Today we are launching the latest report in our Skift Research Reports service, A Deep Dive Into Disney’s Competitive Position In Travel.
This report looks at travel through the lens of Walt Disney World Resorts and its relative successes in cross-monetizing its different business units. The cross-monetization blueprint laid out in the report offers key insights for theme park operators, hoteliers, marketers, online and offline distributors, and cruise operators.
Disney’s ability to monetize its intellectual property across segments serves as a unique source of competitive advantage. The studio business has had extraordinary success following its acquisitions of Pixar, Lucasfilm, and Marvel, which is leading to a boom at the parks and resorts segment.
Star Wars: The Force Awakens set the tone at Lucafilm with over $2 billion at the box office and massive park expansions coming in California and Florida.
Pixar was a perfect fit for Disney’s content monetization machine with the Toy Story franchise being prevalent throughout the theme parks and more expansion to follow. The Cars franchise was monetized at the parks especially well in California.
The Marvel franchise has dominated the superhero genre both monetarily and critically, but due to contractual issues (we explain this in great detail in the report), Disney has not yet fully monetized these assets at the parks.
After a bit of a slump in the early 2000s, Walt Disney Animation Studios produced the top animated film of all time in Frozen followed closely behind by Zootopia; both films exceeded $1 billion at the box office, were critical successes, and led to a boom in consumer products sales with park expansion following suit. Moana is poised to continue this trend.
Meanwhile, the legacy franchises like Mickey Mouse, Winnie the Pooh, etc., remain “new” to each generation of children. The character experiences at the parks reinforce the Disney brand and licensing consumer products is a very a lucrative and high-margin business for Walt Disney.
While Disney has the most valuable pool of content assets to monetize, other companies can, and have, started to follow in Disney’s footsteps. Comcast, which owns Universal Studios, has seen tremendous success at the Harry Potter lands, but that content was not created by Universal. Instead, the company partnered with Time Warner’s Warner Brothers Studio. In August 2016, Comcast closed its $3.8 billion purchase of DreamWorks Animation bringing the Shrek, Kung Fu Panda, and How to Train Your Dragon franchises in-house. We believe that Comcast will monetize these assets effectively at the Universal Studios parks in the coming years.
While most hospitality companies do not have the deep pockets or inclination to buy a content company, we’ve noted a rise in these mutually beneficial partnerships occurring in the industry. These partnerships could be content-driven, but also may be simply combining loyalty and branding across complementary assets.
As a deep strategic and financial analysis of the parks and resorts segment, prospective and current investors in Disney will gain insights into a key part of the Walt Disney company that tends to be less focused on than the movie and television businesses by traditional Wall Street research. With no earnings estimates to worry about, we are able to focus on the much longer-term outlook and provide an independent view of the segment.
In partnership with ForwardKeys, we provide an outlook on booking trends impacting tourism into Disney’s key theme park markets. Hotels and tourism boards will benefit from ForwardKeys proprietary data and Skift’s travel expertise shedding light on what it means for the hospitality industry in the Orlando, Los Angeles, Hong Kong, and Paris regions.
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