From Walt Disney's production of the Alice in Cartoonland series in 1923 to the release of Disney's centennial tribute film "Wish" last week, Disney, the media and entertainment giant, has gone through a century.
However, this masterpiece, which has been released for nearly a week, has not met industry expectations. Its box office performance was not even as good as "The Hunger Games: Song of Songbirds and Snakes" in its second week of release and the new film "Napoleon" in the same period, ranking only third in the global box office.
"Star Wish" box office comparison for the same period
Data source: IMDb
In fact, this is not the first Waterloo for Disney Pictures. Looking at the movies released by Disney Pictures in 2023, it can be said that none of them meet the expectations of the market, consumers, and even Disney itself.
However, according to Disney’s financial report data released in early November, revenue in the fourth quarter and full year of fiscal year 2023 increased by 5% and 7% respectively. Although movies, Disney's main business line, have performed poorly, Disney's revenue has continued to rise.
TOP You can’t help but ask, how is Disney’s magic achieved? The King of
IP loses creativity
IP, the soul of the Walt Disney Company.
Looking back at the acquisition history of the "century-old store" Disney, the large proportion of IP and the high value can be seen.
In 2007, Disney spent US$7.4 billion to acquire Pixar Animation, bringing under its ownership a series of animated films with high box office and reputations, such as Toy Story and Finding Nemo, and has harvested US$11 billion in box office in the past ten years.
At the end of 2009, Disney spent US$4.2 billion to acquire Marvel. Since then, the Marvel Cinematic Universe has expanded rapidly, bringing Disney a box office of US$19.7 billion in the past ten years at a rate of 1-3 movies a year.
In October 2012, Disney acquired Lucasfilm for US$4.05 billion. As a classic among fans, the Star Wars film series has brought Disney a box office of US$4.85 billion in the past ten years.
In the past few decades, Disney's IP has created box office miracles again and again, including "Avengers 4" with a global box office of over 2.7 billion U.S. dollars, and "Frozen" with a global box office of nearly 1.3 billion U.S. dollars, etc. .
In addition to the acquired IP, Disney’s princess IP also has an influence that cannot be ignored on a global scale.
But after the Princess series IP has gone through the life cycle of "fairy tale adaptation → original story → live-action remake", the original story is no longer attractive, and the live-action remake has become mediocre.
As a tribute to Disney’s centenary film and another original IP, "Star Wish" did not achieve the box office results it expected, and its reputation also showed a polarizing trend.
Data from the American film review website Rotten Tomatoes (ROTTEN TOMATOES) shows that the Rotten Tomatoes index of "Wish" is only 50%, which can be said to be a very average level for Disney; its reputation among the audience is acceptable, with a score of 82% The popcorn index.
"Star Wishes" Rotten Tomatoes Index
But no matter how high the audience's evaluation is, it still cannot save its precarious box office. Many professional film critics believe that the plot setting of the movie is still an old-fashioned Disney story, and the animation production also lacks innovation and dazzling features, which is also a common problem of Disney movies in recent years.
Among the Disney films released this year, films such as "The Little Mermaid", "Raiders of the Lost Ark: Spin of the Lost Ark" and "The Elemental City" performed generally, while "Ant-Man and the Wasp: Quantum of Madness" and "Captain Marvel 2" were among the Marvel movies. The sequels to the IP series are even more disappointing, with the only one that can rival past results being "Guardians of the Galaxy Vol. 3."
It can be said that even if Disney's movie business accounts for more than 40% of the North American market, IP cannot save Disney in terms of content production.
Box office losses, but revenue is still growing
Disney’s 2023 financial report mentioned in the previous article shows that the full-year revenue for fiscal year 2023 increased by 7%.
Disney's 2023 financial report
Although it has shrunk significantly compared with the 23% growth in 2022, it can't help but make people wonder: Movies have not reversed the downward trend, so where does Disney's revenue come from?
Different from previous public financial reports, this year Disney divided its revenue into three major aspects: entertainment (Entertainment), sports (ESPN) and experiences (Experiences). The
entertainment segment includes film distribution, streaming media and television networks. In fiscal year 2023, it increased 3% year-on-year to US$40.635 billion, with annual operating income of US$236 million, an improvement from the loss of US$608 million a year ago.
It is worth noting that Disney will display the performance of streaming media separately this time.
Disney's streaming service, which includes Disney+, Hul and ESPN+, narrowed losses to $387 million from $1.47 billion a year ago due to higher pricing and higher advertising revenue. Disney+ streaming media added nearly 7 million subscribers this year, and Disney+ and Disney+ Hotstar together have more than 150 million users. Disney said in this regard that its streaming media business is expected to reach profitability in September 2024.
In the sports segment, fiscal 2023 revenue fell 1% year-on-year to $17.111 billion, but ESPN delivered its best overall ratings in four years and its highest ratings among the 18- to 49-year-old demographic prized by advertisers.
Experience segment, including Disney theme parks, resorts, cruise lines and consumer products. Total revenue in fiscal year 2023 increased by 16% year-on-year to US$32.549 billion, and operating income was nearly US$1.8 billion, a year-on-year increase of 31%. Among them, due to changes in China's prevention and control policies, the attendance rates of Shanghai Disney, Hong Kong Disneyland and Disneyland Resort have increased.
Industry insiders believe that this shows that the strategy of Bob Iger, executive chairman, chairman of the board and CEO of The Walt Disney Company, has had a positive effect, and also illustrates its active cost reduction (expected to achieve annual savings of US$7.5 billion), creation Better-than-expected streaming subscriber revenue and the confidence to announce that Disney is once again entering a "building" phase.
Judging from Disney's overall revenue in fiscal year 2023, Disney+ and the park account for a large proportion, and are the two main levers for Disney to turn losses into profits. But in the long run, content is still the core of Disney. Bob Iger also said that Disney’s goal is quality rather than quantity. However, because this sentence is said every year, it has also been ridiculed by foreign netizens. Obviously, Disney has a lot to do besides reducing costs and increasing efficiency.
Netizens tease Bob Iger
Will Disney rely on the Chinese market to survive its 100th anniversary?
After reading Disney’s financial report, it is not difficult to deny that the Chinese market is crucial to Disney.
China is the largest ticket warehouse in the world. It has two Disney parks and is good at co-branding.
Disney, which loves to buy IP, also loves to make money from IP copyright. In the Chinese market where co-branded products are everywhere, Disney will not let go of this excellent opportunity on the occasion of its 100th anniversary.
Disney's 100th anniversary co-branding
Disney's 100th anniversary co-branding has taken two major directions. One is to expand the brand's reputation through limited edition co-branding, and also creates opportunities to share brand value through co-branding with major well-known brands; the other is to use ordinary co-branding to Classic IP images emphasize emotional connections. In the 3C digital category of
limited co-branding, Disney has chosen to co-brand with Apple, Xiaomi and Leica. Among them, Xiaomi, as a Chinese local brand, not only launched a series of electronic products such as co-branded limited mobile phones, headphones, and bracelets, but also launched limited-design mobile phone cases and other accessories to attract Disney consumers in the Chinese market in this category.
Xiaomi x Disney 100th Anniversary
In the general co-branding, Disney not only launched a series of blind box trendy toys with the retail department store brand Miniso, but also continued to export Disney's childlike innocence through daily necessities. In addition, there are many clothing and home furnishing brands participating in the centenary celebration.
Disney authorized co-branded products are one of the revenues that have not yet been specifically reflected in the financial report.
In September this year, Disney, the world's largest authorized retail licensor, launched a new cross-border strategy to promote Chinese brands to better ship Disney authorized products abroad, while continuing to design its franchise products to attract more Many young and family consumers. "The Top Global Licensors Report 2023" released by the licensing industry magazine "LICENSE GLOBAL" under the
Global Licensing Show shows that Disney's licensing business reached US$61.7 billion last year, ranking first in the world.
The Top Global Licensors Report 2023
Disney’s consumer products division’s revenue in China increased by double digits this fiscal year. Over the past decade, some 800 million "Frozen" licensed products have been sold in China. Disney China's creative team develops more than 200 new product designs every day on average, about 80% of which are converted into products.
The charm of the Chinese market is evident.
Kermid Rahman, general manager and senior vice president of consumer products for China and South Korea at The Walt Disney Company, also said: As more and more Chinese brands and companies have gained experience in product development, quality control and digitalization in recent years, they have become more successful in the international market. Competition is also becoming increasingly fierce. Therefore, Disney is also focusing on more international brands to expand their footprint in China.
In December, the first "Zootopia" park will be opened in Shanghai Disney Park. The magic of Disney IP may also bring another wave of growth to it in China.
Streaming media, Disney’s ultimate self-rescue
The business landscape of the entertainment industry is always changing.
Although many companies are now operating their own streaming media businesses, whether the business can retain users for a long time is worth raising a question mark. The strike by Hollywood writers and actors some time ago exposed such shortcomings - the strike mainly protested the outdated royalty model of streaming media companies that did not consider their content.
mentioned in the previous article that the works released by Disney this year did not meet their box office expectations, and they also lost a large number of Disney+ subscribers in the first three quarters. But on an overall level, this is indeed a trend across Hollywood, and it is undeniable that although Disney is still struggling, it is still one of the extremely important brands in the global media market.
streaming media losses have reduced, subscribers have increased by nearly 7 million, and are expected to reach profitability in September 2024... Disney's streaming media business has become its most important self-rescue platform outside of its theaters and parks.
It is understood that Disney also plans to launch a beta version of the Hulu and Disney+ combined application in December and fully launch it in the spring.
Once this move is completed, Disney's streaming media business will have a total of nearly 100 million users, far exceeding other streaming media competitors including Netflix.
TOP believes that if Disney wants to make substantial profits in the streaming media business in the future, it will also need to pay attention to the advertising business that foreign streaming media currently despises. Disney hopes to reduce content output that is not high enough and achieve results in streaming media and experience business. But whether the wish to "require quality rather than quantity" can become a reality can only be pinned on this "century-old store" not to get into trouble.
In the 100th anniversary short film "Once Upon a Studio" released by Disney, fans are shown 543 classic characters from more than 85 works. Let us wait and see whether it can create classic IP again in the future and reach the next century.
Disney "Once Upon a Studio"
