Old ideas generate fresh profits for Disney

The latest Toy Story and Iron Man installments helped Disney to a hefty $1.3bn profit last quarter.

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Last Updated: 27 Oct 2010

A productive few months for Disney: its profits soared to $1.3bn last quarter, up from $954m last year. Apparently this was largely due to hit movies like Alice in Wonderland, Toy Story 3 and Iron Man 2, the three highest-grossing films in the US so far this year – proof that you don’t need to be original to make the big bucks. Elsewhere in the Disney empire, the World Cup sprinkled its own brand of fairy dust over its sports channel ESPN, pushing ad revenues up by almost a third. The only twist in the plot was that the company’s theme parks are still under-performing – but elsewhere in the kingdom, all is magical…
 
After a difficult last year, Disney’s execs clearly decided to play it safe and fall back on some tried-and-tested favourites – from old chestnuts like Alice in Wonderland to the more modern Toy Story franchise.  And it doesn’t look like the company will be departing from that strategy anytime soon. Having sold Miramax, which made its edgier films, the company has just bought games company Playdom, which, by Disney’s own admission, will end up making games ‘featuring Disney characters’. In other words, expect a lot more of the kind of kitsch, kid-friendly stuff the company is famous for. And, presumably, films that are little more than feature-length adverts for the games, costing £40 a pop…
 
ESPN’s numbers were slightly marred by the cost of acquiring the rights to English Premier League football matches, but ad revenues were nonetheless described as ‘nothing short of spectacular’ by Disney CEO Bob Iger. He said a quarter of the total jump in revenues was generated by ‘non-linear platforms’ (horrible corporate-speak for mobile and internet). But it also helped that the ‘nail-biting’ NBA finals (that’s basketball to the rest of us) got their best ratings for a decade.
 
The only poison in Disney’s apple is its theme parks, which are still struggling after the recession: they’ve seen revenues fall by 8%, while bookings for next quarter are down by 9%. Disappointing, but hardly surprising at a time when worldwide tourism is down. (Either that, or everyone in the world now has ‘It’s a Small World’ stuck in their head and wants nothing else to do with it).
 
Still, if there’s one thing we can take from Disney’s recent successes, it’s this: if in doubt, just rejig an old favourite and rely on a combination of nostalgia and a thirst for new technology to do the rest. Coming soon: Pinocchio 3D. 


In today's bulletin:
Growth down, inflation up - Bank of England adds to gloom
Desmond makes his intentions clear with Five management cull
Old ideas generate fresh profits for Disney
Editor's blog: Getting the UK out of the doldrums
Work life devours family dinner times

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