My colleague Rick Aristotle Munarriz described Disney's latest quarterly as a home run, despite only 1% revenue growth. His enthusiasm for the company's performance is based on its gains in operating profits. There are a variety of factors we might identify to explain its profitability successes in recent quarters, not the least of which is its multiplatform content-distribution model.
This is fine, but it is certainly driven by fewer but stronger Disney-brand content.
The company's multiplatform content-distribution model, which includes DVD, iTunes, and now VOD, provides a variety of avenues for Disney to reach out to the consumer. But multiplatform options are only as useful as the content that drives them. That's why the most illuminating part of the whole call was when Iger indicated that this multiplatform model is being coupled together with a strategy to invest in select Disney movies (versus non-Disney ones) with a greater emphasis on franchise titles. It's believed that focusing on fewer big hits that bear the Disney name, and then making them available through the various distribution channels, is the best way to achieve higher margins.
Now, do you think that such a model might work in the theme parks sector? How about fewer theme parks (i.e. stop with the opening of more Disney parks throughout the world), but pouring more money into existing theme parks "brand" to make their content stronger?
Zz.
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