be as creative as possible while optimi zing results. Tr ust and accountabilit y were cascaded through all levels of management and frontline workers.

Iger ar ticulated a cor porate strateg y to pursue billion-dollar franchises, which generally begin with a big movie hit and are followed up with der ivative T V shows, theme park r ides, video games, toys, clothing such as T- shir ts and PJs, among many other spin-of fs. R ather than chur ning out some 30 movies per year as it did pr ior to Iger, Disney now produces about 10 movies per year, focusing on box of f ice hits.

Iger implemented his strategic vision to build billion-dollar franchises by mak ing a number of high- prof ile acquisitions, including Pixar (2006), Mar vel (2009), Lucasf ilm (2012), and 21st Centur y Fox (2019). In par ticular, for mer CEO Rober t Iger led a group of about 20 executives whose sole responsibilit y is to hunt for the next billion-dollar franchise. T his group of senior leaders decides top-down which projects are a go and which are not. T hey also allocate resources to par ticular proj- ects. Disney even organi zed its employees in the consumer products group around franchises such as Frozen, Toy Stor y, Star Wars, and other cash cows.

Disney’s annual movie lineup is now dominated by such franchises as Stars Wars and Mar vel superhero movies and also live - action versions of animated classics such as Aladdin, Cinderella, and Beaut y and the Beast. Some of biggest Disney franchises that star ted with a movie hit include the Pirates of Caribbean (g rossing more than $4 billion), Toy Stor y (over $2 billion), Monsters, Inc. (close to $2 billion), Cars (over $1 billion), and Frozen (over $1.5 billion).

In 2018, Disney released the Black Panther superhero movie based on the Mar vel Comics charac - ter. T he movie was a smashing success at the box of f ice, grossing $1.5 billion on a budget of $200 million. The Black Panther sequel is scheduled to be released in the spr ing of 2022. T he success of the initial movie is the star ting point for another billion-dollar franchise.

In 2019, Disney’s Mar vel franchise released Avengers : Endgame, which was a smash hit in the box of f ice. It sur passed $2 billion in sales in record time and is cur rently the second highest grossing movie of all time. It is the last installment in a ser ies of 22 f ilms, which has grossed over $8 billion in the domestic box of f ice and is the highest grossing franchise ser ies in the United States.

And the billion-dollar franchises machine keeps chur ning out more successes : by summer 2019, Disney had the highest- grossing year in Hollywood histor y (close to $8 billion on movies alone), thanks to Captain Mar vel, Avengers : Endgame, and The Lion King (remake). Coming out in November, Frozen II may help to take the top-line revenue f igure above $10 billion—which is stagger ing sum for big screen movies alone. Taken together, the cor porate strateg y around building billion-dollar franchises is cer tainly paying of f: Disney has seen a steady grow th to its topline, ear ned some $14 billion in prof its (in 2019), up from a mere $3 billion a decade earlier.

Dur ing Rober t Iger’s long tenure as CEO, Disney has per for med well in ter ms of stock pr ice appreciation and f inancials (Exhibits 1 and 2). At the same time, Iger delayed his retirement from Disney f ive times. Each time he leveraged delaying retirement into higher pay that in 2018 was $65 million;30 mak ing Iger one of the highest paid CEOs in cor porate Amer ica. T his attracted cr iticism, including from Abigail Disney31 because Iger’s compensation is over 1,000 times the median salar y of Disney employees.32

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The Walt Disney Company

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ROBERT CHAPEK Despite the fact that Iger’s contract r uns until December 2021, Rober t “Bob” Chapek, Disney’s

new CEO was put in place on Febr uar y 25, 2020, with immedate ef fect. In contrast to Bob Iger, who was char ismatic and cosmopolitan and enjoyed the glamor of Hollywood, Bob Chapek is k nown o be a no-nonsense executive with a streng th in execution and implementation. Chapek is viewed as lack ing Iger’s creative spark and insight, but being much stronger in r unning an ef fective operation. Chapek spent 27 years at Disney, most recently heading the parks and resor ts division, and achieving double -digit growht in all but one year the he was on the helm.33

Strategic Business Units

T he Walt Disney Company is a diversif ied worldwide enter tainment company with operations in four strategic business units (SBUs): Media Networks, Parks and Resor ts, Studio Enter tainment, Consumer Products & Interactive (Exhibit 4). Exhibit 5 shows the revenue share of each segment in 2018. Recently, the company combined for mer Consumer Products and Interactive into a single segment. Across all its four strategic business units, the company engages in a var iet y of cor porate strateg y ar rangements including full ownership, joint ventures, alliances, and long- ter m contracts. T he following is a br ief descr iption of each SBU.

MEDIA NETWORKS Disney’s largest segment by revenues ear ned $24.5 billion in 2018 from cable networks, broad-

casting, radio businesses, or iginal programming, and equit y investments in other entities that oper- ate programming, distr ibution, and content management ser vices.34 Revenues in this segment are from cable, satellite, and telecom ser vice providers (Multi-channel Video Programming Distr ibutors “MVPD”), broadband ser vice providers (digital MVPDs) and af f iliate fees from other T V stations deliver ing Disney programs, adver tisements sales, and program sales for the r ight to use Disney programming. T he cable network includes ESPN, the Disney Channels and Freefor m, which pro- duce their own programs, and der ive revenues from af f iliate fees and ad sales (ESPN and Freefor m). Broadcast businesses include the A BC T V Network, eight owned television stations, television pro- duction and distr ibution. T he major it y of the revenues come from ad sales and some from af f iliate fees. R adio businesses consist of the ESPN R adio Network, which includes four ESPN radio stations and the R adio Disney network. Disney produces and distr ibutes live action and animated television programming which may be sold in network, f irst-r un syndication and other television markets, to subscr iption ser vices and for mats such as DVD, Blu-R ay, and iTunes. Disney has equit y investments in exter nal media businesses including A&E Television Network LLC, BAM Tech LLC, and CT V Specialt y Television Inc.

In 2019, Disney’s acquisition of 21st Centur y Fox also included several television networks, including mega movie hits (Titanic, Avatar) and T V ser ies (The Simpsons), plus some of its key net- works (FX, Hulu, National Geographic Channel).

PARKS A N D RE S O R T S T his is Disney’s next largest business segment with $20.3 billion in revenue with 10 percent of

grow th from 2017.35 T he company owns and operates Disneyland in Califor nia, Disney World in F lor ida, Aulani Disney Resor t & Spa in Hawaii, Disney Cr uise Line, Adventures by Disney, and

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The Walt Disney Company

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the Disney Vacation Club. Inter nationally, the company owns 47 percent of Hong Kong Disneyland Resor t and 43 percent of the Shanghai Disney that opened in 2016. In 2015, the company also com- pleted a $1 billion recapitali zation of Disneyland Par is, increasing its shares from 51 percent to 81 percent. T he company charges royalties, licensing, and consulting fees to Disneyland Tok yo. T he Walt Disney Imagineer ing business designs and develops resor t proper ties and theme park attrac - tions. Revenues are generated from a var iet y of sources including admissions to theme parks, food, merchandise, hotel room nights, cr uise and vacation packages, rentals of vacation proper ties, and royalties.36 In 2018, Disney introduced var iable ticket pr ices that increased for higher demand time per iods (“dynamic pr icing”).37 In 2019, a Disney park executive Cather ine Powell depar ted follow- ing concer ns about Disneyland attendance with the roll out of its new Gala x y Edge attraction based

38on Star Wars.

STUDIOS EN T E R T A I N M E N T T his segment generated $10 billion and 19 percent grow th over the pr ior year in 2018, which,

in par t, ref lects contr ibutions from acquisitions. T he oldest business segment in T he Walt Disney Company, this segment produces and acquires live - action and animated movies, in addition to musi- cal recordings, and live stage plays. T he company distr ibutes f ilms under the Walt Disney Pictures, Pixar, Mar vel, Lucasf ilm, and Touchstone banners. In 2016, Disney ended the 2009 agreement w ith DreamWorks to distr ibute its live - action motion pictures and acquired all r ights titles and interests to 13 DreamWorks f ilms. T he studio enter tainment distr ibutes its creations in the theatr ical market in the United States and inter nationally, it also ser ves the home enter tainment market by selling DVDs online, and it distr ibutes to the television market. T he Disney Music Group, which includes Walt Disney Records, Hollywood Records, Disney Music Publishing, and Buena Vista Concer ts, develops and distr ibutes recorded music in the United States and manages the licensing of the Disney song catalogue. It also produces live musical concer ts through the Buena Vista Concer ts. T he Disney T heatr ical Group develops and licenses live enter tainment events on Broadway and around the world. Revenues are pr imar ily der ived from distr ibution of f ilms to theatre, home enter- tainment and television markets, as well as stage play tickets, distr ibution of music, and licensing of intellectual proper t y.

In 2009, Disney acquired Mar vel Enter tainment for $4 billion added Spider man, Iron Man, T he Incredible Hulk, and Captain Amer ica to its lineup of characters. A successful investment by any measure—Mar vel’s superhero movies have grossed over $18 billion at the box of f ice.39 In 2012, Disney acquired Lucasf lim for just over $4 billion from Star Wars creator George Lucas, adding Dar th Vader, Obi-Wan Kenobi, Pr incess Leia, Luke Sk ywalker, and other characters to Disney, and by 2018 associated revenues sur passed 4.8 billion.40

In 2019, Disney also completed its largest acquisition ever with the takeover of 21st Centur y Fox , adding the Simpsons, Deadpool, and the Fox-owned Mar vel characters such as X-Men and the Fantastic Four to its line -up of characters, as well as control of Hulu.41 However, expectations of 21st Centur y Fox employees were gr im as they braced for lay-of fs,42 suggesting Disney may lose impor tant creative talent. With the addition of 20th Centur y Fox and Blue Sk y, Disney now has seven movie studios with plans to release roughly a dozen movies a year.43

DISNEY CO N S U M E R PR O D U C T S & IN T E R A C T I V E ME D I A T his business segment had $4.65 billion in revenue in 2018—a 4 percent decline from 2017.44 T his

segment generates revenues through licensing Disney’s characters to third par ties for use in con-

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sumer merchandises, published mater ials, and in multi-platfor m games. Revenues are also obtained from selling merchandise, games, children’s books, English language lear ning centers in China, and adver tising. T he segment operations include retail, online, and wholesale distr ibution through the Disney Store, DisneyStore.com and Mar velStore.com, and direct to retailers. For example, Disney is par tner ing with Target to create stores within stores.45 T his division also licenses its trade name, characters, and proper ties to manufacturers, game developers, publishers, and retailers throughout the world.46

T his division is also home to one of Disney’s new strategic initiatives into consumer streaming with Disney+, ESPN+, and Hulu. In 2018, Disney launched ESPN+, a spor ts streaming ser vice that already has over 2 million subscr ibers in less than a year. In November 2019, Disney will launch Disney+ at half the pr ice of Netf lix’s monthly subscr iption fee, and Apple+ streaming is launching at the same time with an even lower pr ice.47 Disney+ a direct- to-consumer streaming ser vice is built around some of its most popular franchises from Star Wars to High School Musical. Disney will also bundle Disney+, ESPN+ and Hulu for $12.99 a month, mak ing this content similar in cost to Netf lix.

Technological change is continuing to reshape the media industr y. Consumers are switching from watching cable T V to viewing content online via streaming ser vices such as Netf lix , and other inter- active media. For example, the Disney Channel and Disney’s ESPN have declining viewership.48 In 2018, ESPN—the most expensive channel in any cable T V subscr iption—lost 2 million subscr ibers.49

However, Disney also added 2 million subscr ibers to ESPN+, its new streaming ser vices dedicated to spor ts coverage, events, and or iginal spor ts programming. Yet, Disney continues to lose money on its streaming ser vices as it attempts to grow its subscr iber base.50

Competition

Disney’s traditional r ivals include Comcast, AT&T (Time War ner and HBO+), National Amusements (CBS and Viacom) and Sony, but this list is growing to include Amazon, Apple, and Netf lix. Relative to its traditional competitors, Disney has a large market capitali zation (over 230 billion). However, new competitors are larger in ter ms of market capitali zation (Amazon $850 bil- lion and Apple $1 tr illion), and Apple has over $210 billion in cash on hand. To complicate matters, Disney’s new stream ser vices, Disney+, relies on Amazon Web Ser vices for cloud ser vices.

Disney’s Media Net work segment competes for viewers, sale of adver tising time, and acquisitions of spor ts and other programming. Its pr imar y competitors for an audience are other television and cable networks, T V stations, DVD and Blu-ray for mats, and the Inter net. For adver tisers, competi- tion is from T V networks, radio and T V stations, MVPDs, adver tising media such as newspapers, magazines, billboards, and the Inter net. Competition for acquisition of spor ts and other program- ming is intense, especially for Disney’s ESPN which faces increasing competition from the spor ts channels of 21st Centur y Fox , CBS, and Comcast’s NBC Universal segment.51

The Parks and Resorts segment competes for consumers’ leisure time. Pr imar y competitors include other for ms of enter tainment, lodging, tour ism, and recreational activities. Specif ic competitors for theme parks and resor ts include Six F lags Enter tainment, Comcast, Cedar Fair, SeaWorld Enter tainment, and Universal Studios.52

The Studios Entertainment segment competes with all for ms of enter tainment including companies that provide f ilms, home enter tainment products, pay T V, music, and live theatre. T here is also com-

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The Walt Disney Company

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petition for per for ming talent, adver tisers, and broadcast r ights. Pr imar y competitors in this area include AT&T (Time War ner), Sony, and Viacom.53

The Consumer Products & Interactive Media businesses compete with other licensors, retailers and publishers of character, brand, and celebr it y names. Competition also ar ises from licensors, pub- lishers and developers of game software, online video content, and websites.54 T he success of this segment is highly cor related to the Studio business and Disney’s abilit y to protect and increase the popular it y of its characters and brands.

STREAMING WA R S Increasing disr uption and convergence in the media and enter tainment industr y is producing a

whole new set of competitors for Disney. Entr y into streaming ser vice is generating cutthroat com- petition with established players such as Netf lix and Hulu (now fully controlled by Disney), but also new entrants such as Apple T V+, AT&T’s HBO M A X, NBC Universal’s Peacock (owned by Comcast), YouTube Premium, as well as Disney’s new streaming ser vices Disney+ and ESPN+. Each of these companies are developing their own or iginal programming to act as an adver tisement for their streaming ser vices to obtain subscr iptions. Shows such as Netf lix’s 13 Reason’s W hy, Amazon’s Transparent, and Hulu’s Diff icult People have gained considerable popular it y.

In 2019, the clear market leader in streaming ser vices is Netf lix with over 150 million subscr ibers worldwide, thereof, 61 million in the United States. T he revenues for the media ser vices provider in 2019 were $16 billion, and its market cap stood at $150 billion. Over the past decade, Netf lix’s stock appreciated by some 2,600 percent, while the tech-heav y NASDAQ -100 index grew by “only” 310 percent in the same per iod. Yet, Netf lix subscr iber grow th in the United States has been slow- ing, and new entrants such as Apple T V+ are pr icing their ser vices aggressively ($4.99 a month vs. $12.99 a month for basic Netf lix subscr iption).

Amazon of fers its Instant Video ser vice to its estimated 100 million Pr ime subscr ibers ($119 a year or roughly $10 a month), with selected titles free. In addition, Pr ime members receive free two- day shipping on Amazon purchases (with one -day shipping announced in 2019). Hulu Plus ($7.99 a month), a video-on-demand ser vice, has some 25 million subscr ibers. One advantage Hulu Plus has over Netf lix and Amazon is that it t ypically makes the latest episodes of popular T V shows available the day following the broadcast ; the shows are often delayed by several months before being of fered by Netf lix or Amazon. A joint venture of Disney (67 percent ownership, but 100 percent voting r ights) and NBCUniversal (33 percent), Hulu Plus uses adver tisements along with its subscr iption fees as revenue sources. Google’s YouTube with its more than 1 billion users is evolving into a T V ecosystem, benef iting not only from free content uploaded by its users but also creating or iginal programming. Google of fers its ad- free ser vice YouTube Premium for $12 per month, which allows users to download content such as videos and music for later, of f-line use (e.g., while traveling in an air plane). And Apple has over 1 billion devices worldwide such as iPhones and iPads as an installed base where users can enjoy its ser vices such as Apple T V+ and Apple Music.

IGER’S ST R A T E G I C VI S I O N Iger’s strategic vision was based on billion-dollar franchises, which generally begin with a big

movie hit followed by der ivative T V shows, theme park r ides, video games, toys, clothing, among many other possible spin-of fs. A s a result, Iger focused Disney on his three pillars of strateg y: 1)

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generate the best creative content possible, 2) foster innovation and utili ze the latest technologies, and 3) expand into new markets around the globe.55

Creat ive Content

W hen Iger took the helm in 2005, Disney was exper iencing abysmal per for mance with its own releases attr ibuted to lack luster creative content and earlier cost-cutting ef for ts. At this time, Disney was in a strategic alliance with Pixar led by Steve Jobs. Disney’s distr ibution network and stellar rep- utation in animated movies were cr itical complementar y assets that Pixar needed to commerciali ze its newly created computer- animated movies. In tur n, Disney was able to rejuvenate its f lounder ing product lineup, retaining the r ights to the newly created Pixar characters and sequels. Pixar became successful beyond imagination as it rolled out one blockbuster after another. Toy Stor y (1, 2, and 3), A Bug’s Life, Monsters, Inc., Finding Nemo, The Incredibles, and Cars, grossing several billion dol- lars. In 2004, renegotiations of the Pixar-Disney alliance broke down attr ibuted to conf licts between Steve Jobs and then-Disney Chair man and CEO Eisner.

In 2005, Iger reinitiated negotiations with Pixar and developed a long- standing fr iendship with Steve Jobs. In 2006, Disney acquired Pixar and gained access to blockbuster hits and tur ned some into billion dollars franchises such as Toy Stor y (over $2 billion), Monsters, Inc. (close to $2 billion), Cars (over $1 billion), and Frozen ($1.5 Billion). Frozen is the most successful animated movie ever and has a sequel scheduled for release in late 2019.

In 2009, Disney acquired Mar vel Enter tainment adding a lineup of superhero characters. Mar vel superheroes movies grossed a cumulative $15 billion at the box of f ice, with The Avengers br inging in some $2 billion.

In 2012, Disney acquired Lucasf ilm. The Star Wars franchise has become the crown jewel in Disney’s line -up of billion-dollar franchises. T he 2015 Star Wars sequel, The Force Awakens, grossed over $2 billion at the box of f ice on a budget of $260 million, mak ing it the third best- selling mov ie after Avatar and Titanic. More impor tantly, the Star Wars franchise with add-on revenues from such areas as streaming, merchandise, books, gaming, and T V shows is estimated to be wor th over $10 billion.56

In 2014, Disney acquired Maker Studios, a YouTube -based multichannel network, for $675 mil- lion. Under Disney, Maker Studios no longer provides some 60,000 YouTube creators with suppor t by promoting their channels and selling ads. Instead, Maker focuses on no more than the top 250 YouTube content creators with a large following in order to build billion-dollar franchises in the new on-demand T V space. One Maker Studios’ early success stor y was YouTube megastar PewDiePie, who with 100 million subscr ibers has the largest following. In 2017, however, Disney cut ties w ith PewDiePie follow ing his publication of videos in which he made inf lammator y remarks that were not in line with Disney’s values.

In 2019, Disney made by far the largest acquisition in its histor y in its purchase of 21st Centur y Fox for $71 billion, adding movies studios, characters, and network assets, as well as control of Hulu. Fox’s large librar y of enter tainment hits combined with Disney’s should provide synergies, but it is yet to be seen if this for ward integration strateg y will pay of f in the long ter m. For example, it has real costs from investing in new resources, as well as lost revenue from Netf lix licensing fees, cable fees, and possibly even movie tickets, as it seven studios cannibali ze each other’s sales.

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Innovat ion and Technolog y

Soon after Iger took of f ice, he f ir mly believed that media companies like Disney needed to star t think ing more like technolog y companies. For example, he made a deliberate decision not to have a cor porate -level CTO and assigned this position to himself, and appointed a CTO for each of the four segments. Iger also included more technolog y exper tise on Disney’s board of directors. He invited Twitter and Square co- founder Jack Dorsey, BlackBer r y CEO John Chen, Facebook COO Sher yl Sandberg, and Steve Jobs who joined the board when Disney acquired Pixar in 2005, and became Disney’s largest shareholder.57

In 2016, Iger made another bold technolog y move by acquir ing 33 percent interest for $1.1 bil- lion in BamTech, a platfor m that allowed Major League Baseball to stream content to consumers directly via the Inter net. In par ticular, BamTech is a content management and distr ibution business with a streaming platfor m that allows for direct- to-consumer programming. In 2017, Disney agreed to invest $1.58 billion for an additional 42 percent share in BamTech br inging its ownership stake up to 75 percent.

The relatively small acquisition for Disney allowed Iger to build its in-house streaming ser vices, Disney+ and ESPN+, and thus to compete directly with other streaming content distr ibutors such as Netf lix and Amazon Pr ime Video. With it, Disney is a fully ver tically integrated media company that produces and distr ibutes its own content, in addition, to using content selective licensing deals.

Internat ional Expansion

Disney’s global presence in the for m of products, ser vices, and brand recognition was another pr ior it y for Iger. Walt Disney Inter national is responsible for Disney’s businesses outside the United States. Disney Inter national has over 13,500 employees with operations in 45 countr ies throughout the world. T he company has a substantial global footpr int across six regions (A sia, Australia and New Zealand, EMEA [Europe, Middle East, Afr ica], India, Latin Amer ica, and Russia). Yet, Disney remains dependent on Nor th Amer ica for most of its revenues (Exhibit 6).

Since its opening on Apr il 1992, Disneyland Par is has str uggled with socio-cultural dif ferences and bar r iers that limited prof itabilit y. T he dismal per for mance was par tly attr ibuted to resistance by the French to what they considered “Amer ican cultural imper ialism” and stated publicly they hoped the Disney Park would be a failure. In 2017, Disney bought out other investors to make Euro Disney (the French parent company) a wholly owned subsidiar y.58

During Iger’s reign, Walt Disney Inter national has implemented integrated str uctures in foreign markets that have “greatly accelerated revenue in China, produced grow th across Japan and Europe and provided unparalleled access to emerging markets throughout Latin Amer ica and South East A sia.”59

Mao and Mickey – Disney in China

CEO Rober t Iger expended signif icant ef for t in the past ten years to establish Shanghai Disney Resor t in China. Iger related the impor tance of China for Disney’s inter national expansion ef for ts.

Well, the negotiations and the process to put a shovel in the ground of Shanghai Disneyland was more than a decade long. It redef ines the word “patience” in many respects. But the rea- son we were so patient, or tenacious, or intent on getting something done, is that we believe this is a fantastic oppor tunit y—perhaps the company’s biggest in the long ter m.60

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In the process of building Shanghai Disney, Iger stressed how impor tant it was to adjust to local culture tastes and preferences, “pr ide in local culture, par ticularly in a place like China, has never been greater…that needs to be ref lected at Shanghai Disneyland.”61 A s a result, the Park was built with unique r ides and features that incor porated Chinese elements such as the “ Tron” light cycle roller coaster, vast central garden for older visitors, and the Wander ing Moon Teahouse.

Shanghai Park opened in the summer of 2016 to great fanfare. Iger hoped that Shanghai Disneyland will create an ecosystem of demand in China for movies, merchandise, apps, and video games. In its f irst year of operations, Shanghai Disneyland had over 11 million visitors, exceeding the company’s most optimistic expectations. However, Disney lowered ticket pr ices in 2018 to boost park atten- dance.62 Competition in the Chinese market for enter tainment parks is also heating up as Comcast’s Universal Studios is building a theme park in Beijing, and Dreamworks Animation is opening a f ilm studio and enter tainment complex in Shanghai. In addition, there are local competitors such as Songcheng Park in Hangzhou and Chimelong Ocean K ingdom in Hengqin.

Moreover, Disney—as a quintessential Amer ican company—may also be negatively af fected by the larger U.S.—China trade war.

Challenges

Many of Disney’s greatest franchises, such as Pixar, Mar vel and Star Wars, were exter nal acquisi- tions. However, an acquisition-led grow th strateg y may not be sustainable. T his is because of the limited number of media companies that Disney can acquire, as well as increased conf licts across business units and divisions. An increased reliance on billion-dollar franchises also reduces or igi- nalit y. For example, Disney relies on a for mulaic recipe of success : a blockbuster hit followed by der ivative shows, merchandise, and other spin-of fs.

While nearly half of Disney prof its come from its T V networks ESPN, A BC, and others,63 the media industr y is being disr upted, as consumer preferences to streaming content via over- the - top ser vices such YouTube, Netf lix , Apple T V+, Sling T V, and other ser vices.64 W hile ESPN continues to do well, the cost of r ights to show the big spor ting events live has escalated dramatically in recent years. A s a consequence, ESPS is losing subscr ibers as many consumers “cut the cord” (that is cancel their cable subscr iption), or never subscr ibe to cable in the f irst place. T his trend also af fects Disney ’s other T V proper ties, including A BC.

Although, Disney is in the process of launching its own streaming ser vices, Disney+ and ESPN+, there appears to be room for only a few, if not just one or two winners in a competitive landscape where Apple, Netf lix , Comcast, AT&T, and Amazon are all chasing after the same costumer. T he question is for how many dif ferent ser vices will the average consumer in the United States and else - where pay for?

Chapek’s Tesla Model X stopped gently in front of the elevator banks in the park ing garage of Disney’s Burbank headquar ters. Chapek hopped out the car, and let the Tesla park itself. A s he pushed the elevator button, he thought to himself “I sure hope that the force is with me, and I can create some more magic for Disney going for ward. . .”

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13

EXHIBIT 1 Disney’s Normalized (% Change) vis-à-vis Dow Jones Industrial Average, 1984–2020.

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October 1984 Michael Eisner appointed CEO

Sept. 30, 2005 Michael Eisner resigns as CEO

Sept. 30, 2005 Bob Iger

appointed CEO

Feb. 25, 2020 Bob Chapek

appointed CEO

Source: Depiction of publicly available data.

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EXHIBIT 2 Disney Financial Data (in $ millions, except earnings per share [EPS] data), 2014–2019

Fiscal Year 2015 2016 2017 2018 2019

Cash and short-term investments 4,269 4,610 4,017 4,150 5,444

Receivables-total 8,019 9,065 8,633 9,334 15,481

Inventories-total 2,741 2,598 2,651 2,706 6,246

Property, plant, and equipment-total (net) 25,179 27,349 28,406 29,540 31,603

Depreciation, depletion, and amortization 24,844 26,849 29,037 30,764 32,415 (accumulated)

Assets-total 88,182 92,033 95,789 98,598 193,984

Accounts payable 5,504 6,860 6,490 6,503 13,778

Long-term debt 12,968 16,657 19,248 17,226 38,275

Liabilities-total 39,527 44,710 49,637 44.643 91,132

Stockholders’ equity-total 44,525 43,265 41,315 48,773 88,877

Revenue (net) 52,465 55,632 55,137 59,434 69,570

Cost of goods sold 28,364 29,864 30,306 32.726 42,018

Selling, general, and administrative 8,523 8,754 8,176 8,860 11,383 expense

Income taxes 5,016 5,078 4,422 1,663 3,031

Income before extraordinary items 8,382 9,391 8,980 12,598 10,441

Net income (loss) 8,382 9,391 8,980 12,598 11,054

Earnings per share (basic) excluding 4.95 5.76 5.73 8.40 6.30 extraordinary items

Earnings per share (diluted) excluding 4.90 5.73 5.69 8.36 6.64 extraordinary items

Source: Tabulation of publicly available data.

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EXHIBIT 3 Creating Synergies across Disney’s Business Lines

TV Music

Disneyland Comic Strips

16mm films

Publications Merchandise Licensing

Creative Talent

Source: Based on Core Competency “Creative Talent” as envisioned by Walt Disney in 1957 (simplifed depiction).

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EXHIBIT 4 Disney’s Business Segments

The Walt Disney Company

Parks & Resorts Studio Entertainment

Consumer Products & Interactive Media

Media Networks

Disney ABC Television Group

ABC Entertainment Group

ABC News

ABC Owned Television Stations

ABC Family

Disney Channels Worldwide

Hyperion

Twentieth Century Fox Film and TV Studios

Disneyland

Walt Disney World

Tokyo Disney Resort

Disneyland Paris

Hong Kong Disneyland

Shanghai Disney Resort

Disney Cruise Line

Aulani Disney Resort

Walt Disney Studios Motion Pictures

Marvel Studios

Lucas Film

Touchstone

Disney Nature

Walt Disney Animation Studios

Pixar

Disney Music Group

Disney Theatrical Group

Disney Consumer Products

Disney Publishing Worldwide

Disney Store

Disney Interactive Media

Disney Interactive Games

Disney +

ESPN +

Hulu

Source: Depiction of publicly available information.

Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction, distribution, or posting online without the prior written consent of McGraw-Hill Education. 16

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EXHIBIT 5A The Walt Disney Company Revenue by Business Segment, 2018 (in $ billion), with total revenues of $59.45 billion

Studio Entertainment $10.00

Media Networks $24.50

Parks and Resorts $20.30

EXHIBIT 5B The Walt Disney Company Net Income by Business Segment, 2018 (in $ billion), with total net income of $15.71 billion

Studio Entertainment $2.98

Media Networks $6.63

Parks and Resorts $4.47

Source: Depiction of publicly available data.

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EXHIBIT 6 The Walt Disney Company Revenues by Region, 2010–2018 (in $ millions)

United States and Canada Europe Asia Pacific Latin America and other

60,000

50,000

40,000

30,000

20,000

10,000

0

2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Depiction of publicly available information.

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Endnotes

1 The Walt Disney Company 2018 Annual Report: https://www.thewaltdisneycompany.com/wp-content/ uploads/2019/01/2018-Annual-Report.pdf

2 Erich Schwartzel, Joe Flint. “Disney Closes $71.3 Billion Deal for 21st Century Fox Assets” Wall Street Journal: https:// www.wsj.com/articles/disney-completes-buy-of-foxs-entertainment-assets-11553074200

3 Jill Disis. “Disney is taking full control of Hulu” CNN Business: https://www.cnn.com/2019/05/14/media/ disney-buys-comcast-hulu-ownership/index.html

4 Alexandra Bruell and Suzanne Vranica. “Disney Bans Netflix Ads as Streaming’s Marketing Wars Intensify.” The Wall Street Journal: https://www.wsj.com/articles/disney-bans-netflix-ads-as-streamings-marketing-wars-intensify-11570199291.

5 Schwartzel, E. (2019), “Disney Enlists Superfans as It Prepares to Face Off Against Netflix.” The Wall Street Journal, August 25.

6 https://d23.com/every-disney-movie-cant-wait-see-2027/

7 2018 Annual Report, The Walt Disney Company.

8 Neal Gabler, “Walt Disney, a Visionary Who Was Crazy Like a Mouse,” New York Times, last modified September 12, 2015, https://www.nytimes.com/2015/09/13/business/media/walt-disney-a-visionary-who-was-crazy-like-a-mouse.html.

9 In 2024, Disney will lose copyright protection of Steamboat Willie, as the original Mickey Mouse.

10 Neal Gabler, “Walt Disney, a Visionary Who Was Crazy Like a Mouse,” New York Times, last modified September 12, 2015, https://www.nytimes.com/2015/09/13/business/media/walt-disney-a-visionary-who-was-crazy-like-a-mouse.html.

11 Astrum People, “Walt Disney Biography: The Man Who Believed in Dreams,” Astrum People website, last modified October 11, 2017, https://astrumpeople.com/walt-disney-biography/.

12 Neal Gabler, “Walt Disney, a Visionary Who Was Crazy Like a Mouse,” New York Times, last modified September 12, 2015, https://www.nytimes.com/2015/09/13/business/media/walt-disney-a-visionary-who-was-crazy-like-a-mouse.html.

13 Guy Kosov, “Walt, Iger Follows You,” Seeking Alpha website, last modified Jan 17, 2017, https://seekingalpha.com/ article/4037425-walt-iger-follows.

14 Todd Zenger, “The Disney Recipe,” Harvard Business Review, last modified May 28, 2013, https://hbr.org/2013/05/ what-makes-a-good-corporate-st.

15 Disneyland news, “A Biography of Walt Disney, the Creator of Disneyland,” Disneyland News website, accessed November 29, 2017, http://disneylandnews.com/2009/06/05/a-biography-of-walt-disney-the-creator-of-disneyland-2/.

16 “Michael Eisner Biography,” Encyclopedia of World Biography, accessed November 29, 2017 http://www. notablebiographies.com/news/Ca-Ge/Eisner-Michael.html.

17 Michael Eisner, “Michael D. Eisner,” Michael Eisner website, accessed November 29, 2017, http://www.michaeleisner. com/bio/.

18 Ibid.

19 “The Walt Disney Company: The Entertainment King,” HBS No. 9-701-035, p.5.

20 Ibid.

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25

30

35

40

45

21 “Hong Kong Disneyland,” Ivey Publishing No. 907M13, p.7.

22 “The Walt Disney Company: The Entertainment King,” HBS No. 9-701-035, p.5.

23 Ibid., p.9.

24 “Michael Eisner Biography,” Encyclopedia of World Biography, accessed November 29, 2017, http://www. notablebiographies.com/news/Ca-Ge/Eisner-Michael.html.

Ibid.

26 Rediff, “Comcast Makes $66 billion Bid for Disney,” Rediff, last modified February 12, 2004, http://www.rediff.com/ money/report/disney/20040212.htm.

27 The Walt Disney Company, “Robert A. Iger Chairman and Chief Executive Officer, The Walt Disney Company,” Disney website, last accessed November 29, 2017, https://thewaltdisneycompany.com/leaders/robert-a-iger/

28 Ibid.

29 Michael Lev-Ram, “Disney CEO Bob Iger’s Empire of Tech,” Fortune, last modified December 29, 2014, https:// thewaltdisneycompany.com/leaders/robert-a-iger/.

2018 Annual Report, The Walt Disney Company.

31 Abigail Disney is the granddaughter of Roy O. Disney who co-founded the company with great uncle Walt Disney.

32 Jack Kelly. “Abigail Disney’s Criticism Of CEO Bob Iger’s Pay Raises Difficult Questions” Forbes: https:// www.forbes.com/sites/jackkelly/2019/04/24/the-story-of-a-disney-heiress-who-criticizes-the-ceos-pay-and-ignites-a- firestorm/#56041df33086

33 Flint, J. and R.T. Watson (2020), “Disney Boss Brings Blunt Attitude,” The Wall Street Journal, February 27, 2020.

34 https://www.thewaltdisneycompany.com/the-walt-disney-company-reports-fourth-quarter-and-full-year-earnings- for-fiscal-2018/

https://www.thewaltdisneycompany.com/the-walt-disney-company-reports-fourth-quarter-and-full-year-earnings- for-fiscal-2018/

36 Ibid.

37 https://www.themeparkinsider.com/flume/201810/6344/

38 Whitten, Sarah. 2019. “Disney Names New Leadership for Disneyland and Walt Disney World.” CNBC: https://www. cnbc.com/2019/09/25/disney-names-new-leadership-for-disneyland-and-walt-disney-world.html

39 https://www.cnbc.com/2019/07/21/disney-has-made-more-than-18-billion-from-marvel-films-since-2012.html

https://www.cnbc.com/2018/10/30/six-years-after-buying-lucasfilm-disney-has-recouped-its-investment.html

41 https://www.thewaltdisneycompany.com/disneys-acquisition-of-21st-century-fox-will-bring-an-unprecedented- collection-of-content-and-talent-to-consumers-around-the-world/

42 Brent Lang, and Matt Donnelly. 2018. Variety: https://www.thewaltdisneycompany.com/disneys-acquisition-of-21st- century-fox-will-bring-an-unprecedented-collection-of-content-and-talent-to-consumers-around-the-world/

43 https://d23.com/every-disney-movie-cant-wait-see-2027/

44 https://www.thewaltdisneycompany.com/the-walt-disney-company-reports-fourth-quarter-and-full-year-earnings- for-fiscal-2018/

https://corporate.target.com/article/2019/08/disney

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46 Adi Ignatius, “Technology, Tradition and The Mouse,” Harvard Business Review, 2011, p.3.

47 https://www.cnbc.com/2019/09/10/apple-tv-pricing-vs-disney-hulu-cbs-and-others.html

48 Erich Schwartzel. “Disney’s Next Big Remake: Itself.” Wall Street Journal: https://www.wsj.com/articles/ to-battle-netflix-disney-goes-for-the-big-remake-itself-11554909176

49 Cynthia Littleton. “ESPN Loses 2 Million Subscribers in Fiscal 2018” Variety: https://variety.com/2018/biz/news/ espn-disney-channel-subscriber-losses-2018-1203035003/

50 Ibid.

51 Samantha Nielson, “Must-Know Guide to The Walt Disney Company’s Competitors,” Market Realist.

52 Bradley Seth McNew, “Top 10 Theme Parks: Disney Dominates and Is About to Get Even Better,” Motley Fool, last modi- fied September 2, 2104, https://www.fool.com/investing/general/2014/09/02/top-10-theme-parks-disney-dominates- and-is-about-t.aspx.

53 Samantha Nielson, “Must-Know Guide to The Walt Disney Company’s Competitors,” Market Realist.

54 Ibid.

55 Michael Lev-Ram, “Disney CEO Bob Iger’s Empire of Tech,” Fortune, last modified December 29, 2014, https://thewalt- disneycompany.com/leaders/robert-a-iger/.

56 Print Out – Aswath Damodaran, “Intergalactic Finance: Why the Star Wars Franchise is Worth Nearly $10 billion to Disney,” Forbes, last modified January 6, 2016, https://www.forbes.com/sites/aswathdamodaran/ 2016/01/06/intergalactic-finance-how-much-is-the-star-wars-franchise-worth-to-disney/#26474c5c1e3b.

57 Brooks Barnes and John Koblin, “Disney’s Big Bet on Streaming Relies on Little-Known Tech Company”, New York Times, last modified October 8, 2017, https://www.nytimes.com/2017/10/08/business/media/bamtech-disney-streaming.html.

58 https://www.themeparkinsider.com/flume/201706/5610/

59 “Andy Bird Chairman, Walt Disney International,” The Walt Disney Company website, accessed November 29, 2017, https://thewaltdisneycompany.com/leaders/andy-bird/.

60 Adi Ignatius, “Technology, Tradition and The Mouse,” Harvard Business Review, 2011, p.7.

61 Adi Ignatius, “Technology, Tradition and The Mouse,” Harvard Business Review, 2011, p.7.

62 https://skift.com/2018/11/08/disney-ceo-still-bullish-on-china-despite-shanghai-park-slump/

63 https://www.thewaltdisneycompany.com/the-walt-disney-company-reports-fourth-quarter-and-full-year-earnings- for-fiscal-2018/

64 “Over-the-top” or OTT denotes the delivery of film and TV content via the Internet, without requiring users to subscribe to a traditional cable or satellite TV services (which used to run easily over $100 a month).

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This document is authorized for use only by qiang cui in MGT235 taught by MARLO RAVEENDRAN, University of California - Riverside from Sep 2020 to Dec 2020.