Disney
After being lauded for being named the top CFO in the entertainment industry by Institutional Investor magazine, Staggs addressed the three areas of focus that were outlined by Disney at last year's conference: creating and nurturing branded content, leveraging technology, and globalization.
Creating and nurturing branded content
Fiscal 2006 was a good year for Disney on the creative front. Pirates of the Caribbean: Dead Man's Chest and Cars remain the top two films of the year. High School Musical has been another winner from an unlikely source, amassing 85 million viewers through several Disney Channel screenings.
That success will continue to play itself out in the current quarter with Pirates and Cars on DVD, even though there were some areas where Disney was perhaps too good in fiscal 2006. A record 2005 holiday season at Walt Disney World and the success of Disneyland's 50th anniversary celebration set a high standard for the company's key theme parks division here in its first fiscal quarter of 2007.
The company has also tugged at the reins of what had become a frenetic pace of theatrical releases. Under Disney's new approach, the company will produce Disney-branded live action films, targets two new animated releases a year, and release 10 annual low-budget offerings from Miramax.
Another challenge for 2007 will come from consumer products; there, the company has less recognized guaranteed revenue coming in than it did in 2006. Meanwhile, ABC is no longer broadcasting the popular Monday Night Football games; still, when you adjust for those lost ratings, ABC has been able to improve on its healthy ratings from a year ago. Ad rates have also inched higher, and it's not as if Disney isn't cashing in on Monday Night Football anymore. The game has simply moved on over to Disney's ESPN, where, according to Staggs, it is "actually outperforming our expectations in terms of both viewership and the ad rates that we're seeing."
Leveraging technology
The convergence of old and new media continues to play itself out for the industry as a whole and Disney in particular. The company has sold $25 million worth of movies through Apple's
This accompanies other technologically enhanced efforts, including next month's relaunch of Disney.com, the early success of its Disney Mobile offering, and what will eventually be a pair of digital studios over at ESPN.
Globalization
Even though we are still years away from the day when Disney's overseas growth will outpace its domestic production, Disney continues to broaden its reach worldwide. In some markets, like Europe, it has been simply a matter of cashing in on properties like Pirates or Narnia that translate well. In other markets, Disney has had to take a more country-specific tact.
In China, Disney has been leveraging its presence in different ways. Whether it's reaching potential consumers through Dragon Club -- a television program that reaches 250 million households in the world's most populous nation -- or building out Disney Corners (4,000 small retail outlets that sell branded merchandise), the family entertainment leader has more going on in China than just the theme park that opened last year.
Over in India, Disney has hit the small screen with aplomb. Between Disney Channel, Toon Disney, and its recently acquired Hungama, the company reaches 25 million homes in the world's second-largest country. Even though Staggs says that it's still "a long ways off from a theme park being viable in India," the push toward greater globalization continues.
The moves have paid off in at least one way, as the company's consumer products division is now generating more than half of its revenue outside of the United States. That contrasts nicely with rival Viacom
It all started with a mouse
Global real estate left to conquer. A healthy pipeline of 2007 releases that include the third installment in the Pirates series and Pixar's Ratatouille. Digital advances that continue to give Disney incremental revenue streams.
It's shaping up to be another good year for Disney -- and Staggs -- as the company's stock reaches highs last seen six years ago. It's winning in all three areas of focus. In theory, that should be good enough to win the war.
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Longtime Fool contributor Rick Munarriz enjoys taking his family to amusement parks of all sizes, all over the country -- including Disney World several times a year. He owns shares in Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. T he Fool has a disclosure policy.
