2019，Undoubtedly another highlight moment for Disney at the age of 96。

December 9，Disney announced，The total box office of its films exceeded 10 billion US dollars that year - this is also the history of world cinema，For the first time, a single film company’s annual box office reached the peak of tens of billions。

Among all the movies that reached the "billion dollar" global box office this year，Only "Joker" produced by Warner Bros. has nothing to do with Disney，There are 6 "Avengers 4" movies left (27.US$9.8 billion)、"The Lion King" (16.USD 600 million)、"Captain Marvel" (11.USD 300 million)、"Toy Story 4" (10.USD 700 million)、"Aladdin" (10.USD 500 million)、"Frozen 2" (12.USD 1.8 billion) are all owned by Disney。

Disney has firmly ranked first among the six major film companies since 2016. Data source: Marvelfan，Guotai Junan Securities Research

What’s even more exaggerated，If you include 20th Century Fox, which was recently acquired by Disney，Disney’s box office share in North America in 2019 is close to 40%，Almost Warner、Sum of Universal and Sony。

And Disney’s sphere of influence is not limited to the film industry.

From theme parks to derivatives sales，From streaming media to IP authorization，Disney is a well-deserved global media kingdom。

All business success，There are traces to follow。What we are more interested in is，Disney is a genuine century-old store，Why can we still launch anime characters like Princess Elsa in Frozen that are loved by children all over the world？The animated film "Nezha: The Devil Boy Comes into the World" was the first to break 5 billion yuan in box office in China last year，And the recent Bilibili New Year’s Eve party that caused a sensation on the Internet，Is this a signal of the rise of China’s media giants？

Special topic of this issue of Guotai Junan's "The Power of Brand"，Our United Nations Taijunan social service team，Focus on entertainment giant Disney，Revisiting its century-old history of ups and downs。

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Discover opportunities and continue to innovate

The secret of Disney’s rise

Xiong Sanmu, co-founder of Hewhale Capital, once described why China’s entertainment industry may be facing the same opportunities as the U.S. industry exploded:

During the economic downturn，American entertainment giant Disney ushered in its rapid development。It costs depressed Americans just 10 cents，You can enjoy entertainment services for a long time in the cinema。

Previous late 20s，The United States is in deep financial crisis。However, the film industry ushered in a huge explosion，Especially Disney，The purpose is to create happiness，Seize the great opportunity when people need happiness when they are depressed，Became the only remaining bright spot in the gloomy American economy at that time。

To analyze Disney’s success that year，Innovation 188bet app is an important reason that must be mentioned——

When all companies are focusing on making silent cartoons，Walt pioneered the use of sound in the cartoon "Steamboat Willie"，Mickey Mouse became a blockbuster from then on。

Color film is still in the stage of small-scale experiments，Walt also had a unique eye for using color films in cartoons for the first time，Produced Disney's first Academy Award-winning film "Flowers and Trees"。

In the cartoon, it is only a supporting role for eight minutes、When everyone thinks no one wants to spend 80 minutes watching a cartoon，Walt breaks the rules，Created "Snow White and the Seven Dwarfs" which opened a new chapter in the field of animation。

With this series of innovations，Disney movies become famous。

In the 1940s and 1950s，Due to the outbreak of World War II，Most of the popular films at that time were films showing patriotic enthusiasm，Disney’s animated films also encountered bottlenecks during this period。

And after World War II，"Baby Boomer Generation" is born，Mass media returns to the entertainment era，Walt discovered that a large number of people who went to Hollywood wanted to meet stars，And they always come back disappointed。In this case，He changed his strategy in time，1955，The world’s first Disneyland—Disneyland in California was established。

The emergence of Disneyland is another major success of the company’s innovation strategy，And lay a solid foundation for Disney to become an entertainment media kingdom in the future。

02

"Thanos" style merger

Disney’s secret to dominance

Time flies to March 18, 2019，Disney announces acquisition of 20th Century Fox Pictures，Change its Fox Film Corporation、Fox Television Division、FX cable channel、National Geographic Channel and other assets are embraced。

This is not the first time Disney has made a big acquisition of a competitor.

In fact，This is Disney’s successor to Pixar animation、The fourth studio acquisition after Marvel Studios and Lucasfilm。

2006、2009 and 2012，Disney with US$7.4 billion respectively、US$4.2 billion and US$4.1 billion acquired Pixar Animation、Marvel Studios and Lucasfilm，This allows Disney to expand the boys' market and the adult market，Greatly enriched the Disney movie IP resource chain - the old animation IP belongs to Pixar to take over，As for live-action movies，Marvel’s superhero series and Lucas’s Star Wars series are the most famous science fiction series IP in the world。

Take Pixar as an example，It was co-founded by Apple founder Steve Jobs and Ed and John of Lucas Computer Animation Studio。

Back in 1991，Pixar began cooperation with Disney。1995，The world's first fully computer-animated feature film "Toy Story" produced by Pixar is released，Global box office reached 3.USD 600 million。"Finding Nemo" and "The Incredibles" produced in 2003 and 2004 are also landmark works of animated films。

2006，After Disney acquired 40% of Pixar shares in a stock exchange for US$7.4 billion and became the largest shareholder，The subsequent "Toy Story 3" became the first animated film to exceed $1 billion at the global box office。

Marvel, another successful acquisition target, is one of the two major comic book giants in the United States。

Early，Marvel’s film copyrights are mainly licensed to third parties，But even if the movie 188bet Online Sports Betting and Casino based on the comic book is a hit，Marvel’s box office share is also very low，It established a subsidiary in 1996 to engage in film and television creation。

Since almost all of Disney’s business is closely related to animated content，And superhero images such as Spider-Man have formed a certain competitive relationship with children’s cartoon images such as Mickey Mouse，Acquiring Marvel will not only offset this threat，It can also expand intangible assets with more than 5,000 comic characters owned by Marvel，Create more opportunities for substantial long-term growth and value in the future。

The last acquisition target, Lucas, is a film company that occupies the ace position in the history of American science fiction movies。1977，Lucas' epic masterpiece "Star Wars Episode 1" is released，Global box office up to 7.USD 700 million，Lucasfilm also cultivated a large number of "Star Wars fans" in the following decades。

1977-2012，The total investment in the production of the Star Wars series in the 35 years since its birth is approximately US$400 million，And global box office revenue reached $4.4 billion，Derivatives revenue exceeds $20 billion。

After Pixar and Marvel，The acquisition of Lucas will help Disney expand in the field of science fiction，Enrich its layout in film and television genres。

Although these three acquisitions cost Disney a total of US$15.6 billion，But clearly worth the money。

Production team with different strengths，Plus Disney’s original studio，Formed a gathering of talents from Disney’s film and television entertainment sector、Everyone has his or her own strengths，Consolidating Disney Pictures’ status as a giant。Precise acquisition and good integration，It is also an important driving factor in Disney’s dominance。

03

11 big IPs

The key to leveraging more than half of Disney’s revenue

Start from IP，Sheng Yu IP，Disney is a typical example of utilizing IP to the extreme。

Judging from the 2015 financial report，Disney’s revenue directly generated from IP includes theme parks (30.8%）、Film and television entertainment (14%)、Consumer goods (8.6%) and interactive media (2.2%)——It can be said that IP drives more than half of Disney’s operating income。

"Frozen" released in November 2013 set off a global ice and snow craze，Gained 12 in the global market.$800 million box office，Won the box office championship in the history of animated films in one fell swoop，Also won the 2013 Golden Globe Award、Annie Award、Oscar for Best Animated Record and other awards。

And "Frozen" also had a huge impact on Disney's revenue in 2014，CEO Robert Iger specifically mentioned the contribution of "Frozen" in the "Letter to Shareholders" at the beginning of the 2014 financial report:

Driven by the global box office success of "Frozen"，Disney services revenue increased by $3 billion，reached 400.USD 200 million。

With the unprecedented success of "Frozen", we have a glimpse of Disney's profit model that drives the entire industry chain through IP - the round revenue model。

# First round of revenue: film box office

Disney’s strong IP creation and development capabilities are the core of Disney’s entire industry chain。"Frozen" was released in November 2013，Released in July 2014，Last 238 days。Realized US$400 million at the U.S. box office，Global 12.$800 million box office，The production 188bet Online Sports Betting and Casino cost of "Frozen" is only 1.US$500 million。

Only this video，brought Disney more than 1 billion US dollars in profits。

# Second round of revenue: DVD and pay TV/website

Disney domestic and global home entertainment releases typically follow 3-6 months after theatrical release in each market。

Home entertainment releases are generally released in physical form (DVD and Blu-ray) as well as electronic formats。

The American DVD version of "Frozen" was officially launched on March 18, 2014 (108 days after the global theatrical release，about 4 months)。As shown by Amazon，First week of "Frozen" Blu-ray DVD release，Sales volume reached 7.16 million，The total annual DVD+BD (Blu-ray DVD) sales reached 1826.50,000 sets，Another 3 for Disney.USD 3.8 billion revenue。

# The third round of income: integrating IP elements into the theme park

Every Disney movie released，New movie characters will be added to Disneyland。

The popularity of "Frozen"，It also made "Frozen" themed attractions available in various Disney parks。

At Disneyland in Los Angeles in 2014，Added snow-covered Frozen cabin and talking Olaf。And in the traditional program float parade，The protagonist of "Frozen" also appeared first。Also，Every night from early November 2014，The protagonist Elsa of the cartoon will use her magic to turn Disney’s signature Cinderella Castle into an ice palace。

This series of ice and snow elements has greatly increased the admission rate of Disneyland。

Theme park and resort revenue increased 7% in fiscal 2014，Among them, the revenue in the United States increased by 8%，Average spending per customer increased by 5%，The number of tourists increased by 2%。

# The fourth round of income: derivatives

1、Consumer goods: "Frozen" has made a significant contribution to the consumer goods sector， Disney’s licensing and publishing revenue grew 13% in fiscal 2014，Retail and other segment revenue increased 11%。

In addition to traditional consumer derivatives，Disney also released 16 new Frozen-themed food and medical health products for "Frozen"，Includes fresh fruit and grapes、Juice、Yogurt、Home-use OK bandage or even dental floss。

The sales revenue of heroine Princess Elsa doll in the United States reaches 26 million US dollars。The "princess dresses" worn by the protagonists Anna and Elsa in the movie have sold a total of 3 million units in the United States，Price 149 per item.USD 95，Created approximately $400 million in revenue for Disney。

2、Theme game: After the success of "Frozen"，Disney on your smartphone、Develop related games "Frozen: Fun" for tablets and social networks，Ranked among the top ten downloads in the Apple App Store。Disney’s game revenue in fiscal year 2014 increased from 8.$1.2 billion grows to 10.US$5.6 billion，Increased by 2.US$4.4 billion，Mainly due to the 24% increase in sales revenue of stand-alone games driven by peripheral games of "Frozen"，Social network games and mobile games increased by 10%。

3、Music soundtrack: The "Frozen" soundtrack has been in the top ten of the Billboard charts for 39 consecutive weeks since December 28, 2013，It even topped the list for 13 non-consecutive weeks, breaking the previous record of 10 weeks at the top of the list set by "The Lion King" in 1994.，Becomes the most number-one animated soundtrack in history - of course，The Lion King also belongs to Disney。

"Frozen" original soundtrack became the best-selling album in 2014 with sales exceeding 10 million，Based on $10 per album，Frozen soundtrack will bring Disney more than $100 million。

4、Broadway stage play: Disney announced that it will bring "Frozen" to the Broadway stage in the spring of 2018，In this way, you can earn income through tickets。Previously，Disney has released the hit animated film "The Lion King"、"Beauty and the Beast" and others were brought to the stage。The Lion King has been on Broadway for nearly 20 years，Total ticket revenue has exceeded US$6.2 billion，Annual revenue exceeds US$300 million。

# Fifth round of income: box office income of series of movies

One of the magic weapons in the current movie market is series - the launch of sequels to popular movies，Not only can you save a lot of publicity costs，It can also make the movie IP last forever。Animation IPs like Frozen are even more valuable，Because animated characters will not ask for higher wages when filming sequels。

Frozen 2, released in 2019, once again exceeded $1 billion at the global box office，Not only became Disney’s sixth film to hit 1 billion this year，It also successfully awakened the love of Princess Elsa among children around the world。

This is it，The new round of income for this IP can start again...

04

Enter the game

Disney’s collapse

But under the halo，Disney has also gone through detours in its development。

Early，Disney only enters the game market through brand licensing，For example，When a new movie is about to be released，Disney will contact a game development studio and a publisher，Authorize them to develop and distribute game versions of the movies。

Great success due to brand licensing for game companies，Disney decided to increase investment，Acquire and form your own video game team。

But because Disney’s management is very risk-averse，They are good at movies、Operation of process-based products such as TV series，The game burns money quickly but makes money slowly，And it is impossible to predict the success rate of game products，So Disney’s game projects are always unsatisfactory，In the ten years from 05 to 2015，Disney acquires and closes at least 6 game studios。

According to the company’s financial report，In the past few years，Disney invests billions in video game business but continues to lose money，It was not until 2014 that it became profitable，The main reason for turning losses into profits is that the market performance of "Disney Infinity" is acceptable，But this game has also stopped operating，And the company has successively closed several previously acquired game studios。

2016，Disney announced that it will stop all independent research and development and distribution of game business，Changed to authorized operation。

05

Sniping Netflix into streaming media

Disney’s next ambition

In the past 90 years of development，Disney has experienced the challenges of several business changes，We are also constantly acquiring new companies to adapt to the development of the new era。

In interactive media，Disney established DisneyFamily.com (2007) and Disney YouTube Channel (2011)，Purchased 32% equity of Hulu Video (2009)，And transform to new media。

2009，Disney spent approximately US$35 million to acquire a 29% stake in the video website Hulu，2012 due 188bet Online Sports Betting and Casino to Hulu redeeming part of shareholders’ equity，its shareholding ratio further increased to 32%。

Hulu’s core competitive advantage is behind NBCUniversal、FOX and ABC provide it with a steady stream of genuine movies and TV series online，Making it one of the most commercially successful video websites。

March 2019，While acquiring 20th Century Fox，Disney also conveniently acquired 30% of its shares in Hulu，Thus increasing the stake in Hulu to 60%，Became the majority shareholder of this streaming media platform。

For all of Hollywood，Streaming media is the biggest threat facing the entire industry—from cable TV to theaters，Traditional distribution channels are being subverted by Netflix。

People are going to theaters less often，And on the TV screen，"Game of Thrones"、There are more and more blockbusters like "House of Cards"。

Therefore，For the current Disney，The streaming platform “Disney+” is the top priority。

November 2019，Disney video service “Disney+” officially launched，And took an offensive stance against Netflix - Disney+ service membership is only $7，Equivalent to about half of Netflix。

In other innovative businesses，In 2015, Disney and Chinese Culture from Shanghai led the investment in Jaunt, a VR company located in Silicon Valley, USA。And VR is considered to be the next technology to change many aspects of human life，Especially in the film and television industry，Believe that VR technology will bring disruptive growth to the entire film and television entertainment industry。

Same year，Disney invested twice in Vice Media, a new media that is extremely popular among young people，Vice Media is popular among young people around the world with its various "counter-mainstream" videos，Disney’s two investments totaling $400 million secured about 10% of VICE’s shares。

Although these investments for the future have not yet proven to be successful，But Disney’s active investment to keep pace with the times shows its enterprising spirit as an established company with more than 90 years of history。After launching streaming platform Disney+ and surpassing $10 billion in annual box office，December 11, 2019，Time magazine’s Business Person of the Year goes to Disney CEO Bob Iger。

In the "Award Speech", "Time" magazine wrote:

“Over the past 12 months，Iger completes acquisition of Fox for $71 billion，Two Star Wars theme parks opened，Disney+ streaming service launched，Total control of Hulu，And released the highest-grossing film in film history, "Avengers: Endgame"。”

Full year 2019，Disney’s stock price rises more than 30%，Market value exceeds 260 billion US dollars，Obviously the capital market is equally satisfied with Disney’s performance。

This company should have entered its octogenarian years，But it is changing the fastest、The media and entertainment industry that most needs to cater to the tastes of young people is firmly on the front line。

Excellent innovation strategy、Forward-looking M&A vision and all-round attack on business areas，is its enduring magic weapon。

In China，The dazzling star company during the last round of media industry explosion，There are not many left。So who can truly learn the essence of Disney，Building China’s media and entertainment empire？

*thisTextComeSource: WeChat public account "Guotai Junan Securities Research" (ID: gtjaresearch)，Author: Guotai Junan Social Service Team，Original title: "188bet app download Disney’s 2019 is another year full of magic | 国君社服》.