Q Globalization: How will it affect our economy in the coming 12 months? Your thoughts on how it will affect your business sector.
A Globalization will continue apace, leading to ever greater consumer sophistication and opportunity, particularly in emerging markets like China, India and Russia. The potential upside for American industry is enormous, but only if smart investment is made now to build our brand identity and secure shelf space for the future.
Disney has a great strategic advantage in that it is a truly global brand and one that is identified with happiness and imagination. We have long had an important presence in Europe and Japan and are now moving to take advantage of increased openness in the developing world. We have laid the groundwork in China, for instance, through the opening of Hong Kong Disneyland and the premiere of our “Lion King” stage play in Shanghai. We believe we will reap great benefits in China and other emerging markets in the years to come.
In doing so, though, we are critically aware of the importance of adapting our products in accordance with local tastes and market trends. Without sensitivity to different social, political and economic dynamics, languages, infrastructure and other factors, no company can tap into the vast opportunities afforded by globalization.
Q How does the American image internationally affect your business sector?
A In many ways, the nostalgic, romanticized idea of a Hollywood movie, a Disney animated feature or even Disneyland is more a state of mind than anything else. Our creative products aim to transcend socioeconomic conditions, politics, borders and geography.
As entertainers, it’s our job to evoke emotions, allowing people of all walks of life to laugh, cry and hope together, and it’s very important that we maintain that common thread. In the end, it’s all about outstanding storytelling, a commitment to quality and an innovative spirit. These are the often intangible factors that have the greatest material impact on the image of entertainment companies. For Disney, with its array of iconic, universal characters from Mickey Mouse to the Little Mermaid and Jack Sparrow, that’s particularly true.
Q How do you define the nature of your business? Do recent economic trends require you rethink that definition?
A Disney is a company that creates entertainment products based around three core brands — Disney, ESPN and ABC. We invest in high quality content and we distribute it across multiple businesses, distribution platforms and markets. That’s been our business strategy for quite sometime and while we are confident we have our priorities straight, we always keep a close eye on the evolution of industry and consumer trends.
For Disney, creativity is the constant that drives everything we do. We tell compelling stories, create endearing characters and introduce imaginative worlds that consumers want to visit over and over again.
What is changing rapidly is how customers get a hold of the content we produce. Nowadays, they have much more choice over when, where and how they enjoy it and how much they pay for it. That gives the consumer the upper hand in all kinds of ways. It also, however, provides a tremendous opening for companies that understand and act on these changes.
Q Consumer technology: How is your company integrating Internet-based New Media in your marketing, employment and product development areas?
A Technology allows us both to display and deliver our creative content in all sorts of new and exciting ways. We are still learning — and learning fast — about consumer behavior in this brave new world of multiple distribution platforms. We are also learning plenty about the digital pirates who are equally adept at rapid adjustment.
The key is to come up with high-quality, easy-to-use and legitimate ways for consumers to get the media they want. And Disney has been a pioneer on this front. We were the first to make popular TV shows available on iTunes. We’ve made much of our programming accessible through ABC.com, ESPN.com and DisneyChannel.com. And just a few weeks ago, Disney became the first studio to put movies up for sale digitally at the same time they are shipped as DVDs.
More is coming too. In January, we will unveil a terrific redesign of our flagship Internet site, Disney.com, that we believe will be a huge hit with our customers.
The bottom line here: Keeping pace with consumer appetites is an ongoing challenge that doesn’t lend itself to quick fixes. With constantly emerging distribution platforms and changing behavior, we have to be smart and nimble enough to recognize and take advantage of both.
Q What is the most important resolution you have made about your business as we go ahead into a new year?
A The combination of high-quality content and strong brands creates infinite opportunity for Disney, whether it’s on new technology platforms or in new geographic territories. I think consumers, particularly as their choices continue to increase dramatically, gravitate toward brands they know and brands that stand for quality.
The Disney name covers both criteria. We had great results in the past year with such properties as “Pirates of the Caribbean,” “Cars,” “High School Musical” and “Grey’s Anatomy.” Now we plan to take that content — and all the wonderful new things we are coming up with — and make it available on new and traditional worldwide distribution platforms. I am confident audiences will follow.
Q What is your advice to the business community on how to survive and profit from the coming 12 months?
A It is essential to have a clearly stated, well-defined vision of where you want your company to go, a strong management team to lead the way and a firm understanding of market conditions and variations. The riskiest thing you can do is succumb to the lure of complacency.
There’s an inherent risk to exploring things like new creative ideas, new technologies and new, unknown global markets, and we’re not going to be right all the time. But risk is the path to growth. That’s why we’ve expanded beyond traditional distribution avenues to offer our “Lost” and “Desperate Housewives” on ABC.com and why “Cars” will be available for download the same day it gets sent out to your local video store.
This strategy has been criticized by our traditional content distributors, who have been terrific partners and created tremendous value with us. But, frankly, a lot of people would love for things not to change and Disney simply can’t afford to share that point of view. The reality is that consumers today don’t think about business models and distributors. They want access to content at the right time and the right price. Today’s world gives them the ability to exercise that right much easier than ever before. We can choose to listen or lose … at Disney, we’re listening.
High Praise for Iger
MarketWatch last week named Walt Disney Co. Chief Executive Officer Robert Iger as its CEO of the Year, noting that “with a blend of bold strokes and olive branches, Robert Iger has re-imagineered the Walt Disney Co. and reanimated its stock.”
Part of Examiner’s The American Economy series.
