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Disney and Pixar

Pixar and Disney had disagreements after the production of Toy Story 2. Originally intended as a straight-to-video release (and thus not part of Pixar's three-picture deal), the film was eventually upgraded to a theatrical release during production. Pixar demanded that the film then be counted toward the three-picture agreement, but Disney refused. Pixar's first five feature films have collectively grossed more than $2.5 billion, equivalent to the highest per-film average gross in the industry. Though profitable for both, Pixar later complained that the arrangement was not equitable. Pixar was responsible for creation and production, while Disney handled marketing and distribution. Profits and production costs were split 50-50, but Disney exclusively owned all story and sequel rights and also collected a distribution fee. The lack of story and sequel rights was perhaps the most onerous aspect to Pixar and set the stage for a contentious relationship.

The two companies attempted to reach a new agreement in early 2004. The new deal would be only for distribution, as Pixar intended to control production and own the resulting film properties themselves. The company also wanted to finance their films on their own and collect 100 percent of the profits, paying Disney only the 10 to 15 percent distribution fee. More importantly, as part of any distribution agreement with Disney, Pixar demanded control over films already in production under their old agreement, including The Incredibles and Cars. Disney considered these conditions unacceptable, but Pixar would not concede.

Disagreements between Steve Jobs and then Disney Chairman and CEO Michael Eisner made the negotiations more difficult than they otherwise might have been. They broke down completely in mid-2004, with Jobs declaring that Pixar was actively seeking partners other than Disney.Pixar did not enter negotiations with other distributors. After a lengthy hiatus, negotiations between the two companies resumed following the departure of Eisner from Disney in September 2005. In preparation for potential fallout between Pixar and Disney, Jobs announced in late 2004 that Pixar would no longer release movies at the Disney-dictated November time frame, but during the more lucrative early summer months. This would also allow Pixar to release DVDs for their major releases during the Christmas shopping season. An added benefit of delaying Cars was to extend the time frame remaining on the Pixar-Disney contract to see how things would play out between the two companies.
Pending the Disney acquisition of Pixar, the two companies created a distribution deal for the intended 2007 release of Ratatouille, in case the acquisition fell through, to ensure that this one film would still be released through Disney's distribution channels. (In contrast to the earlier Disney/Pixar deal Ratatouille was to remain a Pixar property and Disney would have received only a distribution fee.) The completion of Disney's Pixar acquisition, however, nullified this distribution arrangement.

Acquisition by Disney
Disney announced on January 24, 2006 that it had agreed to buy Pixar for approximately $7.4 billion in an all-stock deal. Following Pixar shareholder approval, the acquisition was completed May 5, 2006. The transaction catapulted Steve Jobs, who was the majority shareholder of Pixar with 50.1%, to Disney's largest individual shareholder with 7% and a new seat on its board of directors
Jobs' new Disney holdings exceed holdings belonging to ex-CEO Michael Eisner, the previous top shareholder, who still held 1.7%; and Disney Director Emeritus Roy E. Disney, who held almost 1% of the corporation's shares.

As part of the deal, Pixar co-founder John Lasseter, by then Executive Vice President, became Chief Creative Officer (reporting to President and CEO Robert Iger and consulting with Disney Director Roy Disney) of both Pixar and the Walt Disney Animation Studios, as well as the Principal Creative Adviser at Walt Disney Imagineering, which designs and builds the company's theme parks. Catmull retained his position as President of Pixar, while also becoming President of Walt Disney Animation Studios, reporting to Bob Iger and Dick Cook, chairman of Walt Disney Studio Entertainment. Steve Jobs' position as Pixar's Chairman and Chief Executive Officer was also removed, and instead he took a place on the Disney board of directors.

Lasseter and Catmull's oversight of both the Disney and Pixar studios did not mean that the two studios were merging, however. In fact, additional conditions were laid out as part of the deal to ensure that Pixar remained a separate entity, a concern that analysts had had about the Disney deal. Some of those conditions were that Pixar HR policies would remain intact, including the lack of employment contracts. Also, the Pixar name was guaranteed to continue, and the studio would remain in its current Emeryville, California location with the "Pixar" sign. Finally, branding of films made post-merger would be "Disney•Pixar" (beginning with Cars).

How does Disney represent reality?

Disney represents reality in many different ways. By using colourful and interesting characters in a story that ends in a moral or teach, it can educate children and others and teach them right and wrong. Disney tries (and most of the time acheives) to represent real life in a fun way that children and little ones may not be aware of, but they can understand the underlining moral in the story. The company can use enchanted or made up characters such as the 'evil witch' in snow white, the film makes it clear who is the 'goodie' and the 'baddie' and helps children differentiate between right and wrong.
Disney is not always representative of real life and can sometimes be exaggerated, for example, In the majority of films, a woman finds their 'true love' and live happily ever after, however some think that this can lead children into thinking that live will be like a fairytale when the reality is that it's not. Also, for example in Beauty and the Beast,
Belle's father, for example, breaks into someone house, steals from them, and then agrees to trade his daughter for his freedom. Even though he regrets it and returns with an angry mob later in the film, this can hardly be considered "good parenting".

Disney don't try and take this too seriously and always put a lighthearted spin on things.

How Disney uses synergy

The idea of synergy within the Disney company is not new. We see much of it today -- such as cross-branding from The Disney Channel into retail outlets, movie theaters, and theme parks. But this is not a new idea by any means. In 1967, Disney's synergy among its various organizations was alive and well. The company went so far as to create an updated diagram of the creative and marketing links shared within. This was not the first such diagram to be created, but given the time period, it tells many great stories.

Sunday, July 27, 2008
Disney Synergy

The idea of synergy within the Disney company is not new. We see much of it today -- such as cross-branding from The Disney Channel into retail outlets, movie theaters, and theme parks. But this is not a new idea by any means. In 1967, Disney's synergy among its various organizations was alive and well. The company went so far as to create an updated diagram of the creative and marketing links shared within. This was not the first such diagram to be created, but given the time period, it tells many great stories. (click on the image to view a larger version)

The first thing that jumps to attention is that the studios were central to the Disney operation. The studios command the largest amount of real estate on the diagram and have more links than any of the others. In 1967, the company was still deeply rooted in its studio beginnings, and this entity formed the core of all the company's activities.

Other divisions of note include Disney World Florida which was in planning stages, the Mineral King ski resort which never found its way to realization, and the Celebrity Sports Center which was a short-lived recreation center in Denver, CO.

Some of the more interesting synergies:

•Disneyland plugs motion pictures and keeps characters before the public - As much as many Disney theme park purists may dislike the seemingly rapid growth of characters in the parks in the recent years, this was a planned strategy forty years ago. Sleeping Beauty Castle was named while the film was still in production as a means of building interest in the character and story.
•Disneyland and Disney World Florida provide a major sales outlet for merchandise licensing - The company has always carried various souvenirs for sale in the parks, including ones branded with characters from television and film.
•WED master plans, produces audio-animatronics, and imagineers and designs attractions for Disneyland, Disney World Florida, and Mineral King - It is no surprise at WED's involvement in the theme parks that we know today, but the Mineral King ski resort was to be home to a small set of imagineered attractions, as well. The Country Bear Jamboree was originally conceived for Mineral King.
•TV promotes the theme parks and the talents of WED - Walt Disney viewed television as a great promotional tool since its inception. Even after his death, the company still realized the potential that this outlet had in getting audiences excited about the theme parks. We still see this today with such things as the fairly new Disney Travel on Demand series.
•Music, TV, publications, comic strips, studios, and theme parks promote each other through use of characters, stories, and settings - There are many links amongst these divisions that showcase how the company viewed its intellectual assets as a means of advertising and providing source material to other divisions.

Disney Innovations

Walt Disney has been quoted many times as saying he didn't want to lose sight of a very important fact: The entire Walt Disney company began with a mouse. In 1927, Walt and his brother Roy began with a small cartoon studio. In a relatively short time, this little company has rocketed to worldwide fame, and now includes a TV station, a movie production group, many animation studios, theme parks, distribution centers, record label, mall retail shops, and even a cruise line! Currently, Walt Disney is a household name among adults and children alike.

The mission of Disney businessmen and women today is to provide a product so unique, so exciting, and so un-like reality that people will be left with the thought that only the Walt Disney company could have provided such a service, experience, or product. To this end, Disney is working on a variety of creative ways to entertain customers waiting in line, including virtual reality. They also incorporate seasonal marketing into certain rides and shows. For example, Disney merged Tim Burton characters with one of its rides in the Tokyo park with very big success.

Currently, the Walt Disney company is working on several projects to continue to develop with its original mission in mind. Disney is building a monorail in California to whisk tourist from park to park, which include an undersea adventure with the Little Mermaid and the Disney Plaza. The California park is also working to develop several attractions specifically for ill or elderly visitors. MGM Studios is going to become Hollywood Studios, and will include a variety of trendy new things to see, including the American Idol themed attraction. In Orlando, Disney recently dropped a quick $100 million on a roller coaster in Animal Kingdom park that is built on a Mount Everest theme, and they are adding attractions to Tokyo Disneyland as well.

One of the upcoming rides that will be available at both the Orlando and California parks is a ride based on the Toy Story movies. The ride will carry visitors through all types of interesting things, and stop for multiple 3-D viewings. Since the Disney parks are so well marketed and popular, people flock to them from all over the world. This means that any trip to a Disney park involves lots of waiting in line. To help alleviate the pain and boredom this may cause, the Walt Disney company provide costumed characters and a state-of-the art talking and singing Potatohead Man! This particularly piece of singing entertainment cost a million dollars!

What does the Disney brand mean?

The word brand is descrbied as “a name, term, sign, symbol or design, or a combination of them, intended to identify the goods and services of one seller or groups of sellers and to differentiate them from those of competitors.”
A brand can convey up to six levels of meaning- Attributes, Benefits, Values, Culture, Personality and User.
The Disney brand can mean many different things. The first thing you think of when the word Disney is mentioned is colour, characters and a timeless classic. Disney is so well known throughout the world that almost everybody has heard of it. The walt disney brand is something that can get anyone excited, it appeals to all age brackets, most specifically children. Disney is associated with the the famous mickey mouse and the unforgettable logo which you can see above.
The brand has reached so many different platforms of media and continues to grow evermore popular and successful. The billion dollar corporation spans practically every countrty in the world and with its positive and happy personality it continues to be a classic for everyone.

Competition

Amusement Parks & Theme Parks Six Flags Inc
United States of America
Walt Disney
Blackstone Group
Cedar Fair LP
General Electric
Holiday World & Splashin' Safari
InBev
Lotte Shopping

2 Cable TV Content Distribution Subscription Services RCN Corporation
Rogers Communications Inc
Sumitomo Corporation
Telewest Communications
Time Warner
Walt Disney
AT&T
Avista Capital Partners
Cable & Wireless
Cablevision Systems Corporation
Comcast Corporation
Insight Communications
Mediacom Communications Corporation
NTL Group Ltd

3 Hobby Stores, Toy Stores, and Game Stores Vornado Realty
Walt Disney
FAO Schwarz
Brunswick Corporation
Build-a-Bear Workshop

4 Motion Picture Film Wholesale Distribution Walt Disney
Cablevision Systems Corporation
Lions Gate Entertainment

5 Resorts / Family Entertainment Resorts Walt Disney
InterContinental Hotels Group PLC

6 Resorts / Vacation Resorts Starwood Hotels and Resorts
Swissotel Hotels & Resorts
Walt Disney
YTL Corporation Berhad
Fairmont Hotels and Resorts
Four Seasons
Blackstone Group
CapitaLand
Choice Hotels International
Grand Sierra Resort
Harrah's Entertainment
Marriott International

7 TV Broadcasting Channel Package Distribution Wholesale Services Si TV
Televisa
Univision Communications Inc
Walt Disney
CBS Corporation
General Electric
GolTV
News Corporation

8 TV National Broadcasting - US+CA Content Distribution Services Walt Disney
CBS Corporation
General Electric
News Corporation

9 TV Show Production - All Genre Time Warner
Walt Disney
News Corporation

10 TV Shows / Sports - Professional Sports Shows Walt Disney
General Electric

Scope of operations etc.

Walt Disney Opening Disneyland in 1955:

Scope of operations;
Disneyland: On a business trip to Chicago in the late-1940s, Disney drew sketches of his ideas for an amusement park where he envisioned his employees spending time with their children. He got his idea for a children's theme park after visiting Children's Fairyland in Oakland, California. This plan was originally meant for a plot located south of the Studio, across the street. The original ideas developed into a concept for a larger enterprise that was to become Disneyland. Disney spent five years of his life developing Disneyland and created a new subsidiary of his company, called WED Enterprises, to carry out the planning and production of the park. A small group of Disney studio employees joined the Disneyland development project as engineers and planners, and were dubbed Imagineers.

When describing one of his earliest plans to Herb Ryman (who created the first aerial drawing of Disneyland which was presented to the Bank of America while requesting for funds), Disney said, "Herbie, I just want it to look like nothing else in the world. And it should be surrounded by a train."[76] Entertaining his daughters and their friends in his backyard and taking them for rides on his Carolwood Pacific Railroad had inspired Disney to include a railroad in the plans for Disneyland.
Later on in the future Walt Disney expanded into many new parks, including Disneyland based in Paris.
Operations got bigger as the park became more successful, things got bigger and better.

Key areas of business;

The Walt Disney Studios
The Walt Disney Studios is the foundation on which Disney was built, and at its heart are world-renowned animated features and live-action motion pictures. With the creation of Mickey Mouse and Snow White and the Seven Dwarfs, the world's first full-length animated feature, the Disney name quickly became synonymous with quality entertainment for the whole family.


Parks and Resorts
Disney's Parks and Resorts is not just home to Disney's beloved characters but the place "Where Dreams Come True." The segment traces its roots to 1952, when Walt Disney formed what is today known as Walt Disney Imagineering to build Disneyland Park in Anaheim, California.

Disney Consumer Products
Disney merchandising began in 1929 when Walt Disney was approached by a businessman interested in placing Mickey Mouse on the cover of a children's writing tablet. Disney Consumer Products and affiliates (DCP) extend the Disney brand to merchandise ranging from apparel, toys, home décor and books and magazines to interactive games, foods and beverages, stationery, electronics and fine art. This is accomplished through DCP's various lines of business which include: Disney Toys, Disney Apparel, Accessories & Footwear, Disney Food, Health & Beauty, Disney Home and Disney Stationery.


Media Networks
Media Networks comprise a vast array of broadcast, cable, radio, publishing and Internet businesses. Key areas include: Disney-ABC Television Group, ESPN Inc., Walt Disney Internet Group, ABC owned television stations, and a supporting headquarters group. Marketing, research, sales and communications functions also exist within the segment.

Turnover:

A newspaper report from the independant in 1994;

EURO Disney's turnover slid in the six months to the end of March, dropping 12 per cent to Fr1.57bn ( pounds 185m) and adding urgency to the troubled Paris theme park's refinancing of its Fr20bn debt.

The park admitted that not all of its bankers had agreed to its proposals. So far bankers representing 90 per cent of its debts have signed a memorandum of agreement on the restructuring. Euro Disney says a sufficient number have also agreed to underwrite more than half - Fr3bn - of the proposed offering. The company said it hoped to call an extraordinary meeting shortly to approve the deal.

The restructuring includes a Fr6bn rights issue in early summer. About 51 per cent of the issue would be underwritten by the banks, with the remainder being guaranteed by the giant Walt Disney corporation of the US, which owns 49 per cent of the company. In addition the plan includes interest payment forgiveness, and deferral of principal payments.

In a recent innovation, Euro Disney is also planning to offer all shareholders, including Walt Disney, 10-year warrants to purchase shares at Fr40.

Despite the slide in turnover the first-half operating loss was cut from Fr1.18bn to Fr1bn after a 25 per cent reduction in costs and lower interest rates.

The net loss fell much more dramatically, from Fr4.2bn to Fr1bn, because of a change in accounting for start up costs, which meant a special one-off Fr3.2bn charge the previous year. The share price slipped 15p to 363p.


Profits;


The monarch of this magic kingdom is no man but a mouse -- Mickey Mouse. The Walt Disney Company is the world's #2 media conglomerate (behind Time Warner) with assets encompassing movies, television, publishing, and theme parks. Its TV holdings include the ABC television network and 10 broadcast stations, as well as a portfolio of cable networks including ABC Family, Disney Channel, and ESPN (80%-owned). Walt Disney Studios produces films through imprints Walt Disney Pictures, Touchstone, Pixar, and Miramax, while Marvel Entertainment is a top comic book publisher and film producer. In addition, Walt Disney Parks and Resorts operates the company's popular theme parks including Walt Disney World and Disneyland.

Key numbers for fiscal year ending September, 2009:
Sales: $36,149.0M
One year growth: (4.5%)
Net income: $3,307.0M
Income growth: (25.3%)

Origins of Disney

Walter Elias Disney (December 5, 1901 - December 15, 1966) was a famous American entertainer, inventor, cartoonist, and entrepreneur. Along with his brother Roy Disney, he was the founder of Walt Disney Productions (now The Walt Disney Company). He is known as the father of modern theme parks.

Disney's best-known creation is the cartoon character, Mickey Mouse. Disney even provided the voice for Mickey Mouse for many years. Donald Duck is another famous creation. Minnie Mouse and Pluto are also his creations.

Walt Disney began as a cartoonist in the 1920's after serving in World War I. He created Oswald the Lucky Rabbit but lost ownership of the character due to a contract problem. He then created Mickey Mouse. Walt Disney started the Walt Disney Studios and created the first full length animated movie when he created Snow White and the Seven Dwarves. The movie was a huge success. The money from the movie helped Disney create many more cartoons and movies. He earned 32 academy awards.