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Disney’s Downfall Was Only A Matter Of Time — Mickey’s Too Old.
It’s quite simple — they’re becoming boring.
It’s your Monday; I feel it. Something good’s about to happen.
⏱️ Too lazy to read for 5 minutes? Here’s the TLDR Summary:
📺 Disney Plus, their Netflix competitor, had a 7% subscriber decline last quarter.
📈 Zooming out a bit, Disney’s revenue is growing, but not that much.
🆘 Bob Iger was called in last November to save the company.
🧒🏽 Here’s my question — have you seen a child watching a Disney movie recently?
Let me update you first with this imaginary conversation:
20 years ago
My father: “Hey, son, I got you some Mickey Mouse and Marvel comics!”
Me: “Oh, no, you didn’t! This is the best surprise ever!”
10 years ago
Me: “Hey, son, the Avengers movie is coming out! All the superheroes together. Are you super excited?!”
My son: “Meh, Marvel is so cringe. Can I play with your iPad for a bit?”
Me: “What? No no. You’ll come to watch this. This is good stuff. Come, I’ll explain to you everything about Marvel in 2000 hours.”
My son: “…”
Me: “Where’s my grandson?”
My son: “Right there in the corner doing a TikTok challenge. Kids these days, right?”
Me: “TikTok? What about reading some comics or something?”
My son: “Dude, you’re too old. I didn’t read this stuff. What makes you think the next generation will?”
Me: “But… Wakanda?”
My son: “…”
Now, let’s talk business. Disney, as a company, is struggling.
Their CIO (chief information officer), Diane Jurgens, just departed them.
Their Disney Plus subscriber count is not growing as expected.
Their stock price is the same as it was nine years ago.
But all of these are not really the core problem Disney is going through. Many (and I mean many) analyst websites are predicting that Disney will grow beyond expectations.
I can’t rule this out as a possibility, but it won’t be with the same old Mickey Mouse.
Mickey’s too old — Hence, Disney Plus.
Disney Plus is quite the business story. They developed into a serious threat to Netflix, quite the innovative startup and Silicon Valley baby.
This reminds me of a Slack vs. Microsoft Teams situation. I love this graph, and I keep reminding my readers of it.
Netflix was growing much faster than Slack, of course. It’s a B2C product that is meant for everyone.
But Teams, owned by a giant old corporation, swooped in and damaged the growth of Slack for good.
Netflix was growing, and then Disney started being scared of what Netflix was capable of. It was on point; without Disney Plus, Disney would probably be closing in on their expiration date.
Disney used their big pockets to own a few specialized “minor Netflixes” like Hulu and ESPN+. Their strategy was on point.
But there’s a problem with Disney Plus — It’s too focused and not for everyone.
I would watch a Marvel movie there. But I wouldn’t check it out on a random Saturday evening for a movie night. At the moment, I would go for Netflix or Apple TV+.
Now, the real questions are:
Did the generation after mine get affected by comics that much? In other words, are Gen Z crazy about comics and so?
Did Disney affect Gen Z when they were young? Someone else did. Someone called “Social Media and Technology.
I used to take a Mickey Mouse comic magazine everywhere. Gen Z took their phones everywhere. Disney was still adapting at that moment. So the train passed them.
Now, 20 years later, they don’t have the loyal followers that they used to. I’m still there. But I’m too old to go watch each and every movie. But this is too personal; let’s zoom out a bit.
Revenue is … increasing.
You’d think that with all this doom, Disney’s revenue would be slipping. Well, it’s not. But it’s not climbing most of the time as per Wall Street’s estimates.
The thing is, they’re not Netflix because, well, they’re not Netflix. Their revenue comes from things that are not showing growth in the long run. Let me show you what I mean.
Parks, Experiences, and products are a huge chunk of their revenue (that and media networks like ESPN, for instance.) All of those are not really mediums that are growing, like blockchain, for example.
Their VOD (Video-on-demand) platform, Disney Plus, is what’s showing the most promise, as it could make more money than all of those other methods in the long run.
It would be a shame for them to shut down Disney Park, though.
So, to put the last piece of the puzzle in order, they called in Bob Iger last year; in case you didn’t see him in a MasterClass advertisement, you’ll probably now see him because I mentioned those words (the crazy spying world we live in.)
Iger was Disney’s CEO for 15 years. So when the board freaked out about what was happening, they needed a familiar face to get back to it. They need everything to go back to “normal.”
But Iger is only human; if the core of the problem is not management but the simple fact that “people are not interested in Disney products as much,” then Iger won’t be able to do much.
We’ll have to wait and see. But from what I see around me, I don’t see kids occupied with Disney as much as I used to be. They’re not sitting around watching those cartoons as much. They’re not so crazy about Captain America and the Hulk.
If they skipped a generation this way, then the effects will keep on showing for quite a long time. Iger might have to flip the wheel in a totally different direction.
But let’s wait, see, and enjoy.
Shoot me a comment if you have an opinion about the whole Disney dilemma going on. Are you a fan? Do you not care about them? Do you think it’s management? Let’s have a conversation.
Enjoy the rest of your week!