Stupid Company Tricks

Did you hear that Disney (NYSE: DIS  ) is doing away with its Disney Magazine just as the company is kicking off its year-and-a-half-long Disneyland birthday party throughout its theme parks? The glossy quarterly read had a reasonable circulation -- I've read reports claiming that it was as little as 500,000 to as high as a million subscribers. More importantly, unlike the surprisingly unbiased Family Fun publication that Disney will keep producing, this was the ultimate promo pimping machine in the Disney marketing arsenal.

As a colorful look at the company's new movies, theme park attractions, and retail releases, the magazine was practically given away with dirt-cheap subscriptions. But that shouldn't have mattered. It was a valuable resource in the homes of families that were Disney's biggest fans.

I wasn't pleased when Disney discontinued its Magic Kingdom Club program, which was free for its shareholders and corporations, but I understood the financial basis for morphing that plan into its premium Disney Club offering. Then Disney Club bit the dust when the family entertainment giant realized that there was more monetary pixie dust to be snorted by disbanding Disney Club and funneling its members into Disney-branded credit card plastic.

But what possible explanation can there be to do away with such an effective quarterly promotional tool?

It's not just Disney that isn't making much sense these days. Over just the past few months, I have been wondering out loud about some other seemingly boneheaded corporate moves. Consider some of the other shortsighted decisions being made:

  • In January, Kodak (NYSE: EK  ) sold its Aunt Minnie. Okay, technically it's AuntMinnie.com, a popular site for professional radiologists. Think about this one a bit. While Kodak is trying hard to matter in the growing world of digital photography, the profits that it counted on from its film and photofinishing business just aren't going to be realized in the digital space. That's why the company has also been emphasizing its steadier medical imaging business. Don't you think that owning an edgy and active community site would be vital to the company's growth in radiology? Of course. Aunt Minnie should never have gone away.
  • Back in February, Martha Stewart Living Omnimedia (NYSE: MSO  ) closed its online store, save for a few operations like its lucrative floral business. Explain this one to me. Stewart was just weeks away from her prison release. In the fall, she will have not one but two prime-time television shows on NBC. If her visibility is about to skyrocket, shouldn't the company be enhancing and expanding its online e-commerce possibilities instead of closing things down?
  • Also in February, Viacom (NYSE: VIA  ) announced that its Paramount Parks business was on the block. Viacom is an entertainment company. It needs to market its Paramount movie products as well as its many cable properties, like MTV and Nickelodeon. With its chain of parks generating turnstile traffic of well over 10 million, the last thing the company needs is to lose contact with a crowd that consists of the ideal demographics for its other products. Thankfully, I've had someone write to tell me that the company is no longer interested in selling its parks. Finally. Sanity!

Let's hope it's contagious.

Some more recent Disney-related headlines:

  • Disneyland's 50th anniversary has the makings of a great year for Disney; you just won't be reading about it in Disney's namesake magazine.
  • When Disney launched its credit card a couple of years ago, it did seem like a Goofy deal.
  • Share your thoughts in our legendary Disney discussion board.

Longtime Fool contributor Rick Munarriz has owned shares of Disney since the 1980s and is at the parks often.The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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