Ever since Disney business model created the cartoon character Mickey Mouse, the company has become a household name in cinematic experiences around the world. The Walt Disney Company, popularly known as Disney, headquartered at the Walt Disney Studios complex in Burbank, California, is a diversified family entertainment and media conglomerate that includes Disney Parks, Experiences and Products; Disney Media and Entertainment Distribution; and four content groups — Studios, General Entertainment, Sports, and International.
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Walt Disney made a cartoon in Kansas City about a little girl in a cartoon world called Alice’s Wonderland. He arrived in California in the summer of 1923 and contracted a distributor named M.J. Winkler to distribute the “Alice Comedies” on October 16, 1923, and that date became the start of the Disney Company.
The company had Walt Disney and his brother Roy as equal partners in the new company, which was originally named Disney Brothers Cartoon Studio. The name was later changed to the Walt Disney Studio, at the suggestion of Roy.
After making a huge success of Alice Comedies, he created Oswald the Lucky Rabbit in 1927. Within a year, he made 26 Oswald cartoons, which were also a success but presented an ownership rights challenge between him and his distributor. In 1928, while on a train headed to California, he came up with the idea of a mouse character, which was later named Mickey Mouse. With the 1928 release of Steamboat Willie, a cartoon star, Mickey Mouse was born. The new character was immediately popular and went on to become one of the most recognizable cartoons in history.
Afterward, the Walt Disney Company has gone on to produce dozens of very popular films and has evolved into a media conglomerate. And, for over nine decades, it has continued to remain preeminent in the family entertainment industry.
Disney was founded by two brothers, Walt and Roy Disney, and they both owned equal shares. Currently, it is a publicly-traded company, hence, it is owned by several shareholders. The largest shareholder in the company is Vanguard Group Inc., which owns 137.8 million shares, amounting to about 7.6% of the company. According to Business Insider, the Disney family currently owns less than 3% of the Disney Company.
“To entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds, and innovative technologies that make ours the world’s premier entertainment company”.
The Walt Disney Company is a diversified family entertainment and media enterprise. It has five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive. All of these individual segments are money spinners for the company. We shall now take a look at how the company generates income from them individually.
This segment covers Disney’s online games and entertainment. This included the production and distribution of multi-platform games, licensing of game content, and the creation of branded online services. Revenues from this segment were generated through the sale of games; subscription to online and mobile games; and online advertising and sponsorships.
This is a segment and subsidiary that deals in merchandising of the Disney brand and Disney properties through its many Disney Parks, local and international retailers, e-commerce platform as well as Disney store locations around the world. This segment generates revenue through the sale of consumer products — from toys to t-shirts, books, console games, and more —, and licensing of characters from Disney films to third parties.
The studio entertainment segment is where the Walt Disney Studios belong. The Walt Disney Studios has been the foundation on which The Walt Disney Company was built. The studio delivers quality movies, music, stage plays, and episodic storytelling throughout the world. The Walt Disney Studios comprises: Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Lucasfilm, 20th Century Studios, and Searchlight Pictures. This segment generates revenues through the distribution of films to theaters, homes, and television markets globally; distribution of recorded music; stage play tickets; and licensing revenues from live events.
Disney Parks and Resorts include the Disney theme parks, resort hotels, water parks, dining, conference centers, and other recreational facilities. In 2020, the United States’ Magic Kingdom (Walt Disney World) was visited by nearly seven million people, making it the most visited amusement park worldwide. This segment also runs the Disney Cruise lines and vacation club. Revenue is generated through: admission fees to theme parks, payments for cruise vacations, sales of food and merchandise, and fees for hotel rooms.
This segment accounts for Disney’s various cable networks such as ESPN, ABC Family, and Disney Channels. The company also owns television production operations, television distribution, and radio networks. Revenues within the media network segment are generated through advertising fees, affiliate fees charged to their various media services, and the sale and distribution of television programming.
The Disney Business Model can be explained in the following business model canvas:
Disney’s customer segments are broadly divided into three:
Disney’s value propositions for each of its customer segments are as follows:
Disney uses multiple distribution channels to reach its customers. They include:
Disney has built its customer relationship on the foundation of Safety, Courtesy, Show, and Efficiency through:
Their revenue streams include:
Disney’s key resources comprise both tangible and intangible assets.
Disney’s activities are created to ensure entertainment for their customers.
Disney’s key partners are an integral part of their business success.
Disney’s cost structure comprises:
Below, there is a detailed swot analysis of Disney:
-> Read More About Disney’s SWOT Analysis
The Disney brand has proven to be a very stable brand name in global infotainment. They continue to innovate on their content and spread their coverage to new places. From a humble beginning, they have grown into an iconic brand, warming its way into the hearts of millions of its customers around the world.
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Absolutely brilliant analysis. Thank you.