A few days ago, Disney CEO Robert Iger said in an interview with a CNN reporter that Disney Shanghai Park will not be affected by Wanda. "No matter how fierce the competition in this market is and what other competitors say, the company has strong confidence that its investment in Shanghai will bring good returns in the future."
Where does Disney’s confidence come from?
In fact, Disney’s CEO has a strong Internet mindset, which is the key to the company’s longevity. At present, Disney has formed an ecosystem of: "IP + media + content + theme park + technology".
Media is the intersection of content and technology
Disney CEO: Working with Steve Jobs shaped my thinking
In an interview with Fortune magazine, Iger talked about the importance of his relationship with Jobs. Edwin Catmull, Disney's president of animation, commented on the relationship between the two: "If there is a unique relationship that shaped Iger's thinking, it was undoubtedly his six-year friendship with another CEO, Steve Jobs."
When talking about how two people collided with each other, Eagle gave an example:
We occasionally stand in front of a whiteboard and talk about our ideas and think deeply about business issues. When we think about this, we find that media is the intersection of content and technology, just like photography and photography technology, both are related to storytelling. So we'll be talking a lot about that, about the intersection of story and equipment.
Inspired by Steve Jobs, Iger believes that Disney does not rely on theme parks to make money at all.
According to the financial report, Disney's total revenue in fiscal year 2015 was approximately RMB 345.76 billion. This revenue level exceeded the total revenue of China's three major Internet giants Tencent, Alibaba and Baidu (BAT) in fiscal year 2015. The main source of revenue does not come from the much-anticipated theme parks, but from movie and online business revenue accounting for 44%, Disneyland Resort accounting for 30.8%, and movie entertainment accounting for 14%.
Although Disney is a company with a complete entertainment industry chain, the most profitable thing is not only the Disney IP products themselves, but the O2O media ecosystem.
Can we see what Disney is doing?
What Disney is most envious of in China's film and entertainment industries is probably its complete industrial chain layout - five major business sectors: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive Entertainment, which has built an ecological landscape for Disney's IP that can be transferred and added value. This is so on the surface, but it is not easy to understand.
In 1996, Disney acquired ABC and its affiliated television networks, ESPN sports channels and other businesses for US$19 billion. Currently, these businesses still account for more than 40% of Disney's total revenue.
Since 2005, Disney has acquired Apple Inc.Pixar Studios owned by company founder Steve Jobs, as well as Marvel Animation, Lucasfilm, etc., these acquired companies currently contribute most of Disney’s movie box office. At the same time, most of Disney's popular new cartoon characters in recent years were created by these acquired companies.
Over the past decade, Disney has spent $15 billion to regain the children's market it once had a firm hold on. Acquisitions of Pixar, Marvel and Lucasfilm give the company a broad portfolio of popular entertainment and nostalgic content for parents, as well as control of mainstream entertainment franchises.
At the same time, Disney has been trying new channels in the past two years, investing in the video website Hulu, opening new paid channels with Sony Playstation Vue, launching its own streaming media APP DisneyLife in the UK, and developing the Internet TV set-top box "Disney Vision" with Alibaba.
Related to technology and connected to Silicon Valley
Disney has been inviting people from Silicon Valley to serve as its independent directors in recent years, such as Jack Dorsey, co-founder of Twitter, and Judith Estrin, former CTO of Cisco.
Before Dorsey, Facebook COO Sheryl Sandderg and BlackBerry CEO John Chen were already members of Disney’s board of directors.
Earlier, when Disney acquired the animation production company Pixar, Jobs was Disney's largest individual shareholder at the time. The addition of Pixar also gave Disney the world's most advanced 3D animation production system, which is still being continuously developed and evolved.
Disney CEO Robert Iger said that Disney's strategic focus is to use the latest technology and platforms to reach more people and enhance relationships with consumers, so the perspective brought by Dorsey is very valuable.
Disney’s entry into Silicon Valley is obvious to all: it mainly enters the social and mobile gaming markets through acquisitions. In 2007, Disney spent US$350 million to acquire the children's social game website Club Penguin, and in 2010 it acquired the iPhone gaming startup Tapulous.
Based on Tapulous, Disney established a mobile division with an office in California. Disney Interactive has since shed its family gaming business. In 2010, Disney spent US$563.2 million to acquire social game developer Playdom.
Disney’s acumen in the field of technology is not bad at all, and it has recently taken a fancy to VR technology: According to news on September 22, 2015, Disney led the investment in the virtual reality company Jaunt VR. According to news reports on April 26, 2016, Nokia has signed a multi-year cooperation agreement with Disney. Its main intention is to promote the development of VR virtual reality content.
To this end, we see a Disney ecosystem of "IP + media + content + theme park + technology".
Traffic thinking: The park is the entrance to the experience, and people are the traffic
Judging from media reports, not all the five parks in the United States, Tokyo, Paris, and Hong Kong are profitable. The financial report released by Hong Kong Disney in February this year showed that it fell into losses again, while Paris Disney has only been profitable for 2 years in 17 years.
On the other hand, Disney parks in Los Angeles and Orlando in the United States and Tokyo, Japan are making huge profits, with profits reaching US$1 billion. Taking Tokyo Disney as an example, tickets accounted for less than 40% of its revenue in 2015, while merchandise operations and catering and accommodation each contributed about 30% of revenue.
Despite this, theme parks are not Disney's main source of revenue. In other words, Disneyland is equivalent to an offline experience, and its revenue is mainly from online media and film entertainment, accounting for more than 58%. If Disneyland does not make money, it will be comparable to the free model of the Internet, or even a subsidy model. For example, after the opening of Shanghai Disneyland, based on a relatively conservative calculation of 10 million passengers in the first year, Shanghai Disney's first-year revenue will start at 5 billion.
Interestingly, Eastern Airlines has become the first public transportation company to sign a global cooperation framework with the Walt Disney Company. It is expected that in terms of incremental passengers, based on past experience, the annual number of visitors to Disneyland is generally controlled at around 13-15 million. Among them, the passenger flow brought by air transportation generally accounts for 20%-30% of the number of global park visitors. It is expected that Shanghai Disneyland will bring an increase of 3 million to 4 million visitors. Dong Bo said that China Eastern Airlines is expected to handle about 2 million tourists. If the average ticket price is 1,000 yuan per ticket, it will bring at least 2 billion yuan in revenue to China Eastern Airlines.
This is Disney’s traffic thinking.
IP thinking: content is the entrance, media is extension and action
Of course, Disney's core is still the "IP + content + media" ecosystem.
In addition to box office revenue, Disney movies also reflect their media extension.
Disney CEO Robert A. Iger specifically mentioned "Frozen" in the "Letter to Shareholders" at the beginning of the 2014 fiscal year financial report - "Because of the unprecedented success of "Frozen," the consumer products department in fiscal 2014 can be said to be a record-breaking performance. This story we created with heart has captured the imagination of the world, and the global response to The demand for consumer products related to movie characters continues to grow. During the U.S. holiday season, "Frozen" broke sales records for several different types of consumer products. The power of the franchise is also very strong, and the retail sales of the Elsa doll in the United States reached 26 million US dollars."
According to media reports, the "Princess Dress" of "Frozen" sold 3 million units in the United States in less than a year, earning about 450 million U.S. dollars, more than 1/3 of the total box office revenue.. Disney has carefully built its "Ice" derivatives empire to cope with the continued rise in consumer demand, once again proving the unlimitedpotential of the derivatives market. The price tag of this official Disney "Elsa skirt" is US$149.95, which is approximately RMB 900. The "Frozen" themed attractions are already coming to Disneyland and will become a tourist attraction.
While another movie "Zootopia" is in theaters, "Judy" phone cases and carrot recorders are almost out of stock. Among them, the carrot voice recorder that appeared in the movie is priced at $21.81 on Amazon in the United States. This voice recorder has built-in 14 different lines of Rabbit Officer Judy, and can also record audio for up to one minute, which is very popular.
This is a typical "IP + content + media" ecology. Story content and visual expressions become traffic portals; media is extension and action, and film content is marketing. It is natural for its derivative consumer products to sell well. On December 15, 2015, Disney announced that it would cooperate with Alibaba to launch Disney Vision, which is the result of the promotion of Internet thinking.
Technological thinking: it is imagination and driving force
Movies have been related to technology since the day they were born, and Disney is no exception. In addition to being an "entertainment kingdom", Disney is also a technology empire.
Disney founder Walt Disney said, "As long as imagination exists in the world, Disneyland will never close." In fact, imagination is closely related to technology. For example, Shanghai Disney uses many advanced technologies, some of which are even at the forefront of the world today.
Disney not only has fairy tales, but also "black technology". For example, the Labor Daily disclosed that land is the most representative example. For example, the current location of the paradise was originally a large area of farmland, residential buildings, factories and more than 160 rivers. According to the requirements of the United States, farmland, soil from building sites and water in rivers in this area must be strictly tested for a total of more than 30 indicators, including heavy metal indicators. If there are any problems, they must be removed, shipped out and treated harmlessly.
Some experts put it graphically: After cleaning the soil of Disneyland, it has reached a level where children will not have problems if they eat it by mistake. In addition, the world's first attraction "Light Wheel", "Adventure Island" using "naked-eye 3D" technology, the innovative dynamic driving system developed by Walt Disney Imagineering, and "Soar Over the Horizon" also pioneered the use of a top-notch camera system, whose resolution has reached the highest level in the world. Other black technology applications include black gloss paint, sculptural epoxy resin, magnetic levitation, etc.
So, we can say that Disney is not only good at selling dreams, but also the world's super technology company. Apply black technology to toy manufacturing and directly bring Star Wars into reality. Many people online are impressed by several high-tech toys such as Playmation wearable toys, AR coloring books, VertiGo robots, BB-8 robots, and EM-Sense smart watches. Recently, Disney applied for a license called “"Near Instantaneous Object Printing Using a Photo-Curing Liquid" (near instantaneous printing technology of liquid photosensitive resin), this technology greatly shortens the time of 3D printing.
Now Disney has begun researching the field of VR again, and will use the technology in scenes in amusement parks or in movie visual effects and entertainment experiences in the future.
In short, since Disney CEO Iger and Steve Jobs interacted, they have formed a disruptive new thinking: media is the intersection of content and technology. From this we can see that Disney has formed an ecosystem of: "IP + media + content + theme park + technology". IP is the origin and the core needs of users, media is extension, action, content is communication, theme parks are experience, and technology is the driving force.
