The entertainment giant Disney is celebrating its 100th birthday with the show-business panache you might well expect. There is, however, a reason why investors and anyone interested in business should be watching, and not just to catch a glimpse of Buzz Lightyear. From the days of its first short animated films, Disney has grown to become one of the most successful entertainment businesses in the world, and in Snow White, Dumbo and Toy Story it has created some of the best films ever made in any genre. But it has also built one of the most powerful brands of all time. No other major global company has quite the same reach as Disney. Its power is unique.
It has been a pretty good investment, too. Disney listed in 1957 on the New York stock market, and if you had invested $500 in the IPO the shares would now be worth $2.6m, not including dividends. There are very few businesses that have that kind of a record, especially not in the often fickle media and entertainment industry. True, it has drifted in the last five years, with the shares down by 33% since 2018. The pandemic hardly helped its theme parks, and the costs of setting up a streaming unit have been huge. Even so, over the longer term, it has managed to retain its grip on the mainstream entertainment industry.
So what could any company learn from its enduring success?
1. Tell great stories
From the very start, Walt Disney himself was personally involved in all its projects. He started his career as an animator, and by the time he died in 1966, he had worked on 81 of its films. The company has clearly evolved since then, and no one expects its top executives to be drawing Mickey Mouse anymore. But, it has retained a unique ability to tell great stories and create characters that resonate with the audience. Even more importantly, right from the very start, it created a strong identity for all its products. For a family audience, the Disney logo was a guarantee of quality, and that counted for a lot.
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2. Keep evolving
Disney started with animated short films, then expanded into full-length films and then into theme parks. But it didn’t stop there. Under its chief executive Bob Iger it acquired the Pixar studio for $7.6bn in 2006, Marvel Entertainment for $4bn in 2009, and Lucasfilm, which controls the Star Wars franchise, for $4bn in 2012. Most recently it bought the Fox film studio from News Corp and has launched a hugely successful streaming service, the only serious competitor to Netflix. Disney may have started as a children’s brand, but it has steadily turned itself into a full-range entertainment conglomerate. Not every acquisition has worked out, but more of them have succeeded than have failed.
3. Never give up on a product
Disney never gives up on a product. Next year it will be releasing a live-action version of Snow White, the full-length animation film that was the foundation of its success when it was first released back in 1937. It has been milking the Snow White franchise for seven decades now and it keeps on delivering. Star Wars has been turned into a whole industry by itself since Disney took control of the product, and The Lion King has been turned into a juggernaut on-stage as well as the original film. It doesn’t work for every film in the catalogue but Disney is very good at refreshing a product and putting it back on the market as something new. That is a lot easier, and a lot better for the bottom line, than constantly coming up with completely fresh material.
Disney has, of course, made plenty of mistakes over the last century, too. The Lone Ranger from 2013, for example, remains one of the biggest box-office disasters in movie history. But any company of this size is going to make a few bad calls. At Disney, the core business is so strong that it can recover very quickly, and it has the culture to fix mistakes before they sink the whole ship. A century as the greatest brand in the world is a long time and one that has been hugely rewarding for investors. It’s a record any business can learn from.
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Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years.
He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.
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