The Walt Disney Company

An advice to increase the profitability of the company.

Education program : International Communication, Year 1 Semester and block : Second semester, block 3, Media and the Money Team members and added information : Anastasia Zihareva, 000395178, anastasija.zihareva@gmail.com Dorina Bogdanski, 000387032, dl.bogdansk@hotmail.de Anna Mazur, 000384937, anyuta60995@ukr.net Nick Lier, 000392645, Nick.Vincent.Lier@gmail.com Rebecca Wichhart, 000309397, rebecca_wichhart@hotmail.com Media company : The Walt Disney Company Lecture and lecture code : Block assignment, IVCBLA2A Coach and coach code : Vladimir Bartelds, BAVL Place and date of submission : Groningen, 15th of April 2013, hard copy before 12:00 pigeonhole

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Executive summary

In 1923 Walt Disney founded The Walt Disney Company, in the beginning the company was about producing comics, within only a few years the Walt Disney Company produced movies as well and until today the company was able to expand their products into 4 different segments, first of all consumer products (Reuters, n.d.), followed by the segments Media Networks, Tourisms and the Movie Industry (The Walt Disney Company, n.d). Because of the wide range of products The Walt Disney Company is able to reach many people, which is why The Walt Disney Company was in 2012 declared the third most reputable company of the world (Smith, 2012). Even though the reputation gives The Walt Disney Company a competitive advantage compared to strong competitors, such as News Corporation, Time Warner and DreamWorks Animation SKG, the Walt Disney Company is not able to fully exploit its opportunities. Even though the company is able to reach a comparatively large amount of people, they lack of reaching specific target audiences such as precisely the male audience. The Avengers displayed, that targeting in specific the male audience is going to help to increase the profitability of The Walt Disney Company (Disneys Movie Guide, 2013). Especially, since one of the threats for the film productions are the increasing costs of production (Baize, n.d.), but The Avengers showed, that with the right target audience the increasing production cost can be covered and also produce a noteworthy profit. The decreasing rating on ABC TV showed the necessity of expanding the target group as well. Research showed, that the broadcasting channel mainly produces shows for the female audience and that the ratings dropped specifically after the last male targeting show was abandoned (Walt Disney Company, 2012). The online appearance of The Walt Disney Company also covers the App appearance of The Walt Disney Company, up till now the produced apps are mainly covering the informative apps about their resorts and traveling as well as an app for a blog. Nevertheless, the potential target group has an increasing usage of transportable media devices, which is why research showed that the demand for an app, that gives the user the possibility of watching movies and TV-shows on demand is increasing, as well as the importance for the mentioned App. In conclusion it can therefore be advised, that The Walt Disney Company needs to change their target audience, since the research showed the profitability of the male target audience is increasingly important and necessary for the general profitability of The Walt Disney Company.

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Content

1. Clients assignment and background ............................................ 2 2. Situation analysis ............................................................................... 2

2.1 Internal analysis ........................................................................................ 2 2.2 External analysis ....................................................................................... 3 2.3 SWOT analysis........................................................................................... 4

3. Media companies................................................................................ 7
3.1 Online resources made by Anastasia Zihareva .......................................... 7 3.2 TV (ABC) made by Dorina Bogdanski ......................................................... 8 3.3 Radio (Radio Disney) made by Anna Mazur............................................... 9 3.4 Website (ABC News) made by Nick Lier ................................................... 10 3.5 Film Studio (Walt Disney Motion Pictures Group) made by Rebecca Wichhart ....................................................................................................... 11

4. Preliminary advice ......................................................................... 12

4.1 Online resources made by Anastasia Zihareva ........................................ 12 4.2 TV (ABC) made by Dorina Bogdanski ....................................................... 13 4.3 Radio (Radio Disney) made by Anna Mazur............................................. 13 4.4 Website (ABC News) made by Nick Lier ................................................... 14 4.5 Film Studio (Walt Disney Motion Pictures Group) made by Rebecca Wichhart ....................................................................................................... 15

5. Final advice ....................................................................................... 16 Conclusion .............................................................................................. 17 6. Reference list .................................................................................... 17 Appendix ................................................................................................ 20

1. Clients assignment and background

We are a project group of five people, we were assigned to do research on the past and current situation of The Walt Disney Company, in order to create an advice to increase the profitability of the company. The goal of The Walt Disney Company is to entertain the public, by using their several mediums, such as Internet and Disney Radio. Our goal is to create individual advices for the medium to increase the profitability. These advices for the mediums will be combined to create a general advice in order for The Walt Disney Company to increase their overall profitability.

2. Situation analysis
2.1 Internal analysis
"The mission of The Walt Disney Company is to be one of the world's leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world." (Farfan, 2011). The Walt Disney Company wants to entertain, and they want to do so by creating innovative and profitable entertainment experiences, while selling related products across the globe. The Walt Disney Company does not seem to have a strong political lenience towards any political party. Instead they contribute evenly to both reigning American parties, in an effort to gain their favor. In the 2008 election cycle, Disney spent over a million dollars in contributions to the campaigns of 99 U.S representatives and 39 senators, splitting the money about evenly between democrats and republicans. Barack Obama's campaign received more than any other from Disney in 2008, nearly a quarter of a million dollars, but Hillary Clinton, John McCain, Christopher Dodd, and Rudolph Giuliani all also received tens of thousands (Elmahrek, 2012). In the last two years, the greatest achievements of The Walt Disney Company were Tangled (2010), the most expensive animated film ever made costing $260 million; and Wreck-It Ralph (2012), the most recent animated film with the highest number of original characters ever created (Disneys Movie Guide, 2013). The challenges of The Walt Disney Company for the future will be to keep up with the ever changing forms of media

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interaction and sharing. However, they have been doing this since the day they started making movies, therefore no immediate danger is expected. At the present moment, there are no urgent issues to be addressed at The Walt Disney Company.

2.2 External analysis

The Walt Disney Company calls itself a leading diversified international family entertainment and media enterprise (The Walt Disney Company, n.d.). Overall, The Walt Disney Company currently recruits 156,000 cooperators all around the world, with the biggest amount of companies within Europe. The Walt Disney Company continues to scale up, and according to the Annual Report from 2012, in 2013 the first Disneyland in China will be opened, and the construction of the Disney Resort in Shanghai will began as well (The Walt Disney Company, n.d.). The Walt Disney Company is based on the principles of democracy and freedom of expression, and all its subsidiaries appreciate its employees and consumer engagement (Freedomhouse, 2013). One of the organizations goal is to act and create in an ethical manner, and consider the consequences of our decisions on people and the planet. Contributing to this goal The Walt Disney Company also has a strong position against harassment and discrimination; in general the companys policy goes against any basis, prohibited by states or federal law (The Walt Disney Company, n.d.). The biggest competitors of The Walt Disney Company are also the other bigger media conglomerates on the international as well on the domestic market, such as News Corporation (NWS), Time Warner (TWX), and Viacom (VIA) (Walt Disney Company (DIS), 2012). Since all the mentioned competitors have a comparable portfolio of products the competitors can generate pressure on The Walt Disney Company and Disney needs to deal with portfolio of products of the other companies to increase their own compatibility. One important aspect in decreasing the pressure of the competitors is to compare the management styles of the other companies and compare it to their own and find out the advantages and disadvantages, to improve their own style and therefore increase the compatibility on the market (Russel, 2013). In 1957, The Walt Disney Company was listed on the New York Stock market. The current share price of The Walt Disney Company is $55.61, one year ago one share had a value of $40.99, that was an increase of approximately 35% in its values (Digitallook, n.d.).

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2.3 SWOT analysis

Strenghts 1. Reputation The Walt Disney Company has a really good reputation all over the world, in many countries. In 2012 The Walt Disney Company was therefore ranked on the third place of the most reputable companies in the world (Smith, 2012).

2. Diversity of products One strength of The Walt Disney Company is that the company is present in many different branches, which include for example, media networks such as broadcasts, cable and radio. Within the tourist sector The Walt Disney Company is also represented with their resorts and parks. In addition, they are represented within the movie industry, with the Walt Disney Studios (The Walt Disney Company, n.d). Another important segment of The Walt Disney Company are also the Disney Consumer products, which include all kinds of merchandises that the company retails (Reuters, n.d.).

3. Revenue The Walt Disney Company is according to Forbes the largest media conglomerate, when compared by the revenue. The good situation of the company, when considering the revenue, makes the company very stable. This is especially a strength, because even if some miscalculation appear and for example a movie does not bring the turnover that was expected, the company does not struggle directly financially (CNN Money, n.d.).

4. Cable Networks To the subsidiaries of The Walt Disney Company belong cable networks, for example the Cable Network ESPN (Greenfeld, 2012). In the US the cable networks developed good over the last years, and up till now 95% of the household within the US have access to cable networks. With the ESPN Inc., The Walt Disney Company owns one of the most successful sport networks. In general the networks are a strength for the company, because 57% of the total operating income are earned from the networks (Greenfeld, 2012).

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Weaknesses 1. Limited target audience The name of The Walt Disney Company is always highly associated with a specific target group, such as children and mothers, the image of the brand does not attract other target group (Schepman, 2012).

2. Frequent change in management There is a high staff turnover, which can hinder a company's growth. The Walt Disney Company changes its corporate officers frequently, this handling creates a lack of consistency in the management of The Walt Disney Company, and therefore leads to difficulties in the internal communication (Reocities, n.d.).

3. Dependence on the success of Studio Entertainment Studio Entertainment is the major segment of The Walt Disney Company. Therefore, if The Studio Entertainment performs badly, the success of the other four company segments; media networks; parks and resorts; consumer products and interactive media, will be at risk (Poor economic performance of the Studio Entertainment area, n.d.).

4. High operating costs Looking at the production of a successful movie, or the maintaining of a theme park, it is straightforward to say that the industry of The Walt Disney Company is considered to be very expensive. With the current economic crisis and the decline in profit, the cost of the implementation of successful movies is more and more a disadvantage of The Walt Disney Company (Baize, n.d.). Opportunities 1. International markets. Implementing the brand of The Walt Disney Company into not yet explored markets gives The Walt Disney Company the possibility of increasing the target groups, and therefore increasing their profits. 2. Develop more attractions for theme parks Both International markets and developing more attractions for theme parks ideas come from the Walt Disney Company site. When developing more attraction for theme parks, you can Page 5

sell them to other companies with your name on it. Which means that you will advertise in another theme parks, with your own attractions, and at the same time you will gain money from selling or renting the attractions (Caseiro, 2012). 3. International cable Damon Churchwell, wrote in December 2012, an article for The Walt Disney Company, stating By creating an international cable you will get famous all over the world. Children in every country will be able to watch the series and movies from and cooperated by Walt Disney. For example, ESPN operates in 27 international networks, spanning 190 nations, with 11 languages, while the Disney Channel on the other hand is available in 35 languages. Which already creates opportunities in different languages. (2012). 4. Internet video/television The appearance of internet television is helping to increase the viability of videos that stream through the internet right to a television, according to WikiWealth (2010). Threats 1. Piracy Recent research pointed to 400,000 to 600,000 films being downloaded from the internet illegally every day. The Walt Disney Company is a company, like most companies, they rely on profits. Without profit, a business is not functioning, and with about half a million downloads per day, a lot of revenue is lost, therefore piracy of movies poses a serious risk to The Walt Disney Company (Waters, 2003).

2. Competition The major competitors of Walt Disney are: News Corporation, Time Warner, Dreamworks Animation SKG, Viacom, 21st Century Fox, Time Warner. Competition is a threat that almost every business in the world has to deal with. If the consumer chooses a product from a competitor, you lose out on your profit. A company should always strife to surpass its competitors (Hoovers, n.d.).

3. Market Stagnation The Walt Disney Company suffers from the economic crisis, just like every other company. And simply put: if the consumer does not have the money to spend on products/services Page 6

provided by The Walt Disney Company, they will not make any money. Without the right purchasing power by the consumers, The Walt Disney Company cannot make a profit in any way.

3. Media companies
3.1 Online resources made by Anastasia Zihareva
The structure of your medium There are special departments responsible for online activity in each branch of the company. The exact data is not given, as they are counted as employees of medium they work for more generally TV or Radio. The prove of that is the fact that alongside purely online projects like online games, most of the product of Walt Disney Company are being advertised or even sold online. Financial picture of your medium As online resources is more connected to other more powerful fields of the company, most of the time things which are being advertised are promoting one of the movies or other products of Walt Disney or are based on it. As the online field of the company is relatively new and only during last 2 years was being developed it is constantly growing as more and more input is put in this field. Products and Audience of your medium Recently, in 2012, the company has focused on launching online games as well as iPhone Apps (Walt Disney Company, 2012) with entertaining content, which aim is to interest mostly users of young age, male and female under 25, as they are the main consumers of online entertaining market in general. Talking about other general information about the target audience of this online product, is that they are active users of internet in general and are mostly already familiar with Disney characters they meet in online products. The exact sum of money, spent on developing those directions are unknown, but author still can assume that it is much cheaper in production than animated movies, for example, as all the characters are already created, so the online game designers can use this base. During the year of 2012 the popularity of online games, launched by Walt Disney Company has increased as one of the games has reached position number one among all other online games (Walt Disney Company, 2012). Page 7

Latest (technological) developments about your medium According to the Annual report of Walt Disney Company of 2012 the latest and also one of the most successful was interactive online games and digital learning for kids, based on English Learning Centres in China (Walt Disney Company, 2012). Both developments were created, using world famous Disney characters like Mickey Mouse and have gained popularity very fast. More specifically, one of the games was listed most popular in the whole online game industry in 2012.

3.2 TV (ABC) made by Dorina Bogdanski

The structure of your medium The American broadcasting Company is an American television network, it is owned by the Walt Disney Company. It belongs to the Disney-ABC Television group, its President is Anna Sweeney (No Author, 2011). The American broadcasting Company has 239 affiliates, means 239 different local television stations all over the United States, what makes the company able to reach 99% of the households in the U.S.. ABC is the Broadcasting of the Walt Disney Company, it produces own programs as well as it acquires program tights form third parties, and it shows also programs that are owned by the mother company (Walt Disney Company, 2012). Financial picture of your medium The ABC spends mainly money on the production and acquisition of programs as well as on costs for operating labor and technical support costs. Advertisements are the main source of income; these advertisements are placed during commercial breaks (Walt Disney Company, 2012). But this income varies, due to seasonal changes, since during the cold season the rating of the programs of ABC are higher, they can also charge more for the advertisements placed during the commercial breaks. Other sources for their income are fees charged to multichannel video programming distributors and also fees charged for buying the right for programs produced by the ABC. The total Revenue of the companies Segment Media Networks, amounts to 19 436 million dollars in the business year of 2012, but the Media Networks is not only the ABC, it includes besides the Broadcasting part also the Cable Networks, which belong to the Walt Disney Company (Walt Disney Company, 2012). The total operating income for the segment Media Networks amounts to 6 619 million in 2012. Both numbers increased from 2011 to 2012, the total revenue by 4% and the operating income

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by 8%. Comparing the year 2010 with 2012, the revenue increased by 13.25%, the operating income increased by 28%. From the 19 436 million, 5 815 million were produced only by the ABC, therefore in total 30% of the total revenue. In case of the operating income, ABC produced 915 million of the overall 5 704 , therefore 16% of the total operating income in the segment of Media Networks (Walt Disney Company, 2012). Products and Audience of your medium The main products offered by ABC are the produced and bought programs, which are broadcasted to the viewers, or customers in this case. In the year 2012, the costs of production decreased by 128 million dollar (Walt Disney Company, 2012). In total the whole Media Networks segment had a total expense of 8 991, from the year 2011 to the year 2012 the expenses increased in total by 2.6%. The slight decrease in expenses happened because of the cancellation of the Oprah Winfrey Show in that year. With their programs ABC is able to reach all possible audiences, from children and woman and men as well, the different time slot for specific programs make that possible (Walt Disney Company, 2012). Compared by the ratings, ABC lies behind CBS and NBC on the third place of U.S. Networks. Specific information about the ratings was not found. The Ratings in general fluctuated a lot over the years, since the launch of ABC, this happened mostly because some TV shows ABC produced lost the interest of the audience over a longer time of airing. Also because competing networks produced, after the success on ABC, comparable shows and this increased the attention of the audience, which is why the ratings also changed over a longer time period. Another important point why the ratings fluctuated, is the seasonal change, meaning that within a year a usual fluctuation takes place, which is forced by the temperatures, in summer less people watch TV then in winter (Walt Disney Company, 2012).

3.3 Radio (Radio Disney) made by Anna Mazur

The structure of your medium Radio Disney is a 24/7 radio network which is based in Burbank, California. It is available on 35 terrestrial radio stations and on RadioDisney.com, SiriusXM satellite radio, iTunes Radio Tuner, XM/DIRECTV and mobile phones. Radio Disney is also available in Canada and throughout most of South America. Radio is regulated by the Federal Communications Commission (FCC).The ESPN (multinational sports entertainment company) operates Radio Network and four owned ESPN Radio stations (Walt Disney Company, 2012). Financial picture of your medium Page 9

The total operating income for the segment Media Networks amounts to 6 619 million in 2012. Both numbers increased from 2011 to 2012, the total revenue by 4% and the operating income by 8%. Comparing the year 2010 with 2012, the revenue increased by 13.25%, the operating income increased by 28%. During the year 2009 charges were related to FCC radio licenses ($142 million) that became the most significant of the impairment charges in that year. The FCC radio license impairment charges reflected overall market declines in certain radio markets in which Walt Disney Company operates (Walt Disney Company, 2012). Products and Audience of your medium Radio Disney is a 24/7 radio network for kids, teens and families, aimed at young teenagers under age 19; its format can be described as a youth-targeted contemporary hit radio with heavy emphasis on teen idols. Radio Disney is formatted like a traditional radio station, featuring prize giveaways and occasional in-studio interviews called "Takeovers". Latest (technological) developments about your medium The medium is up to date since can be available on radio stations in many countries. Recently Radio Disney programming can also be downloaded on mobile phones via the iTunes Music Store. In addition, new website design was launched in October 2012. The new website is simplified version of the old website and very convenient for its young target group (No author, 2012).

3.4 Website (ABC News) made by Nick Lier

The structure of your medium ABC news is a subsidiary of Walt Disney. The three people on the top are: Anne Sweeney - President & Co-Chair Disney-ABC Television Group Ben Sherwood - President of ABC News Diane Sawyer - Lead Anchor Its main departments are: ABC News Headquarters - New York City Times Square Studios - New York City Newseum - Washington, D.C. ABC-owned stations - All across the United States The company currently offers work to about 1000 employees. Financial picture of your medium Page 10

According to SEC filings, Disney, ABCs parent company, had revenues of $40.9 billion in fiscal 2011, up 7.4% from $38.1 billion in 2010. (Guskin & Rosentiel, 2010). The ABC news website sees, on average, about 18.2 million unique visitors a month. These generate large sums of advertisement revenue, same as the tv broadcasts. This is how ABC generates the bulk of its income. As an example, one show from ABC news, Good morning America, made 314 million from ads in 2010, up 6.3% from a year earlier. Money is mainly spent on production, self-advertisement, and labor costs. Products and Audience of your medium The products of ABC news are broadcasts, which are free to the public as long as they have a proper tv/internet connection. The target audience is mainly adults, however views from nearly any demographic are encouraged. ABC news is formatted as most news programs: They have a morning show, standard news programs and live feeds through TV and internet.

3.5 Film Studio (Walt Disney Motion Pictures Group) made by Rebecca Wichhart
The structure of your medium The Walt Disney Studios is an American production company, owned by the Walt Disney Company. The studio, which is known for its multi-faceted film division, which is one of Hollywoods major film studies, is based at the Walt Disney Studios in Burbank, California. Walt Disney Studios film division is a member of the Motion Picture Association of America. The Walt Disney Studios generated an estimated income of $722 million during the 2012 fiscal year. The Walt Disney Studios motivates the creation, production, promotion, sales, acquisition and domestic and international distribution of live-action and animated motion pictures, home entertainment releases, music and soundtrack recordings, and live stage plays. Feature films are released under the following names: Disney; Walt Disney Animation Studios; Pixar Animation Studios; Disney nature; Marvel Studios; and Touchstone Pictures, the banner under which live-action films from DreamWorks Studios are distributed. The Disney Music Group encompasses the Walt Disney Records and Hollywood Records labels, as well as Disney Music Publishing. The Disney Theatrical Group produces and licenses live events, including Disney on Broadway, Disney On Ice and Disney Live!. , The Walt Disney Studios Financial picture of your medium

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The Studio Entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings and live stage plays. The Company produces acquired films, which is including film and television library, in the theatrical, home entertainment and television markets primarily under the Walt Disney Pictures, Pixar and Marvel banners. The Company produces and distributes Indian movies worldwide through its UTV banner. The Company holds a 99% interest in UTV, one of the leading film production studios and film distributors in India, which produces and co-produces live-action and animated content. In fiscal 2012, notable UTV releases included Rowdy Rathore and Barfi. On December 3, 2010, the Company sold Miramax Film NY, LLC (Miramax) for $663 million. Net proceeds, which reflected closing adjustments, the settlement of related claims and obligations and Miramaxs cash balances at closing totaled $532 million. The sale included both Miramax and Dimension film assets. Products and Audience of your medium Disney Publishing Worldwide creates, distributes, licenses and publishes childrens books, magazines and digital products in multiple countries and languages based on the Companys Disney-, Pixar- and Marvel-branded franchises. Digital products include content for mobile devices such as e-books and apps, including Disney Princess Dress-Up: My Sticker Book, Minnie Bow Maker, Brave: Story Book Deluxe and Cars 2: World Grand Prix Read and Race. Marvel Publishing creates and publishes comic books, and graphic novel collections of comic books, principally in North America in print and digital formats. Marvel Publishing also licenses the right to publish translated versions of our comic books, principally in Europe and Latin America. Titles include X-Men, The Avengers, Spider-Man, Thor, Captain America, Iron Man, and The Incredible Hulk. These main products are most viewed by youth, from the age of six years till twenty-one. Walt Disney studios is focused on producing family movies (Disneys Movie Guide, 2013).

4. Preliminary advice
4.1 Online resources made by Anastasia Zihareva
Annual report 2012 of Walt Disney Company says that research has shown that such parts of Disney online as interactive games and digital learning for kids were really successful on market, being more specific, Disney online game was named the first by popularity in the whole internet. Digital learning, which involves worlds most famous Disney characters has a Page 12

great potential and has already partly fulfilled it in year of 2012. Those two directions (online interactive games and digital learning for kids) are also attractive as they do not demand a lot of input, all characters and the whole base was made by animators, while creating the characters for animation movies.

4.2 TV (ABC) made by Dorina Bogdanski

According to the annual report of 2012, the broadcasting sector of ABC lost in revenue, compared to the year 2011. This decrease was about 22 million dollar. This was mainly because of a decrease in ratings of ABC, which led to lower advertising fees, in total the ABC earned 162 million less from advertising (Walt Disney Company, 2012). One reason for that was the cancellation of Desperate Housewives, the most seen program on ABC, a 30-second commercial brought 220 000 $, assuming an hour show had 15 minutes of paid advertising that would bring 6.600.000 $. Therefore my advice would be, to develop again a program, which could reach the same audience as Desperate Housewives, and could bring back the income from the advertisings (Finke & Andreeva, 2011). But in this case it needs to be cleared, that the production costs are kept low, thats what the cancelation also brought, a 128 $ million decrease in production costs in total, a clear estimation of how much the desperate housewives production costs were from this total amount is not specifically mentioned (Walt Disney Company, 2012). In conclusion, the ABC needs to develop program that are low in production costs but help to bring back the ratings, to get the advertising revenue increased.

4.3 Radio (Radio Disney) made by Anna Mazur

Radio Disney has the target group of kids teens and families, therefore a big opportunity is to reach also a male target group, which is until now included in the three mentioned above. According to statistics, in 2011 42% of listeners were adult women, 21% were men, what is a half less. One of the reasons for this might be a great popularity of mum-target messaging on radio. Possible opportunities might be to create more on-air vignettes aimed at male audience. The advice can be to make a survey about men-liked programs, for example about sports, and either release them more or create new ones to reach the audience. That would bring new income, also through advertising, since it would be completely different advertising that would not have worked with the other three target groups

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4.4 Website (ABC News) made by Nick Lier

Piracy is a big problem in the media today. Every time a new movie, album or video game is released, people have it online for free in a matter of days, hours, and sometimes minutes. This can pose a serious problem for companies involved in media as they can lose a large amount of revenue. My advice to The Walt Disney Company will be on how to deal with this pressing matter, whilst acquiring some goodwill along the way. To delve into the solution for piracy, we first need to understand piracy itself. Files (audio, video or otherwise) are examined for any protection (commonly called DRM), then people with the knowledge to do so counter-act or remove these protections and then distribute them over the internet. Even though this is illegal, people find ways to circumvent the law. Now the reason for piracy is not what most people believe it to be, namely the requirement to pay for these goods. Most of the times the reason for pirating is from a convenience point of view. Often times, goods are not readily available or can be hard to access. Ironically, a lot of times the protective measure implemented to stop piracy, can be disruptive to normal users, promoting piracy in itself. So to counteract piracy, one should look to improve accessibility of his/her goods. The first step Walt Disney should make, is to drop every form of DRM. Whilst no specific numbers are known for Walt Disney itself, examples can be shown to give a better view on the severity of piracy right now. In 2012, the collective music business suffered a loss of 12.5 billion dollars due to piracy, in the USA alone. Clearly, DRM isnt helping anyone. Professionals can easily break it, and normal people are only bothered by it. Completely dropping DRM will immediately save money as companies (Walt Disney including) spend a lot of money on it. After all measures of DRM are dropped, not only will convenience of the product rise, it is also seen as a gesture of faith towards the consumers, making them less inclined to pirate media anyway. Thus, not only saving money but also creating more consumer confidence. After all DRM is removed, The Walt Disney Company should focus on creating a more accessible platform for their media, or at least make their media available through existing platforms. When all inconveniences are dropped from using the product, and the product is more widely accessible, piracy will see a steep drop. So not only will money be saved, more will also be received. As said, there are no accurate numbers specific for the losses of The Walt Disney Company itself, but numbers from collective medias can give an idea of the scale of the piracy problem: In 2012, the music industry suffered a loss of 12.5 billion dollars due to piracy. The software industry lost 50 billion in 2009, and the movie industry lost 25 Page 14

billion in 2011. These numbers are astronomical, and even though piracy will never be FULLY solved, billions and billions of dollars could be saved by improving the way we deal with it (Gavin & Blowes, 2012).

4.5 Film Studio (Walt Disney Motion Pictures Group) made by Rebecca Wichhart
The use of apps nowadays is becoming more and more in ones everyday life, and investors play a big role in this. Be creating an app for your company you give people more access to your product, service and information. Big organisations as Facebook have an app, travel organisations have created an app for their travellers, and news can be read in an app as well. But what are apps? An app is an web-based application, that are designed to be used entirely within the browser. If you use an app, you can do everything you want, from creating documents, to listen to music, without having to install complicated software. The Walt Disney Company is in possess of several apps, regarding the attraction parks. The nine biggest apps from The Walt Disney Company are related to travelling, dinning in the parks, stay in hotels and blogs. The idea is to develop an app where people have free access to movies from The Walt Disney Motion Pictures group, radio from Radio Disney and television from ABC. In this research of creating an app for The Walt Disney Company is am focussing my product on iPhone users. This because it is easier to give an advice focused on only one product, instead of the all brands. The focus for The Walt Disney Company should be on creating an app similar to a game app. The costs for this are similar to the costs of an app, where one can watch films, TV and listen to the radio. The focus for my research is thus on developing a game app, for Apple, for The Walt Disney Company. 1. How much money is needed to plan and implement my advice? To create an app - $10,000-$250,000 once Games $10,000-$250,000 The hardest to ballpark. Talking to some developers who are into the hardcore game source code (render, sound, maths, physics, etc), many of the racing games will that use the gyroscope will be $125,000 without even blinking and thats just for the code. Even if you try to keep it hyper simple, games get complicated quickly. Hooking into game center, having top scores, and integrating with an online community can be tricky. The benefit of a game is that they download in much greater number. As a marketer, there is

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nothing more viral than a fun game, which is something to keep in mind for your ROI. (Thomas, 2013). Create an app for iPhone only - $500 $10,000 This will get you a base level of design, that you can send over to the developer who will be able to add these images into the code. Create an app for iPhone 4 compatible $625 - $ 12,500 These images will be sized at 960 x 640px height, which twice the 480320 for the regular iPhone. Create an app for iPad $750 - $15,000 This is assuming that the layout is very similar and user flow is also similar. In many cases you will have to create alternate functionality to accommodate for the iPad size and speed, which requires new designs. iTunes Connect account - $99 per year. Once you have completed building the app in xCode, you need an iTunes Connect account, which will costs the company around $99 per year. 2. Is it possible to save money somewhere else? Due to own advertising from The Walt Disney Company it is not possible to save money on this. It is an idea of using sponsors to advertise for The Walt Disney Company, in the breaks of the TV series, or use products from big organisation in creating new movies. However The Walt Disney Company can benefit from creating an app, because of the big advertisement range.

5. Final advice
In conclusion, to further improve The Walt Disney Company in the future, we believe that the company should focus more on the male demographic, particularly the males under 25 years of age. As this is the biggest demographic available, The Walt Disney Company is missing out on a large potential source of income. In order to achieve this, The Walt Disney Company needs to make several changes to its public image, or at least host an alternate source for content. For example: Disney radio will always be associated with immature music, so to gain a wider radio demographic, A new station may need to be set up. As for movies, The Avengers was a great example of the approach they should take on movies, and The Walt Disney Company should further invest in this line of movies. ABC Page 16

news and ABC have their own niche at the moment, and should stick with what they do. As for online resources, the combined advice for a Disney App and anti-pirating moves should provide The Walt Disney Company with a generous amount of extra income across all boards of media entertainment, as the online resources are not only a subset of The Walt Disney Company on itself, but envelops all other forms of media.

Conclusion
In the process of creating this report several things have been discovered. By creating innovative and profitable entertainment experiences, The Walt Disney Company wants to entertain. Entertaining is a big part of The Walt Disney Company and even though they succeed in this, the target group of The Walt Disney Company is not as broad as it could be. During the research for an advice, to increase the profitability of The Walt Disney Company, it has been discovered, that this can be done by several ways, but the focus needs to lay on broaden the target group. In order to do this The Walt Disney Company has to make several changes in all of the mediums under The Walt Disney Company. Disney Radio will always be associated with childish music, so to gain a wider radio demographic, A new station may need to be set up. As for movies, The Avengers was a great example of the approach they should take on movies, and The Walt Disney Company should further invest in this line of movies. ABC news and ABC have their own niche at the moment, and should stick with what they do. As for online resources, the combined advice for a Disney App and anti-pirating moves should provide The Walt Disney Company with a generous amount of extra income across all boards of media entertainment, as the online resources are not only a subset of Disney on itself, but envelops all other forms of media.

6. Reference list
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Blowes, M., (n.d.). Retrieved on May 21st 2013 from http://www.neowin.net/news/piracy-lost-software-industryCNN Money, (n.d.). Fortune 500 Industries, Retrieved on February 27th 2013 from http://money.cnn.com/magazines/fortune/fortune500/2012/industries/145/

Digital Look., (n.d.) [Table Detailed Disney Share Price Data].Walt Disney Co. (DIS). Retrieved from on May 21st 2013 http://www.digitallook.com/companyresearch/17716/Walt_Disney_Co/share_prices. html Disneys Movie Guide, (2013). Best Disney Movies. Retrieved on May 21st 2013 from http://www.disneymovieslist.com/best/best-disney-movies.asp Elmahrek, A., (2012). Disneys Actual Position Regarding Council Districts. Retrieved on May 21st 2013 from http://www.voiceofoc.org/oc_north/article_380a0ee2-e2fc-11e193eb-0019bb2963f4.html Emily, G., (2012). Network: By the numbers. Retrieved on May 21st 2013 from http://stateofthemedia.org/2012/network-news-the-pace-of-changeaccelerates/network-by-the-numbers/

Farfan, B., (2011). Walt Disney Mission Statement: Creativity + Innovation = Profits. Retrieved on May 21st 2013 from http://retailindustry.about.com/od/retailbestpractices/ig/Company-MissionStatements/Walt-Disney-Mission-Statement.htm Finke & Andreeva, (August 5. 2011) Retrieved on March 14th 2013 from http://www.deadline.com/2011/08/exclusive-abc-will-end-desperate-housewives-inmay-2012-after-8th-season/

Gavin, P., Financial loss in the movie industry due to piracy. Retrieved on May 21st 2013 from http://pattgavin.blogspot.nl/2012/01/financial-loss-in-movie-industry-due-to.html Page 18

Greenfeld, K., (August 30, 2012). Retrieved on February 28th 2013 from http://www.businessweek.com/articles/2012-08-30/espn-everywhere-sports-profitnetwork Guskin, E. & Rosenstiel, T., (2010). Network: By the Numbers. Retrieved on May 21st 2013 from http://stateofthemedia.org/2012/network-news-the-pace-of-changeaccelerates/network-by-the-numbers/ Hoovers, (n.d.) The Walt Disney Company Competition. Retrieved on May 21st 2013 on http://www.hoovers.com/companyinformation/cs/competition.The_Walt_Disney_Company.432c15c5e0758b7d.html

Industries, (n.d.). Retrieved on February 28th 2013 from http://money.cnn.com/magazines/fortune/fortune500/2012/industries/145/ No author, (February 11th, 2011) Retrieved on March 14th 2013 from http://www.managementparadise.com/forums/human-resources-management-hr/214576-organisational-structure-american-broadcasting-company.html Online piracy in numbers facts and statistics (2011) Retrieved on May 21st 2013 from http://www.go- gulf.com/blog/online-piracy/ Reocities, (n.d.). Retrieved on May 21st 2013 from http://www.reocities.com/TimesSquare/1848/disney.html

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Smith J., (June 7, 2012). The worlds most Reputable Companies Retrieved on February 27th 2013 from http://www.forbes.com/sites/jacquelynsmith/2012/06/07/the-worldsmost-reputable-companies/2/ Schepman, M., (September 27, 2012). Disney SWOT analyses. Retrieved on May 21st 2013 from http://mackenzieschepmanblog.wordpress.com/2012/09/27/disney-swot-analysis/ The Walt Disney Company., (April 2013). Nyse Euronext. Retrieved on May 21st 2013 from http://www.nyse.com/listed/dis.html Thomas, C., (2013). How much does it cost to develop an app? Retrieved on May 21st of 2013 from http://www.bluecloudsolutions.com/blog/cost-develop-app/ Walt Disney Company, (2012). Annual Report 2012. Retrieved on February 27th 2013 from http://cdn.media.ir.thewaltdisneycompany.com/2012/annual/10kwrap-2012.pdf Walt Disney Company (DIS), (2012). Wikinvest. Retrieved on May 21st 2013 from http://www.wikinvest.com/stock/Walt_Disney_Company_(DIS)

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Appendix

Contract Name : Anna Mazur

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Nationality :Ukraine Student number :000384937 Mobile phone : +31644521574 Email : anyuta609995@ukr.net Name : Nick Lier Nationality : Dutch Student number : 000392645 Email : Nick.Vincent.Lier@gmail.com Name :Dorina Bogdanski Nationality : German Student number : 000387032 Email : dl.bogdanski@hotmail.de Name : Anastasia Zihareva Nationality : Latvian Student number : 000395178 Email :anastasija.zihareva@gmailcom Name : Rebecca Wichhart Nationality : Dutch Student number : 000309397 Email : rebecca_wichhart@hotmail.com Teams goal and the members contribution 1. Working effectively in a multicultural group 2. Improving our presentation skills 3. Getting to know monitoring issues and how to give policy advice 4. Improving ourselves in a business perspective 5. Successful presentation of the final product and getting high score Dividing of chair person and minutes taker

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Week 9 10 11 12 13 14 15 16 Meetings When Monday 25/2/2013 12:30H Monday 4/3/2013 12:30H Monday 11/3/2013 12:30H Monday 18/3/2013 12:30H Monday 25/3/2013 12:30H Monday 16/4/2012 12:30H

Chairperson Anna Mazur Nick Lier Dorina Bogdanski Anastasia Zihareva Rebecca Wichhart Anna Mazur Nick Lier Dorina Bogdanski

Minute taker Dorina Bogdanski Rebecca Wichhart Anna Mazur Anastasia Zihareva Nick Lier Rebecca Wichhart Dorina Bogdanski Anastasia Zihareva

Where Hanze University Hanze University Hanze University Hanze University Hanze University Hanze University

Who All team members + coach All team members + coach All team members + coach All team members + coach All team members + coach All team members + coach

Agreements The mutual agreements we made : 1. Respond back to e-mails you get from your project group. That way everybody knows that youve read the e-mails youve received and that you are up-to-date of what is going to happen. Everybody checks their e-mail every day and got 12 hours to respond back to an email.

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2. When somebody sends a text message, make sure that you respond back to it. This has to happen within 4 hours. 3. When you see that somebody called you, make sure you call back as soon as possible. 4. The day before the deadline everybody is easily accessible through internet and phone. The agreements about the attendance : Miss 1 meeting: No consequences, only with a good reason. Otherwise you immediately get an official warning. Miss 2 meetings: An official warning. Miss 3 meetings: Discussion with the project leader about expelling you from the group. We want to work together in these ways : Expectations: Everybody comes well prepared to the meetings. Everybody hands in their work before the deadline. Everybody attends the meetings. If not, the agreements about the attendance will come in to play. Everybody is active during the meetings and pitches in. Preparations: When the meeting with the coach is coming up, everybody is well prepared and knows who the chairman is and who the minute taker is. The chairman sends the agenda the day before the meeting to the coach and the project members. The minute taker brings the agenda with him/her. When we arrange with the group that we will get together, everybody is up-to-date about the task were going to do and when there are assignments that need to be done, everybody has them done.

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New agreements/changes: Generally speaking the contract doesnt change. However, when someone is sick or unable to come due to special circumstances, we can revise our agreements and see how we can solve it. We can discuss and look at this internally with our project group and assess the situation. Though, we expect this isnt necessary. The agreements we made for an equal share in work : All the tasks will be divided equally amongst the members. If somebody has to do less than others in a week, the person receives the longer task next week. A few agreements about not handing in the tasks on time: Handing in too late once: Handing in too late twice: Handing in too late three times: The quality of the work : The work will be posted in our social network group, and will be assessed and commented on by every individual of the group. If necessary, the work will be discussed at the weekly meetings and give notes for improvement. If the work is still not up to par with the standard, other members of the group will help and inform the other member how to improve it. That way the work gets done and the member will learn from the process. an extra task an extra task again. expelled from the project group.

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