Content
Content forms the core part of Disney’s growth strategy. Through the reorganization, the company can make sure that there is a steady flow of strong content into all its distribution channels.
Disney’s vast range of assets and its ability to use its brands and franchises across its various segments give it a massive advantage over its competitors. An example of this is the launch of the Avengers Campus attraction at Disneyland Resort and the premiere of the series Loki on Disney+, both of which come from the Marvel universe. This ecosystem model will allow Disney to cross-market its attractions across its various lines of businesses such as across parks and streaming.
Streaming is an important part of Disney’s business. At its recent Investor Day, the company stated that 40% of its sales this year came from streaming and digital. Disney expects total paid subscribers worldwide for Disney+ to reach 230-260 million by the end of FY2024.
The streaming business has given Disney the opportunity to dig into its popular brands and franchises to create fresh content as well as the freedom to present this content through various mediums, be it movies or series. The company believes there is endless opportunity in this space and it has plans to launch new content every week on Disney+. Disney is also focusing on creating local content for its international markets which is another growth driver.
Parks
Parks witnessed a 49% decline in revenues during the first half of FY2021. However, things are expected to pick up once the pandemic wanes and Disney has some elaborate plans for the expansion of this business.
At its Investor Day, the company said it is working on a huge transformation at the Epcot Park at Walt Disney World in Orlando. It also has various attractions planned over the next five years which include a Ratatouille attraction, a night-time show called Harmonious, and a Guardians of the Galaxy: Cosmic Rewind attraction.
Disney will also bring a Zootopia attraction to the Shanghai Disney Resort and a Frozen installation to Hong Kong Disneyland. At the Tokyo Disney Resort, the company has attractions based on Frozen, Tangled, and Peter Pan coming up.
Disney also expects to see some margin benefits from its Parks segment over the long term. The company expects its admissions per cap to benefit from its data-based pricing models as well as the strategic management of attendance across different ticket types.
Shares of Disney have gained 55% over the past 12 months.