The Walt Disney Economics: Will It Live Happily Ever After?

By virtue of Walt Disney's unsurpassed imagination and determination, Disney has now become a global empire. The company was able to go from a moderately successful animation studio to a complete entertainment with theme parks, endless merchandising, and a catalog of masterpieces. From classic stories to immersive experiences, Disney has created a magical world that people of all ages will cherish for a lifetime. 

Media entertainment and theme parks have been Disney's major sources of revenue and success. Even with the pandemic, its streaming services have kept many people occupied and entertained at home. 

With the continued rise in subscribers for the streaming service, Disney believes that streaming will also be an important facet of the company's media business. Disney's streaming service, Disney+, is facing some real competition against a large number of competitors including Netflix, Amazon Prime, and HBO Max.

On the other side, as Disney theme parks are striving to recover from their billions of dollars loss in operating revenues due to the coronavirus outbreak, reopening their parks will most likely result in higher operating and marketing spending as well, which poses the risk of a decline in the company's net income if it's not anticipated. 

As written in the last sentence of most of their story endings, will Disney itself live happily ever after?

 

The Making of an Empire

Once upon a time, a Missouri farm boy who was determined to be an artist decided to make a cartoon in Kansas City about a little girl in a cartoon world, called Alice's Wonderland. Not long after that, a distributor in New York, M. J. Winkler, made a contract to distribute the series from his "pilot" film on October 16, 1923, which marks this date as the start of the Walt Disney company. 

While the cartoons were gaining popularity in movie houses, the team saw ways for Disney to maximize its assets through merchandising and launching its own cable network, the famous Disney Channel. As his motion pictures and television programs became successful, he felt a desire to branch out into an amusement park where both parents and children could enjoy themselves. This was the origin of Disneyland, strengthening the family entertainment concept.

Several major additions were later made to optimize its assets once again. Starting with the acquisition of 21th Century Fox and then the remarkable launch of its streaming service, Disney+, which together with ESPN+, Hulu, and Disney+ Hotstar, delivers the company's iconic brands and compelling stories directly to consumers.

How Disney is Making Money and Expanding Its Business

If we look at Disney's latest annual report, the company generated a global revenue of 67.41 billion U.S. dollars in 2021. The company's biggest segment was its media and entertainment segment, which generated revenue of 50.87 billion U.S. dollars. How can it possibly not be their main source of revenue? Disney is famed for its authenticity, enchanting emotions through its storytelling. Their films and characters have a soft spot in most of our hearts.