Unit 8 case study
Technologies
Satellite and cable
Disney is both satellite and cable as it has over 70 million
subscribers to the channels in Europe and in the US 89% of households have the
Disney channel package. The channels are broadcast worldwide and are broadcast
in several different languages including Spanish, English, French and German
and many others.
Digital
Disney runs as a digital channel as it is not one of the
analogue channels as they are the 5 main channels in the UK including the BBC,
ITV, Channel 4 and Channel 5, but Disney is broadcast to the UK via Sky,
Virgin, BT or any other providers.
Film based
A huge amount of Disney’s profit comes from film making and
their latest film Frozen grossed over 1 billion dollars. Overall since Disney
is one of the leading film makers their films are expected to get high gross
figures with every release.
Interactive
Disney has many ways to interact with its customers for
example they have programs like Disney mobile which is part of the Disney
interactive sector and it designs mobile apps, wallpapers, ringtones and games that children can play with their
favourite characters on. The Disney Interactive company, which is a subsidiary
of Disney, makes the games and is part of the Disney internet group. Disney also runs Disney on Ice, which is a
Disney tour that goes all the way round the world and gives fans of the movies
a chance to see their favourite characters perform their favourite parts from
their films.
Internet
Disney has a set sector for dealing with its online
activates and they are the Disney Internet group which is a subsidiary of the
Disney Corporation. Disney runs a main
website with several links to other websites for example the main Disney
website has links to the website for Disney Land and the Disney channel.
Ownership
Private Ownership and
Commercial usage
The company is owned privately and by shareholders and a
board of directors. The company’s biggest shareholder is Steve Jobs who owns a
7% stake in the company and although dead is still listed on the board of
directors. The company CEO is Robert Iger who has been in charge of the company
since March 2012 was elected to govern the company by Tim Cook, who now is
Apple’s CEO. The Disney Company does not advertise on all of but one of its
channels, the odd one out is Disney XD, which mainly advertises children’s
toys, but apart from that channel, the other channels advertise other Disney
shows, films or products made by Disney. Disney is not a public service, an
example of a public service is the BBC because it has no owner and is paid for
by the public.
Corporate, global
company and monopoly
Disney is a corporation because it is a large company, which
acts as a single entirety for example the Disney Animation Company, is sold as
part of the main Disney Company. It is also a global company because its
products and material are broadcast and distributed worldwide and are sent out
through Disney’s distribution arm of its company. As a story, monopoly company
Disney does not spend much of its budget on a film paying other film distributors
to send it out to the world because they have the power to do it on their own.
Disney is not an independent company, and example of an independent company is
Paramount who only produces the films but need the help of bigger companies to
distribute it around the world. Although Disney is a monopoly, there are other
companies that are also oligopolies for example Paramount is an oligopoly
because it relies on other companies to help advertise their films.
Vertical and
Horizontal integration
Disney is both vertical and
horizontal because of the companies that it has bought and taken them under
their wing. Disney’s takeover of ESPN would be considered as
horizontal integration, as the company does not form a part of the production process of any Disney productions.
Its takeover of ABC would be considered as vertical integration, as the TV
network forms a place where Disney can broadcast its productions, this
is the same as when Disney bough Pixar because they use Pixar to produce and
broadcast their material.
Funding
Licensing fees
When a company wants to sell Disney’s products they must
first meet a set stand set by the Disney Company, which they must meet, some of
these are; the company must have been manufacturing and distributing toys and
other related products for at least 5 years and, the company must not be an
intermediary. Then once these criteria have been met by the company they must
agree to set terms and conditions which also include that Disney will receive
50% of all profit made but will not pay distribution fees and a set amount of
money must be agreed at the start of the financial year depending on profit
made in the previous year. Viewers of Disney don’t pay a license fee like
people in the UK do for the BBC because Disney is a private company that
doesn’t run off public funds whereas people pay for the BBC and this means the
BBC is funded by the public and belongs to the public.
Subscription and Pay
per view
Disney runs several channels and most popular is the Disney
channel, which is subscribed to 86% of televisions in the US, which earns the
company around $750 million a year. Disney runs subscriptions through Virgin,
Sky and BT and they receive a set amount from every fee paid. Disney also runs
a pay per view system with the Sky Movies Disney channel and has been known in
the past to run it on its Disney channel when a film has premiered on the
channel.
Advertising
Last year the Disney Company spent $1.93 billion on
advertising worldwide sending advertisements out to over 50 different
countries. Although Disney spent a lot on advertisements, they are third in top
five film major film studios. Disney’s advertisements on their channels are
mainly made up with ads for their own shows and do not plug products. The only
Disney channel to play ads is Disney XD and the ads are generally for kid’s
toys. Walt Disney Co. spent $1.93 billion on ads;
• TV:
$546 million
• Magazines:
$178 million
• Newspapers:
$88 million
• Internet:
$187 million
• Other:
$933 million
*other includes things such as Radio advertisements,
billboards, and gaming adverts.
Disney still spends an average of two billion dollars a year
worldwide on getting the Disney name hot on the world’s consciousness and to
keep the interest in the company high.
Product Placement
Disney tends to product place in its own work, for example
in the old animated films Mickey Mouse, Donald duck, Goofy would all make
appearances in the background for example they are in the background of Little
Mermaid, Snow white, and Cinderella. Disney
also have product placement on films such as Saving Mr Banks. This also links
very closely with the fact that Disney is a big believer in self-advertisement
and the fact that the company is trying to spare extra expense by keeping the
Disney name in people’s heads.
Private Capital
Disney’s whole company is riding on the stock market. This
is a good way of bringing in profit because if they take a loss then all of the
shareholders take a small hit. This means though when the company earns a
profit the profit is shared amongst its shareholders. This is also a great way
to merchandise the company with fans wanting to own a part of Disney and this
earns Disney and immediate profit. The biggest shareholder of Disney is Steve
Jobs who owns 7% of the corporation despite the fact he is no longer alive. The
average Disney share price is $40 and then once the fee is paid to Disney the
shareholder then would own 0.007% of the company.
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